[Federal Register Volume 63, Number 232 (Thursday, December 3, 1998)]
[Notices]
[Pages 66785-66787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32212]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-830]


Notice of Amended 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.

ACTION: Amended preliminary determination of antidumping duty 
investigation.

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SUMMARY: On November 4, 1998, the Department of Commerce (``the 
Department'') published the preliminary determination of its 
antidumping duty investigation of stainless steel plate in coils 
(``SSPC'') from Taiwan. This investigation covers two respondents, Yieh 
United Steel Corporation (``YUSCO'') and Ta Chen Stainless Steel Pipe, 
Ltd. (``Ta Chen'').
    YUSCO submitted a ministerial error allegation on November 6, 1998 
with respect to the preliminary determination published on November 4, 
1998. On November 10, 1998, petitioners (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 Zanesville Armco Independent Organization, Inc.) submitted 
ministerial error allegations with respect to the middleman dumping 
portion of the preliminary determination. Based on the correction of 
certain ministerial errors made in the preliminary determination, we 
are amending our preliminary determination. (See 19 CFR 351.224(e).)

EFFECTIVE DATE: December 3, 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, N.W., Washington, D.C. 20230; telephone: (202) 
482-0780, (202) 482-0666 or (202) 482-3020, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    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 references to the Department's regulations are to the 
regulations set forth at 19 CFR part 351.

Significant Ministerial Errors

    We are amending the preliminary determination of sales at less than 
fair value for SSPC from Taiwan to reflect the correction of 
significant ministerial errors made in the margin calculations 
regarding both YUSCO and Ta Chen in that determination, pursuant to 19 
CFR 224(g)(1) and (2). A significant ministerial error is defined as a 
correction which, singly or in combination with other errors, (1) would 
result in a change of at least 5 absolute percentage points in, but not 
less than 25 percent of, the weighted average dumping margin calculated 
in the original (erroneous) preliminary determination; or (2) would 
result in a difference between a weighted-average dumping margin of 
zero or de minimis and a weighted-average dumping margin of greater 
than de minimis or vice versa. We are publishing this amendment to the 
preliminary determination pursuant to 19 CFR 351.224(e).

Scope of the 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 investigation 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

[[Page 66786]]

merchandise under investigation is dispositive.

Period of Investigation

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

Background

    On November 4, 1998, the Department published in the Federal 
Register its notice of preliminary determination of the antidumping 
duty investigation of SSPC from Taiwan (Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Stainless Steel Plate 
in Coils from Taiwan (63 FR 59524 (November 4, 1998)). We preliminarily 
calculated a dumping margin of 67.68 percent based on YUSCO's sales. In 
addition, after initiating a middleman dumping investigation, we 
preliminarily determined that Ta Chen had not engaged in middleman 
dumping. (See Memorandum to the File: Analysis for the Preliminary 
Determination of SSPC from Taiwan: Middleman Dumping Investigation: Ta 
Chen (October 27, 1998).)

YUSCO

    On November 6, 1998, YUSCO submitted timely written allegations 
that the Department made a ministerial error which resulted in a change 
of at least 5 absolute percentage points in, but not less than 25 
percent of, the weighted average margin calculated in the preliminary 
determination. YUSCO alleged that the Department erred by failing to 
convert U.S. movement expenses reported in New Taiwan Dollars (NTD) 
into U.S. dollars.
    We agree with YUSCO that we inadvertently failed to convert U.S. 
movement expenses, reported by YUSCO in NTD, into U.S. dollars. Because 
the ministerial error is significant, as defined in 19 CFR 351.224(g), 
we are amending our preliminary determination. YUSCO's amended rate is 
de minimis. We have set YUSCO's cash deposit rate at zero. (See 
``Suspension of Liquidation'' section, below.)

