[Federal Register Volume 64, Number 25 (Monday, February 8, 1999)]
[Notices]
[Pages 6039-6042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2999]



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DEPARTMENT OF COMMERCE

INTERNATIONAL TRADE ADMINISTRATION
[A-122-601]


Brass Sheet and Strip from Canada: Preliminary Results of 
Antidumping Duty Administrative Review, Intent Not To Revoke Order in 
Part, and Extension of Time Limit

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review, intent not to revoke order in part, and 
extension of time limit.

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SUMMARY: In response to separate requests by Wolverine Tube (Canada), 
Inc. (Wolverine), the respondent, and by Hussey Copper, Ltd,; The 
Miller Company; Olin Corporation; 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, and United Steelworkers of 
America (AFL-CIO), collectively, the petitioner, the Department of 
Commerce (the Department) is conducting an administrative review of the 
antidumping duty order on brass sheet and strip from Canada. The review 
covers one manufacturer/exporter of this merchandise to the United 
States, Wolverine. The period covered is January 1, 1997 through 
December 31, 1997. As a result of the review, the Department has 
preliminarily determined that no dumping margins exist for his 
respondent for the covered period. However, we do not intend to revoke 
the order with respect to brass sheet and strip from Canada 
manufactured by Wolverine, since we found in our final results covering 
the 1996 period of review that sales made during that period were made 
below normal value.

    We invite interested parties to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument (1) a statement of issue and (2) a brief 
summary of the argument.

EFFECTIVE DATE: February 8, 1999.

FOR FURTHER INFORMATION CONTACT: Paul Stolz or James Terpstra, Office 
of Antidumping/Countervailing Duty Enforcement, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-4474 or 482-3965, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    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 refer to the 
regulations codified at 19 CFR Part 351 (1998).

Background

    The Department published an antidumping duty order on brass sheet 
and strip from Canada on January 12, 1987 (52 FR 1217). On January 12, 
1998, the Department published a notice of ``Opportunity to Request an 
Administrative Review'' of the antidumping duty order on brass sheet 
and strip from Canada (63 FR 1820). On January 30, 1998, a 
manufacturer/exporter, Wolverine, requested an administrative review of 
its exports of the subject merchandise to the United States for the 
period of review (POR), January 1, 1997, through December 31, 1997. In 
accordance with 19 CFR 351.213 we published a notice of initiation of 
administrative review on February 27, 1998 (63 FR 10002). The 
Department is now conducting this administrative review in accordance 
with section 751 of the Act.

Scope of Review

    Imports covered by this review are shipments of brass sheet and 
strip (BSS), other than leaded and tinned BSS. 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 would), 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. Although the HTS item numbers are provided 
for convenience and customs purposes, the Department's written 
description of the scope of this order remains dispositive. Pursuant to 
the final affirmative determination of circumvention of the antidumping 
duty order, covering the period September 1, 1990, through September 
30, 1991, we determined that brass plate used in the production of BSS 
falls within the scope of the antidumping duty order on BSS from 
Canada. See Brass Sheet and Strip from Canada: Final Affirmative 
Determination of Circumvention of Antidumping Duty Order, 58 FR 33610 
(June 18, 1993).
    The POR is January 1, 1997 through December 31, 1997. The review 
involves one manufacturer/exporter, Wolverine.

Export Price

    We used export price (EP), as defined in section 772 of the Act, 
because the merchandise was sold to unaffiliated U.S. purchasers prior 
to the date of importation and because no other circumstances indicated 
that constructed export price was appropriate. We calculated EP based 
on delivered prices. In accordance with section 772(c)(1) of the Act, 
we adjusted EP for brokerage and handling, foreign and U.S. inland 
freight, and customs duty. We also recalculated imputed credit expenses 
for U.S. sales based on the U.S. prime interest rate. See ``Further 
Developments'' as described below. No other adjustments to EP were 
claimed or allowed.

Normal Value (NV)

A. Viability

    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 Wolverine'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)(C) of the Act. Because of Wolverine's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales of the 
subject merchandise, we determined that the home market provides a 
viable basis for calculating NV for Wolverine.

