[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Notices]
[Pages 59524-59527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29543]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-830]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Stainless Steel Plate in Coils From Taiwan

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

EFFECTIVE DATE: November 4, 1998.

FOR FURTHER INFORMATION CONTACT: Joanna Gabryszewski, Rebecca Trainor, 
or Maureen Flannery, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0780, (202) 482-0666 or (202) 482-3020, respectively.

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. In addition, unless 
otherwise indicated, all citations to the Department of Commerce (``the 
Department'') regulations are to the regulations at 19 CFR Part 351, 62 
FR 27296 (May 19, 1997).

Preliminary Determination

    We preliminarily determine that stainless steel plate in coils 
(``SSPC'') from Taiwan are being, or are likely to be, sold in the 
United States at less than fair value (``LTFV''), as provided in 
section 733 of the Act. The estimated margins of sales at LTFV are 
shown in the ``Suspension of Liquidation'' section of this notice.

Case History

    On April 20, 1998, the Department initiated antidumping duty 
investigations of imports of stainless steel plate in coils from 
Belgium, Canada, Italy, South Africa, South Korea, and Taiwan (Notice 
of Initiation of Antidumping Investigations: Stainless Steel Plate in 
Coils From Belgium, Canada, Italy, South Africa, South Korea and Taiwan 
(63 FR 20580, April 27, 1998)). Since the initiation of this 
investigation the following events have occurred:
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage. On May 8, 1998, Armco, Inc.; 
J&L Specialty Steel, Inc.; Lukens, Inc.; North American Stainless; the 
United Steelworkers of America, AFL-CIO/CLC; the Butler Armco 
Independent Union; and the Zanesville Armco Independent Organization, 
Inc. (``petitioners'') submitted comments stating that, while they 
believed the scope of the investigations was accurate, they wished to 
clarify certain issues concerning product coverage. The Department has 
determined that the parties' comments do not warrant a change in the 
scope language.
    During the month of May 1998, the Department requested information 
from the American Institute in Taiwan (AIT) to identify producers/
exporters of the subject merchandise. The AIT identified seven 
companies in Taiwan as exporters of subject merchandise. Three 
companies, Chang Mien Industries Co., Ltd., Tang Eng Iron Works Co., 
Ltd., and Chia Far Industrial Factory Co., Ltd., informed the 
Department that they did not export the subject merchandise to the 
United States during the POI. In May 1998, the Department also 
requested and received comments from petitioners and potential 
respondents in these investigations regarding the model matching 
criteria.
    On May 15, 1998, the United States International Trade Commission 
(``ITC'') notified the Department of its affirmative preliminary injury 
determination in this case.
    On May 27, 1998, the Department issued antidumping duty 
questionnaires to Yieh United Steel Corporation (``YUSCO''), Chien 
Shing Stainless Steel Co., Ltd. (``Chien Shing''), Ta Chen Stainless 
Steel Pipe, Ltd. (``Ta Chen''), and Tung Mung Development Co. Ltd. 
(``Tung Mung'').

[[Page 59525]]

