[Federal Register Volume 63, Number 66 (Tuesday, April 7, 1998)]
[Notices]
[Pages 16963-16966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9095]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-428-602]


Brass Sheet and Strip from Germany: 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 duty order on brass sheet and strip from Germany. This 
review covers one manufacturer and exporter of the subject merchandise, 
Wieland-Werke AG (Wieland). The period of review (POR) is March 1, 
1996, through February 28, 1997.
    We preliminarily determine that sales have been made below normal 
value (NV). If these preliminary results are adopted in our final 
results of administrative review, we will instruct U.S. Customs to 
assess antidumping duties based on to the difference between export 
price (EP) and NV.
    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.

EFFECTIVE DATE: April 7, 1998.

FOR FURTHER INFORMATION CONTACT:
Thomas Killiam, Alain Letort, or John Kugelman, Enforcement Group III 
Office 8, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Room 7866, Washington, D.C. 20230; telephone (202) 482-2704 (Killiam), 
4243 (Letort), or 0649 (Kugelman).

SUPPLEMENTARY INFORMATION:

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are references 
to the provisions codified at 19 CFR Part 353 (April 1997). Although 
the Department's new regulations, codified at 19 CFR Part 351 (62 FR 
27296, May 19, 1997), do not govern these proceedings, citations to 
those regulations are provided, where appropriate, to explain current 
departmental practice.

Background

    The Department published the antidumping duty order on brass sheet 
and strip from Germany on March 6, 1987 (52 FR 6997). The Department 
published a notice of Opportunity to Request an Administrative Review 
of the antidumping duty order for the 1996/97 review period on March 7, 
1997 (62 FR 10521). On March 31, 1997, petitioners Hussey Copper Ltd., 
The Miller Company, Outokumpu American Brass, Revere Copper Products, 
Inc., International Association of Machinists and Aerospace Workers, 
International Union, Allied Industrial Workers of America (AFL-CIO), 
Mechanics Educational Society of America (Local 56) and the United 
Steelworkers of America (AFL-CIO/CLC), requested that the Department 
conduct an administrative review of the antidumping duty order on brass 
sheet and strip from Germany for Wieland. We published a notice of 
initiation of

[[Page 16964]]

this review on April 24, 1997 (62 FR 19988).
    On May 1, 1997, the petitioners requested, pursuant to section 
751(a)(4) of the Act, that the Department determine whether antidumping 
duties had been absorbed by the respondent during the POR. Section 
751(a)(4) provides for the Department, if requested, to determine, 
during an administrative review initiated two years or four years after 
publication of the order, whether antidumping duties have been absorbed 
by a foreign producer or exporter subject to the order if the subject 
merchandise is sold in the United States through an importer who is 
affiliated with such foreign producer or exporter. Section 751(a)(4) 
was added to the Act by the URAA.
    The regulations governing this review do not address this provision 
of the Act. However, for transition orders as defined in section 
751(c)(6)(C) of the Act, i.e., orders in effect as of January 1, 1995, 
section 351.213(j)(2) of the Department's new antidumping regulations 
provides that the Department will make a duty-absorption determination, 
if requested, in any administrative review initiated in 1996 or 1998. 
See 19 CFR Sec. 351.213(j)(2), 62 FR at 27394. As noted above, while 
the new regulations do not govern the instant review, they nevertheless 
serve as a statement of departmental policy. Because the order on brass 
sheet and strip from Germany has been in effect since 1987, it is a 
transition order in accordance with section 751(c)(6)(C) of the Act. 
However, since this review was initiated in 1997, the Department will 
not undertake a duty-absorption inquiry as part of this administrative 
review.
    Under the Act, the Department may extend the deadline for 
completion of an administrative review if it determines that it is not 
practicable to complete the review within the statutory time limit of 
365 days. On November 10, 1997, the Department extended the time limits 
for these preliminary results to March 31, 1998. See Brass Sheet and 
Strip from Germany; Extension of Time Limits for Antidumping Duty 
Administrative Review (62 FR 60469, November 10, 1997).
    The Department is conducting this administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    This review covers shipments of brass sheet and strip, other than 
leaded and tinned, from Germany. The chemical composition of the 
covered products is currently defined in the Copper Development 
Association (C.D.A.) 200 Series or the Unified Numbering System 
(U.N.S.) C2000; this review does not cover products the chemical 
compositions of which are defined by other C.D.A. or U.N.S. series. In 
physical dimensions, the products covered by this review have a solid 
rectangular cross section over 0.006 inches (0.15 millimeters) through 
0.188 inches (4.8 millimeters) in finished thickness or gauge, 
regardless of width. Coiled, wound-on-reels (traverse wound), and cut-
to-length products are included. The merchandise is currently 
classified under Harmonized Tariff Schedule (HTS) item numbers 
7409.21.00 and 7409.29.00. The HTS item numbers are provided for 
convenience and Customs purposes; the written description of the scope 
of this order remains dispositive.
    The POR is March 1, 1996 through February 28, 1997. This review 
covers sales of brass sheet and strip from Germany by Wieland.