B. Below Cost of Production Test

    Because we disregarded sales below the cost of production in the 
1996 POR, the most-recently completed segment of this proceeding, we 
have reasonable grounds to believe or suspect that sales of the foreign 
like product under consideration for determining NV in this review may 
have been at prices below the cost of production (COP), within the 
meaning of section

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773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 773(b)(1) 
of the Act, we initiated a COP investigation of sales by Wolverine (see 
Memorandum to the File, dated March 31, 1998, available in Room B-099 
of the Main Commerce Building). In accordance with section 773(b)(3) of 
the Act, we calculated COP based on the sum of materials and 
fabrication employed in producing the foreign like product, plus 
selling, general, and administrative expenses (SG&A) and the cost of 
all expenses incidental to placing the foreign like product in 
condition packed ready for shipment. We relied on the home market sales 
and COP information Wolverine provided in its questionnaire responses. 
After calculating COP, we tested whether home market sales of subject 
BSS were made at prices below COP within an extended period of time in 
substantial quantities, and whether such prices permitted the recovery 
of all costs within a reasonable period to time. We compared model-
specific COPs to the reported home market prices less any applicable 
movement charges, direct selling expenses, and packing expenses.
    Pursuant to section 773(b)(2)(C) of the Act, where less than twenty 
percent of Wolverine's home market sales for a model were at prices 
less than the COP, we did not disregard any below-cost sales of that 
model because we determined that the below-cost sales were not made 
within an extended period of time in ``substantial quantities.'' Where 
twenty percent or more of Wolverine's home market sales were at prices 
less than the COP, we determined that such sales were made within an 
extended period of time in substantial quantities in accordance with 
section 773(b)(2) (B) and (C) of the Act. To determine whether such 
sales were at prices which would not permit the full recovery of all 
costs within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act, we compared home market prices to the 
weighted-average COPs for the POR. The results of our cost test for 
Wolverine indicated that for certain home market models less than 
twenty percent of the sales of the model were at prices below COP. We 
therefore retained all sales of these models in our analysis and used 
them as the basis for determining NV. Our cost test for Wolverine also 
indicated that for certain other home market models more than twenty 
percent of the home market sales within an extended period of time were 
at prices below COP and would not permit the full recovery of all costs 
within a reasonable period of time. In accordance with section 
773(b)(1) of the Act, we therefore excluded the below-cost sales of 
these models from our analysis and used the remaining above-cost sales 
as the basis for determining NV.

C. Model-Matching

    We calculated NV using prices of BSS products having the same 
characteristics as to form, gauge, width, and alloy. We used the same 
gauge and width groupings and the same model-match methodology in this 
review as in the last completed administrative review (1996). As in the 
1995 and 1996 reviews, we did not rely on ``source'' designations in 
the product codes for model matching purposes since the ``source'' 
(i.e., whether reroll or nonreroll brass is used to make the product) 
does not appear to describe physical characteristics of the resulting 
subject merchandise itself; nor has Wolverine demonstrated that this is 
an appropriate matching criterion. Wolverine claimed in its response 
that the grain density of the reroll material obtained from outside 
suppliers was higher than that of its own cast material. Although this 
may be the case, respondent's claim has not been substantiated on the 
record of this review.
    In addition, we noted in this review that the coding Wolverine 
reported for the ``temper'' matching characteristic included a 
secondary characteristic for ``finish.'' This characteristic had not 
previously been identified by the Department, nor has Wolverine 
adequately demonstrated that it is appropriate to use in model 
matching. Moreover, it is no longer clear whether Wolverine's reported 
temper codes are correct. Therefore, for the preliminary results of 
this review we are not considering ``finish'' or reported temper codes 
as matching characteristics and have adjusted our computer program 
accordingly. We will seek additional information on these issues 
following the preliminary results of this administrative review and 
will incorporate our findings into our analysis for the final results 
of this review. See ``Further Developments'' as described below.
    We calculated NV using monthly weighted-average prices of BSS 
having the same characteristics as to form, gauge, width, and alloy. We 
based NV on the price at which the foreign like product is first sold 
for consumption in the exporting country, in the usual commercial 
quantities and in the ordinary course of trade, and at the same level 
of trade as the export price, in accordance with section 
773(a)(1)(B)(i) of the Act.
    We reduced NV for home market credit and warranty expenses, and 
increased NV for U.S. credit expenses and U.S. warranty expenses in 
accordance with section 773(a)(6)(C)(iii), due to differences in 
circumstances of sale. We reduced NV for home market movement expenses, 
in accordance with section 773(a)(6)(B)(ii); and for packing costs 
incurred in the home market, in accordance with section 
773(a)(6)(B)(i); and increased NV to account for U.S. packing expenses. 
Wolverine reported ``quantity adders'' as a circumstance of sale 
adjustment. However, we have not made corresponding adjustments in this 
review. Wolverine failed to provide sufficient information to determine 
whether this adjustment should be made. Moreover, in the event that the 
Department determines that an adjustment is appropriate, it is not 
clear that Wolverine has properly quantified sales in both the home and 
U.S. markets. Accordingly, we have determined that the administrative 
record is incomplete with respect to this item and have made no 
corresponding adjustments. See ``Further Developments'' as described 
below.