    On June 4, 1998, Tung Mung stated in a letter to the Department 
that it did not export subject merchandise to the United States during 
the POI.
    Chien Shing sent a letter in response to the Department's 
questionnaire on June 24, 1998. Based on that letter, it is unclear 
whether Chien Shing had sales of subject merchandise to the United 
States during the POI. We are in the process of investigating whether 
Chien Shing sold SSPC to the United States, or to third parties for 
export to the United States, during the POI.
    On June 24, 1998, the Department received a response to Section A 
of the questionnaire from YUSCO. The Department received YUSCO's 
response to Sections B and C of the questionnaire on July 21, 1998 and 
the Section D response on September 25, 1998. Petitioners filed 
comments on YUSCO's questionnaire responses in July, August, and 
September 1998. The Department issued supplemental questionnaires for 
Sections A, B, C and D to YUSCO in July, August, September, and October 
1998 and received responses to these questionnaires in August, 
September, and October 1998.
    Ta Chen responded to Section A of the questionnaire on June 24, 
1998. On July 14, 1998, Ta Chen submitted a letter to the Department 
indicating that Ta Chen, TCI, and their affiliates (hereafter, 
collectively ``Ta Chen'') did not sell subject merchandise during the 
POI which was produced by any Taiwan manufacturer other than YUSCO. 
YUSCO reported in its Section A questionnaire response that it knew at 
the time of sale that the merchandise it sold to Ta Chen was destined 
for the United States. Based on the above, the Department rescinded its 
request for Ta Chen to respond to Sections B and C of the 
questionnaire. See letter from Edward Yang to Peter Koenig, Ablondi, 
Foster, Sobin & Davidow, P.C., dated July 22, 1998.
    On July 28, 1998, pursuant to section 733(c)(1)(A) of the Act, the 
petitioners made a timely request to postpone the preliminary 
determinations for thirty days. The Department determined that these 
investigations are extraordinarily complicated and that additional time 
is necessary beyond the thirty days requested by petitioners for the 
Department to make its preliminary determinations. On August 14, 1998, 
the Department postponed the preliminary determinations until no later 
than October 27, 1998. (See Stainless Steel Plate in Coils from 
Belgium, Canada, Italy, South Africa, South Korea, and Taiwan; Notice 
of Postponement of Preliminary Determinations in Antidumping Duty 
Investigations, 63 FR 44840, (August 21, 1998)).
    On August 11, 1998, petitioners alleged that Ta Chen and/or its 
affiliated U.S. importer, Ta Chen International (TCI), are reselling 
subject merchandise in the United States at prices less than Ta Chen's 
cost of acquisition and related selling and movement expenses. After 
considering the merits of petitioners' allegation, the Department 
initiated a middleman dumping investigation on August 28, 1998. (See 
Memorandum to Joseph Spetrini, Stainless Steel Plate In Coils From 
Taiwan: Whether to Initiate a Middleman Dumping Investigation, August 
28, 1998, on file in room B-099 of the Commerce Department.) Also on 
this day, the Department issued a questionnaire to Ta Chen. We received 
Ta Chen's questionnaire response on October 7, 1998, too late to issue 
a supplemental questionnaire and incorporate the results thereof in 
these preliminary results. For further details, see the ``Middleman 
Dumping'' section below.
    On August 20, 1998, petitioners amended the antidumping petitions 
to include Allegheny Ludlum Corporation as an additional petitioner.

Scope of Investigation

    For purposes of these investigations, the product covered is 
certain stainless steel plate in coils. Stainless steel is an alloy 
steel containing, by weight, 1.2 percent or less of carbon and 10.5 
percent or more of chromium, with or without other elements. The 
subject plate products are flat-rolled products, 254 mm or over in 
width and 4.75 mm or more in thickness, in coils, and annealed or 
otherwise heat treated and pickled or otherwise descaled. The subject 
plate may also be further processed (e.g., cold-rolled, polished, etc.) 
provided that it maintains the specified dimensions of plate following 
such processing. Excluded from the scope of this petition are the 
following: (1) plate not in coils, (2) plate that is not annealed or 
otherwise heat treated and pickled or otherwise descaled, (3) sheet and 
strip, and (4) flat bars.
    The merchandise subject to this investigation is currently 
classifiable in the Harmonized Tariff Schedule of the United States 
(HTS) at subheadings: 7219.11.00.30, 7219.11.00.60, 7219.12.00.05, 
7219.12.00.20, 7219.12.00.25, 7219.12.00.50, 7219.12.00.55, 
7219.12.00.65, 7219.12.00.70, 7219.12.00.80, 7219.31.00.10, 
7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 
7219.90.00.80, 7220.11.00.00, 7220.20.10.10, 7220.20.10.15, 
7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10, 
7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.90.00.10, 
7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTS 
subheadings are provided for convenience and Customs purposes, the 
written description of the merchandise under investigation is 
dispositive.

Period of Investigation

    The period of investigation (``POI'') is January 1, 1997, through 
December 31, 1997.

Chien Shing

    As noted above, we are in the process of investigating whether 
Chien Shing sold SSPC to the United States, or to third parties for 
export to the United States, during the POI. For this preliminary 
determination, we are treating Chien Shing as a non-shipper; therefore, 
it falls within the ``all others'' duty rate.