Ta Chen

    On August 11, 1998, petitioners alleged that Ta Chen Stainless 
Steel Pipe, Ltd. and/or its affiliated U.S. importer, Ta Chen 
International (collectively Ta Chen), were reselling subject 
merchandise in the United States at prices less than Ta Chen's cost of 
acquisition and related selling and movement expenses. In our 
preliminary determination, we preliminarily found that Ta Chen had not 
engaged in middleman dumping because the portion of below-acquisition-
cost sales was not substantial. (63 FR at 59526)(November 4, 1998).)
    On November 10, 1998, petitioners alleged that the Department's 
computer program, upon which it based its preliminary determination 
that Ta Chen was not engaging in middleman dumping during the POI, 
contained a number of clerical errors. On November 17, 1998, Ta Chen 
filed a response to the petitioners' comments. In accordance with 
section 351.224(c)(3) of the Department's regulations, we do not 
consider replies to ministerial error comments submitted in connection 
with a preliminary determination. Therefore, we have returned Ta Chen's 
rebuttal comments and have not considered them for this amended 
preliminary determination. (See 19 CFR 351.224(c).)
    First, petitioners claim that the Department omitted the following 
U.S. selling expenses from the analysis: bank fees incurred in Taiwan 
and the United States; imputed credit expenses; and certain indirect 
selling expenses. Petitioners argue that these expenses should be 
deducted from Ta Chen's U.S. price in accordance with Fuel Ethanol from 
Brazil; Final Determination of Sales at Less Than Fair Value, 51 FR 
5572, 5573 (February 14, 1986) (Fuel Ethanol). Because these were 
actual costs incurred, we intended to deduct these costs. Thus, we 
agree that we committed a ministerial error in not deducting bank fees 
and indirect selling expenses from U.S. price. We have deducted these 
expenses for this amended preliminary determination. There was no 
ministerial error in not deducting imputed credit, however, because 
only actual selling expenses should be deducted in the middleman 
dumping analysis. See Mitsui & Co., Ltd. v. the United States, Slip Op. 
97-49 (April 22, 1997) (Mitsui Remand Determination). We stated that:

    ``[imputed credit expenses and inventory carrying costs] 
represent opportunity costs, not actual expenses to the company. In 
analyzing whether prices are above or below the cost of production, 
it is the Department's practice to base its calculation on actual 
costs rather than imputed expenses.'' (Mitsui Remand Determination 
at 10.)

    Second, petitioners argue that the Department inadvertently based 
the middleman dumping analysis on only a portion of Ta Chen's resales 
by deleting from the database any resale where the quantity was 
reported on a theoretical basis, i.e., for sheet. Petitioners claim 
that all reported resales are of subject merchandise regardless of 
whether it was resold as a coil or as sheet, because the product 
imported was stainless steel sheet in coil, i.e., subject merchandise. 
Petitioners argue that, since Ta Chen provided the data for these 
sales, converting them from theoretical to actual, it is not necessary 
to eliminate any sales from the database.
    We agree with petitioners in part. YUSCO reported its sales on an 
actual gauge basis, while Ta Chen reported its sales on a nominal 
(theoretical) gauge basis. Ta Chen included a variable in its database 
that provided the actual gauge of the merchandise it purchased from its 
supplier, YUSCO. Ta Chen reported some sales of merchandise for which 
no corresponding YUSCO sale was reported, because the actual gauge was 
less than 4.75 mm. In the preliminary determination, we intended to 
remove only these sales. In doing so, we inadvertently identified these 
sales by weight rather than by gauge--that is, we removed from the 
database sales that Ta Chen made on a nominal weight basis. For this 
amended preliminary determination, we identified these sales by gauge, 
and have only removed those sales that have an actual gauge of less 
than 4.75 mm.1
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    \1\ We note that we requested that YUSCO report all sales of 
merchandise that nominally fit the gauge included in the scope of 
the investigation, i.e., with gauge greater than or equal to 4.75 
mm. However, YUSCO had reported sales only on an actual basis as of 
the time of the preliminary determination, i.e., it reported sales 
of merchandise with an actual gauge of greater than or equal to 4.75 
mm. We intended to include in our preliminary analysis only Ta 
Chen's resales corresponding to merchandise reported by YUSCO. By 
letter to YUSCO of November 6, 1998, we have reiterated our request 
for data based on the nominal gauge.
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    Third, petitioners claim that the Department made a ministerial 
error by converting Ta Chen's acquisition price to U.S. dollars based 
on the date of Ta Chen's sale to the first unaffiliated U.S. customer, 
instead of the date of YUSCO's invoice to Ta Chen. We disagree that 
this was a ministerial error. In accordance with our longstanding 
practice, we intentionally based currency conversions on the date of 
sale. See 19 CFR 351.415(a) (Currency Conversion).
    Fourth, petitioners claim that the Department incorrectly 
calculated the percentage of Ta Chen's U.S. sales that are below the 
acquisition cost, because we miscalculated the total U.S. sales value 
and the total value of sales below acquisition cost.
    We agree with petitioners, and have corrected this ministerial 
error. In our preliminary calculations, we intended to calculate total 
below-acquisition-cost value and total U.S. sales value by multiplying 
per unit prices by their corresponding quantities, and then summing 
these values. Instead, for both calculations, we first summed per unit