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 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 
the exporter to an unaffiliated U.S. customer. For CEP, it is the level 
of the constructed sale from the exporter to an affiliated importer, 
after the deductions required under section 772(d) of the Act. 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

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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 this review, Wolverine stated in its questionnaire response that 
it was not requesting a LOT adjustment and therefore did not include 
the corresponding field ``LOTADJH'' in its reported home market sales 
list. Although Wolverine claimed that one of its two customer 
categories required a higher level of support than the other, it did 
not place information on the record in order to detail or quantify any 
possible resulting differences in selling functions which could 
potentially constitute different LOTs. Nor did we request additional 
information with respect to this issue.
    Because the record does not show that Wolverine performed different 
selling functions with respect to different channels of distribution, 
we have preliminarily determined that there is only one LOT in the home 
market. Furthermore, since the record does not indicate differences in 
selling functions between the home market and the U.S. market, we have 
preliminarily determined that no level of trade adjustments under 
section 773(a)(7)(A) of the Act are warranted. However, we will 
reexamine this issue for the final results.

Further Developments

    Both petitioner and respondent have submitted comments regarding 
the calculation of the preliminary results of this review. Submissions 
by both parties included untimely submitted new factual information. 
Therefore, the Department has required deletion of this information. 
However, in reaching its preliminary results, the Department has taken 
note of the portions of these submissions which contained relevant 
argument not based on new factual information. As a result, the 
Department has decided not to make adjustments in these preliminary 
results to the submitted prices for ``adders'' (surcharges on certain 
small quantity orders) and to disregard ``temper'' and ``finish'' as a 
matching characteristics, as described above. In addition, the 
Department has recalculated imputed credit expenses reported for U.S. 
sales. This recalculation was done since Wolverine reported imputed 
credit expenses for U.S. sales based on its home market interest rate. 
Sales to the U.S. market had been made in U.S. dollars, and therefore, 
in accordance with Department policy, imputed credit expenses for these 
sales should have been reported based on the company's U.S. interest 
rate or other applicable U.S. interest rate.
    Moreover, petitioner has requested that we resort to facts 
available with respect to certain portions of the submitted data. 
However, there is insufficient basis on which to make such a 
determination at this time. In order to resolve these issues and 
certain other issues raised by petitioner's and respondent's comments, 
and to determine whether the application of facts available is 
appropriate, the Department has decided that additional information and 
further analysis is necessary. Therefore, following publication of 
these preliminary results, the Department will request additional 
information on ``interest'', ``general and administrative expenses'', 
``finish'', ``temper'', ``packing'', and ``adders'' for use in its 
analysis for the final results of this review. Moreover, since the 
Department will collect and analyze additional information, the 
Department has determined that it is not practicable to complete the 
final results of this administrative review within the original time 
limit, and is therefore extending the due date for the final results of 
this review, pursuant to section 351.213(h)(2) of the Department's 
regulations, until 180 days from publication of these preliminary 
results.