Middleman Dumping

    Normally a determination of whether there are sales at less than 
fair value focuses on the price at which merchandise is first sold in 
the United States or for export to the United States. However, where a 
trading company (middleman) purchases for export to the United States, 
that trading company can, in turn, be the cause of, or contribute to, 
less-than-fair-value sales. Congress, in the legislative reports to the 
Trade Agreements Act of 1979, left to this agency the task of 
establishing a methodology which would accurately capture this 
``middleman dumping.'' See Fuel Ethanol from Brazil; Final 
Determination of Sales at Less Than Fair Value, 51 FR 5572, 5573 
(February 14, 1986). Based on the allegation that Ta Chen was selling 
subject merchandise to the United States at a loss (i.e. at prices 
which were, after the deduction of all costs incurred in selling the 
merchandise in the United States, lower than its costs of acquisition 
from unrelated suppliers), we analyzed Ta Chen's prices and costs 
relative to all sales to the United States during the POI.
    In accordance with the methodology discussed in our Final Results 
of Redetermination Pursuant to Court Remand; Prestressed Concrete 
Strand from Japan, filed in Mitsui & Co., Ltd. v. the United States, 
Slip Op. 97-49 (April 22, 1997), we determined whether a substantial 
portion of Ta Chen's sales were below acquisition costs by comparing 
the total value of SSPC sales below acquisition costs to the total 
value of SSPC sales. We first

[[Page 59526]]

identified sales below acquisition cost by comparing Ta Chen's resale 
price for SSPC to its acquisition cost for SSPC. We used the supplier's 
invoice price to Ta Chen as the acquisition cost. We based the U.S. 
resale prices on Ta Chen's sales to unaffiliated customers in the 
United States. From that starting price we deducted movement expenses 
and selling expenses incurred by Ta Chen (freight, insurance, 
commissions, warehousing charges, discounts, U.S. duties, brokerage and 
handling fees, and indirect selling expenses), where applicable. We 
then compared that price, after deductions, to the acquisition cost. 
Based on these results, we determine that Ta Chen did not make a 
substantial portion of its sales below acquisition cost. Because, at 
this preliminary stage, our findings indicate that the portion of 
below-acquisition-cost sales was not substantial, an examination of 
whether prices were substantially below acquisition cost is unnecessary 
at this time. See Memorandum to the File: Analysis for the Preliminary 
Determination of SSPC from Taiwan: Middleman Dumping Investigation: Ta 
Chen, dated October 27, 1998.
    We note that this preliminary finding of no middleman dumping is 
based upon the information available to us at the time of this 
preliminary determination. Because Ta Chen's responses were received on 
October 7 and 14, 1998, we have not been able to issue a supplemental 
questionnaire and incorporate the answers thereto in our analysis. We 
intend to revisit this issue after issuing a supplemental 
questionnaire, incorporating the revised data into our analysis, and 
verifying the accuracy of that data.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent, covered by the description in the 
Scope of Investigation section, above, and sold in the home market 
during the POI, 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 next most similar foreign like 
product on the basis of the characteristics listed in the antidumping 
duty questionnaire and the May 27, 1998 reporting instructions.

Fair Value Comparisons

    To determine whether sales of SSPC from Taiwan to the United States 
were made at less than fair value, we compared export price (``EP'') or 
constructed export price (``CEP'') to the Normal Value (``NV'') , as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice, below. In accordance with section 777A(d)(1) of the Act, we 
calculated weighted-average prices for NV and compared these to 
individual U.S. transactions.

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 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.
    To determine whether NV sales are at a different LOT than EP, the 
Department examines 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. 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).
    YUSCO claimed that there was only one level of trade of customers 
in its home market. Although YUSCO sold to both en-users and 
distributors, it provided virtually the same services to both types of 
customers. Based on our analysis, we agree that YUSCO had one level of 
trade in its home market.
    In the United States, YUSCO sold through unaffiliated distributors 
only. We found that YUSCO provided more services to the home market 
customers than to U.S. customers. YUSCO stated that it could not 
quantify the price difference attributable to differences in level of 
trade. Therefore, YUSCO did not make any claim for an LOT adjustment or 
demonstrate that any price differentials were due to differences in LOT 
and not any other factors. Therefore, we compared all U.S. sales to 
home market sales at that one home market level, and have not made an 
LOT adjustment. See Memorandum to the File: Preliminary Determination 
of Sales at Less Than Fair Value: Yieh United Steel Corporation 
(``YUSCO''), dated October 27, 1998.