[[Page 66787]]

values and their corresponding quantities, and then we multiplied the 
total value by the total quantity. After making the appropriate 
correction, we divided the total value of below-acquisition-cost sales 
by the total value of all sales, as we did in the Preliminary 
Determination, to arrive at the ratio of the below-acquisition-cost-
sales value to the value of all sales to the United States. See the 
Analysis Memorandum for the Amended Preliminary Determination (Amended 
Preliminary Memo) on file in room B-099 of the Commerce Department.
    As a result of the correction of these ministerial errors, we have 
determined that Ta Chen sold subject merchandise at a loss because Ta 
Chen's prices were, after the deduction of all costs incurred in 
selling the merchandise in the United States, lower than its costs of 
acquisition from YUSCO, an unaffiliated producer during the POI. See 
Amended Preliminary Memo.
    In accordance with the methodology we used in Mitsui Remand 
Determination, we determined whether a substantial portion of Ta Chen's 
U.S. sales were below acquisition costs by comparing the total value of 
stainless steel plate sold below acquisition cost to the total value of 
all stainless steel plate sales made by Ta Chen during the POI. We 
first identified sales below acquisition cost by comparing Ta Chen's 
resale price for stainless steel plate sold during the POI to its 
acquisition cost for this merchandise. We used YUSCO'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 discounts, movement expenses (freight, 
insurance, U.S. duties, and brokerage and handling fees), and the 
actual selling expenses incurred by Ta Chen (commissions, warehousing 
charges, bank charges, and indirect selling expenses), where 
applicable. We then compared that price, after deductions, to the 
acquisition cost.
    Based on these amended findings, we preliminarily determine that Ta 
Chen made a substantial portion of its sales below acquisition cost, 
because 34.7 percent of Ta Chen's resales to the United States were at 
prices below its acquisition cost. As a result of this finding, we have 
examined whether Ta Chen's U.S. prices were substantially below its 
acquisition costs from YUSCO to determine whether Ta Chen engaged in 
middleman dumping during the POI.
    As we stated in the Preliminary Determination, Congress has left to 
the Department the discretion to devise a methodology which would 
accurately capture middleman dumping. See S. Rep. No. 249, 96th Cong., 
1st Sess. at 94 (1979). We have considered the methodology used in Fuel 
Ethanol, and have concluded that, given the facts before us for this 
amended preliminary determination, the methodology described below is 
the appropriate one for purposes of this amended preliminary 
determination. To determine the magnitude of the losses incurred by Ta 
Chen in selling YUSCO's subject merchandise to the United States during 
the POI, we divided the amount of losses by the total sales value of 
all sales. By ``amount of losses'' we mean the sum of the cost less the 
adjusted sales price of each below-acquisition-cost sale, multiplied by 
the respective quantity of each sale. By ``total sales value'' we mean 
the sum of the sales price of each sale (whether or not below 
acquisition cost) multiplied by its respective quantity. Based upon 
this calculation, we have determined that Ta Chen's losses on U.S. 
sales of subject merchandise during the POI are 3.00 percent, which we 
deem to be substantial. Therefore, we preliminarily find that Ta Chen 
engaged in middleman dumping during the POI.
    Where a producer sells through an unaffiliated trading company and 
has knowledge of the ultimate destination of its merchandise, we 
normally focus only on the producer's sales to determine the margin of 
dumping. However, as we stated in our Preliminary Determination, very 
infrequently, a producer may sell to an unaffiliated trading company 
which, in turn, sells the producer's merchandise at prices below the 
trading company's acquisition costs, thereby engaging in middleman 
dumping. Where we find middleman dumping in an investigation, as here, 
we must calculate a cash deposit rate that reflects that middleman 
dumping. Additionally, any dumping which occurs from the producer to 
the trading company must be included in the margin calculation to 
capture the full amount of the dumping. Therefore, we have assigned a 
cash deposit rate of 3.08 percent to sales produced by YUSCO and sold 
to the United States through Ta Chen. This reflects YUSCO's margin on 
U.S. sales to Ta Chen as well as Ta Chen's losses on sales to the 
United States.

Amended Preliminary Determination

    As a result of our corrections of ministerial errors, we have 
determined the following amended weighted-average dumping margins 
apply.

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      percentage
------------------------------------------------------------------------
YUSCO/Ta Chen..............................................         3.08
All Others.................................................         3.08
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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 normal value exceeds the U.S. price, as indicated 
in the chart above. These suspension-of-liquidation instructions will 
remain in effect until further notice.
    This amended preliminary determination and notice are in accordance 
with section 703(d)(2) of the Act (19 CFR 351.224).
    Dated: November 27, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-32212 Filed 12-2-98; 8:45 am]
BILLING CODE 3510-DS-P