Revocation

    On January 30, 1998, Wolverine submitted its request for an 
administrative review covering the 1997 POR and, pursuant to 19 CFR 
351.222(b), requested revocation of the antidumping duty order with 
respect to Wolverine. In its request, Wolverine stated that it expected 
to receive a de minimis margin in the final results of the 1996 and 
1997 POR reviews. Wolverine noted that these would be the third and 
fourth consecutive de minimis margins received, and thus Wolverine 
would be eligible for revocation in accordance with 19 CFR 
351.222(b)(2), which among other requirements stipulates that the 
respondent requesting revocation has sold the subject merchandise at 
not less than NV for at least three consecutive administrative reviews 
and is not likely to do so in the future. This request was accompanied 
by certifications from the firm that it had not sold the relevant class 
or kind of merchandise at less than NV for a two-year period and 
anticipated receiving a de minimis dumping margin in the 1996 POR and 
in the 1997 POR, and would not sell the relevant class or kind of 
merchandise at less than NV in the future. Wolverine also agreed to its 
immediate reinstatement in the relevant antidumping duty order, as long 
as any firm is subject to this order, if the Department concludes under 
19 CFR 351.222(b)(2)(iii) that, subsequent to revocation, it sold the 
subject merchandise at less than NV.
    However, with respect to the 1996 POR, we found in our final 
results of that review that sales had been made below NV and, 
therefore, the Department's requirements for revocation had not been 
met. See Final Results of Administrative Review and Notice of Intent 
Not To Revoke Order in Part, Brass Sheet and Strip from Canada, 63 FR 
33037 (June 17, 1998). Previously, the Department had found that 
Wolverine's sales reviewed during the eighth (1994) and ninth (1995) 
reviews and under this order were made at not less than NV. The 
Department has also preliminarily determined in this administrative 
review, as described below, that sales under this order were not made 
at less than NV. Nonetheless, in light of the final results of the 
tenth (1996) administrative review, Wolverine is not entitled to 
revocation pursuant to 19 CFR 351.222(b).

Preliminary Results of the Review

    As a result of our comparison of EP to NV, we preliminarily 
determine that a de minimis of (0.39 percent) exists for Wolverine for 
the period January 1, 1997 through December 31, 1997, and we determine, 
preliminarily, not to revoke the antidumping duty order with respect to 
imports of subject merchandise from Wolverine.
    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 30 days of publication of this notice. Any 
hearing will be held 44 days after the date of publication or the first 
workday thereafter. Interested parties may submit case briefs within 30 
days of the publication date of this notice. Rebuttal briefs, limited 
to issues raised in the case briefs, may be filed not later than 37 
days after the date of publication. The Department will publish a 
notice of the final results of this administrative review, which will 
include the results of its analysis of issues raised in any such case 
briefs or at a hearing, within 180 days from publication of these 
preliminary results.
    The following deposit requirements will be effective for all 
shipments of the subject merchandise that are entered, or

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withdrawn from warehouse, for consumption on or after the publication 
date of the final results of this administrative review, as provided by 
section 751(a)(1) of the Act: (1) the cash deposit rate for Wolverine 
will be the rate established in the final results of this review 
(except that no deposit rate will be required for 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 less-than-fair-value (LFTV) 
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 manufacturer nor the exporter 
is a firm covered in this or any previous review, the cash deposit rate 
will be 8.10 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.
    Furthermore, the Department shall determine, and the Customs 
Service shall assess, antidumping duties on all appropriate entries. 
The Department will issue appraisement instructions directly to the 
Customs Service. The final results of this review shall be the basis 
for the assessment of antidumping duties on entries of merchandise 
covered by the determination and for future deposits of estimated 
duties. For Wolverine, for duty assessment purposes, we calculated 
importer-specific assessment rates by aggregating the dumping margins 
calculated for all U.S. sales to each importer and dividing this amount 
by the total entered value of those same sales. This specific rate 
calculated for each importer will be used for the assessment of 
antidumping duties on the relevant entries of subject merchandise 
during the POR. If for the final results of this review we calculate an 
assessment rate for Wolverine of less than 0.5 percent ad valorem, we 
will instruct Customs to liquidate Wolverine's entries of subject 
merchandise during the relevant POR without regard to antidumping 
duties.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and this notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.213, 
351.221.

    Dated: February 1, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-2999 Filed 2-5-99; 8:45 am]
BILLING CODE 3510-DS-M