United States Price

    In calculating the United States Price (USP), we used EP, in 
accordance with sections 772 (a) and (c) of the Act, because YUSCO's 
sales to the first unaffiliated purchaser occurred before importation 
into the United States, and because CEP methodology was not otherwise 
indicated. We based EP on the packed prices to the first unaffiliated 
purchaser in the United States. We made deductions from the starting 
price, where appropriate, for the following movement expenses, in 
accordance with section 772(c)(2)(A) of the Act: foreign inland 
freight, container handling fees, certification fees, and brokerage and 
handling expenses. No other adjustments were claimed or allowed.

Normal Value

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared YUSCO's 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)(B) of the Act. Since 
YUSCO'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 for the subject merchandise, we determined that the home market 
was viable. Therefore, we have based NV on home market sales.

Cost of Production Analysis

    On August 10, 1998, petitioners in this investigation filed a 
timely sales-below-cost allegation against YUSCO. Petitioners filed 
revisions to their allegation on August 20, 1998. On August 25, 1998, 
the Department initiated a cost of production (``COP'') investigation 
of YUSCO to determine whether sales were made at prices less than the 
COP. We conducted the COP analysis described below.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of YUSCO's cost of materials, labor, overhead, and 
general expenses. On October 15, 1998, the Department issued a 
supplemental section D questionnaire to YUSCO. The supplemental 
questionnaire response

[[Page 59527]]

was not received in time to use in calculating COP for this preliminary 
determination. This information will be included in the Department's 
final determination.
B. Test of Home Market Prices
    We compared YUSCO's reported weighted-average COP 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 less than the COP, we examined whether (1) within an extended 
period of time, such sales were made in substantial quantities, and (2) 
whether 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, less direct and indirect selling expenses, 
to home market prices, less any applicable movement charges, quantity 
discounts, and direct and indirect selling expenses.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of respondent's home market sales of a given product were at 
prices less than the COP, we do not disregard any below-cost sales of 
that product because such below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product are made at prices less than the COP, we 
determine such sales to have been made in ``substantial quantities'' 
within an extended period of time in accordance with section 
773(b)(2)(B) of the Act. In such cases, because we compared prices to 
weighted-average COPs for the POI, we also determine that such sales 
were not made at prices which would permit recovery of all costs within 
a reasonable period of time, in accordance with section 773(b)(2)(D) of 
the Act, and we disregard the below-cost sales. Where all sales of a 
specific product are made at prices below the COP, we disregard all 
sales of that product.

Price-to-Price Comparisons

    Because all of YUSCO's home market sales were above COP, we based 
NV on prices to home market customers. We did not make adjustments for 
physical differences in the merchandise, as all of YUSCO's sales to the 
United States were identical to sales in the home market.
    We calculated NV based on prices to unaffiliated home market 
customers. We made deductions for quantity discounts and inland 
freight. In addition, we made circumstance-of-sale adjustments for 
differences in credit and warranty expenses, where appropriate. In 
accordance with section 773(a)(6), we deducted home market packing 
costs and added U.S. packing costs.

Currency Conversion

    We made currency conversions into U.S. dollars based on the 
exchange rates in effect on the dates of the U.S. sales as certified by 
the Federal Reserve Bank, in accordance with section 773A of the Act.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports of subject 
merchandise that are entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register. We will instruct the Customs Service to require a 
cash deposit or the posting of a bond equal to the weighted-average 
amount by which the NV exceeds the U.S. price, as indicated in the 
chart below. These suspension-of-liquidation instructions will remain 
in effect until further notice. The weighted-average dumping margins 
are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
YUSCO......................................................        67.68
All Others.................................................        67.68
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we are notifying the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry.

Public Comment

    Case briefs or other written comments in at least ten copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than 50 days after the publication of the preliminary 
determination, and rebuttal briefs, limited to issues raised in case 
briefs, no later than 55 days after the publication of the preliminary 
determination. A list of authorities used and an executive summary of 
issues should accompany any briefs submitted to the Department. Such 
summary should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, the hearing 
will be held on January 7, 1999, time and room to be determined, at the 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs. If 
this investigation proceeds normally, we will make our final 
determination by January 10, 1999.
    This determination is issued and published in accordance with 
sections 733(d) and 777(i)(1) of the Act.

    Dated: October 27, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-29543 Filed 11-3-98; 8:45 am]
BILLING CODE 3510-DS-P