Transactions Reviewed

    In accordance with section 751 of the Act, the Department is 
required to determine the EP (or CEP) and NV of each entry of subject 
merchandise.
    As in past reviews, we are treating Wieland, Metallwerke 
Schwarzwald GmbH (MSV), and Langenberg Kupfer-und Messingwerke GmbH 
(LKM) as affiliated parties, identified in the questionnaire response 
of June 16, 1997, and have collapsed them as a single producer of brass 
sheet and strip in order to analyze the universe of home market 
affiliated sales.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
brass sheet and strip, covered by the descriptions in the Scope of the 
Review section of this notice, supra, and sold in the home market 
during the POR, to be foreign like products for the purpose of 
determining appropriate product comparisons to U.S. sales of brass 
sheet and strip. 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 
next most similar foreign like product on the basis of the 
characteristics listed in Appendix V of the Department's September 19, 
1996 antidumping questionnaire. In making the product comparisons, we 
matched foreign like products based on the physical characteristics 
reported by the respondent.

Fair Value Comparisons

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

Export Price

    We calculated the price of United States sales based on EP, in 
accordance with section 772(a) of the Act, because the subject 
merchandise was sold by the producer or exporter outside the United 
States to unaffiliated purchasers in the United States prior to the 
date of importation.
    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, marine insurance, U.S. inland 
freight, U.S. brokerage and handling, and U.S. Customs duties.

Normal Value

    Based on a comparison of the aggregate quantity of home-market and 
U.S. sales, we determined that the quantity of the foreign like product 
sold in the exporting country was sufficient to permit a proper 
comparison with the sales of the subject merchandise to the United 
States, pursuant to section 773(a) of the Act. Therefore, in accordance 
with section 773(a)(1)(B)(i) of the Act, we based NV on the price at 
which the foreign like product was first sold for consumption in the 
home market, in the usual commercial quantities and in the ordinary 
course of trade.
    Where appropriate, we deducted rebates, discounts, post-sale 
warehousing, inland freight, inland insurance, and packing. We made 
adjustments to NV, where appropriate, for differences in credit 
expenses.
    We increased NV by U.S. packing costs in accordance with section 
773(a)(6)(A) of the Act. For comparison of U.S. merchandise to home-
market merchandise which was not identical but similar, we made 
adjustments to NV for differences in cost attributable to differences 
in physical characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act. '

Differences in Levels of Trade

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (``LOT'') as the EP or

[[Page 16965]]

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 (``SG&A'') 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 its questionnaire responses Wieland stated that there were no 
differences in its selling activities by customer categories within 
each market. In order independently to confirm the absence of separate 
levels of trade within or between the U.S. and home markets, we 
examined Wieland's questionnaire responses for indications that its 
functions as a seller differed qualitatively and quantitatively among 
customer categories. See commentary to section 351.412 of the 
Department's new regulations (62 FR at 27371).
    Wieland sold to original equipment manufacturers in both the U.S. 
and home markets. Wieland performed the same selling and marketing 
functions for its home-market and U.S. customers. Pursuant to section 
773(a)(1)(B)(i) of the Act, we consider the selling functions reflected 
in the starting price of home-market sales before any adjustments. Our 
analysis of the questionnaire response leads us to conclude that sales 
within or between each market are not made at different levels of 
trade. Accordingly, we preliminarily find that all sales in the home 
market and the U.S. market were made at the same level of trade. 
Therefore, all price comparisons are at the same level of trade and an 
adjustment pursuant to section 773(a)(7)(A) of the Act is unwarranted.

Cost-of-Production Analysis

    Petitoners alleged on July 16, 1997, that Wieland sold brass sheet 
and strip in the home market at prices below cost of production (COP). 
Based on these allegations, the Department determined, on August 4, 
1997, that it had reasonable grounds to believe or suspect that Wieland 
had sold the subject merchandise in the home market at prices below the 
COP. We therefore initiated a cost investigation in order to determine 
whether the respondent made home-market sales during the POR at prices 
below their COP within the meaning of section 773(b) of the Act.
    Before making any fair value comparisons, we conducted the COP 
analysis described below.

A. Calculation of COP

    We used the COP based on the sum of the respondent's cost of 
materials and fabrication for 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.

B. Test Home-Market Prices

    We used the respondent's weighted-average COP for the period July 
1995 to June 1996. We compared the weighted-average COP figures to 
home-market sales of the foreign like product as required under section 
773(b) of the Act. In determining whether to disregard home-market 
sales made at prices below the COP, we examined whether (1) within an 
extended period of time, such sales were made in substantial 
quantities, and (2) such sales were made at prices which permitted the 
recovery of all costs within a reasonable period of time. On a product-
specific basis, we compared the COP to the home-market prices (not 
including VAT), less any applicable movement charges, discounts, and 
rebates.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of respondent's sales of a given product were at prices less 
than the 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 respondent's sales 
of a given product during the POR were at prices less than the COP, we 
found that sales of that model were made in substantial quantities 
within an extended period of time, in accordance with sections 
773(b)(2) (B) and (C) of the Act, and were not at prices which would 
permit recovery of all costs within an extended period of time, in 
accordance with section 773(b)(2)(D) of the Act. When we found that 
below-costs sales had been made in substantial quantities and were not 
at prices which would permit recovery of all costs within a reasonable 
period of time, we disregarded the below-cost sales in accordance with 
section 773(b)(1) of the Act.
    On January 8, 1998 the U.S. Court of Appeals for the Federal 
Circuit issued a decision in Cemex v. United States, WL 3626 (Fed. 
Cir). In that case, based on the pre-URAA version of the Act, the Court 
discussed the appropriateness of using constructed value (CV) as the 
basis for foreign market value when the Department finds foreign market 
sales to be outside the ordinary course of trade. This issue was not 
raised by any party in this proceeding. However, the URAA amended the 
definition of sales outside the ordinary course of trade to include 
sales below cost. See Section 771(15) of the Act. Consequently, the 
Department has reconsidered its practice in accordance with this court 
decision and has determined that it would be inappropriate to resort 
directly to CV, in lieu of foreign market sales, as the basis for NV if 
the Department finds foreign market sales of merchandise identical or 
most similar to that sold in the United States to be outside the 
ordinary course of trade. Instead, the Department will use sales of 
similar merchandise, if such sales exist. The Department will use CV as 
the basis for NV only when there are no above-cost sales that are 
otherwise suitable for comparison. Therefore, in this proceeding, when 
making comparisons in accordance with section 771(16) of the Act, we 
considered all products sold in the home market as described in the 
Scope of Investigation section of this notice, above, that were in the 
ordinary course of trade for purposes of determining appropriate 
product comparisons to U.S. sales. Where there were no sales of 
identical merchandise in the home market made in the ordinary course of 
trade to compare to U.S. sales, we compared U.S. sales to sales of the 
most similar foreign like product made in the ordinary course of trade, 
based on the information provided by SKC in response to our antidumping 
questionnaire. We have implemented the Court's decision in this case to 
the extent that the data on the record

[[Page 16966]]

permitted. Since there were sufficient sales above cost, it was not 
necessary to calculate constructed value in this case.

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) 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.

Preliminary Results of the Review

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

                   Brass Sheet and Strip from Germany                   
------------------------------------------------------------------------
                                                              Weighted- 
                                                               average  
               Producer/manufacturer/exporter                   margin  
                                                              (percent) 
------------------------------------------------------------------------
Wieland....................................................         0.85
------------------------------------------------------------------------

    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 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 of this notice. The Department will publish a 
notice of the final results of the 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.

Cash Deposit

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) the cash deposit rate 
for Wieland will be the rate established in the final results of this 
administrative review (no deposit will be required for a zero or de 
minimis margin, i.e., margin lower than 0.5 percent); (2) for 
merchandise exported by manufacturers or exporters not covered in these 
reviews but covered in a previous segment of these proceedings, the 
cash deposit rate will be the company specific rate published for the 
most recent segment; (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) if neither the exporter nor the manufacturer 
is a firm covered in these or any prior review, the cash deposit rate 
will be 8.87 percent, the all others rate established in the LTFV 
investigation. These deposit requirements, 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. These preliminary results of 
review are issued and published in accordance with sections 751(a)(1) 
and 777(i)(1) of the Act and 19 CFR 353.22.

    Dated: March 31, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-9095 Filed 4-6-98; 8:45 am]
BILLING CODE 3510-DS-M