[Federal Register Volume 64, Number 44 (Monday, March 8, 1999)]
[Notices]
[Pages 10979-10982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5629]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-201-806]


Carbon Steel Wire Rope From Mexico: 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: The Department of Commerce (``the Department'') is conducting 
an administrative review of the antidumping duty order on carbon steel 
wire rope from Mexico in response to requests by respondent, Aceros 
Camesa S.A. de C.V. (``Camesa''), and petitioner, the Committee of 
Domestic Steel Wire Rope and Specialty Cable Manufacturers (``the 
Committee''). This review covers exports of subject merchandise to the 
United States during the period March 1, 1997 through February 28, 
1998.
    We have preliminarily determined that sales have not been made 
below normal value (``NV''). If these preliminary results are adopted 
in our final results, we will instruct the U.S. Customs Service to 
liquidate appropriate entries without regard to antidumping duties. 
Interested parties are invited to comment on these preliminary results. 
Parties who submit comments are requested to submit with each comment a 
statement of the issue and a brief summary of the comment.

EFFECTIVE DATE: March 8, 1999.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley, (202) 482-4106, Laurel 
LaCivita, (202) 482-4236, or Maureen Flannery, (202) 482-3020, AD/CVD 
Enforcement, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington DC 20230.

Applicable Statute and Regulations

    Unless otherwise stated, 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. In addition, unless otherwise stated, all 
citations to the Department's regulations are references to the 
regulations as codified at 19 CFR Part 351 (April 1998).

SUPPLEMENTARY INFORMATION:

Background

    The Department published in the Federal Register the antidumping 
duty order on steel wire rope from Mexico on March 25, 1993 (58 FR 
16173). On March 11, 1998 we published in the Federal Register (63 FR 
11868) a notice of opportunity to request an administrative review of 
the antidumping duty order on steel wire rope from Mexico covering the 
period March 1, 1997 through February 28, 1998.
    In accordance with 19 CFR 351.213(b)(2), Camesa requested that we 
conduct an administrative review of Camesa's sales. The Committee also 
requested a review of Camesa's sales, in accordance with 19 CFR 
351.213(b)(1). We published a notice of initiation of this antidumping 
duty administrative review on April 24, 1998 (63 FR 20378).
    On May 22, 1998, Camesa requested that it be allowed to limit its 
sales reporting to sales involving identical or nearly identical 
merchandise. This request was opposed by the Committee in a letter 
dated June 19, 1998, but was granted by the Department on June 24, 
1998. On June 26, 1998, the Committee submitted a letter objecting to 
the Department's decision. On September 25, 1998, the Department issued 
an amendment to its decision, expanding Camesa's reporting requirements 
while still allowing some limitation to the sales reported. For further 
information, see the ``Product Comparisons'' section below.
    On September 1, 1998, the Department, in accordance with section 
773(b)(2)(A)(ii), initiated an investigation of sales below cost. The 
Department determined to initiate this inquiry because, during the 
first administrative review of this proceeding, the Department 
disregarded some of Camesa's below-cost sales. The final results of the 
first administrative review were published on September 2, 1998 (63 FR 
46753). We received cost data from Camesa on October 21, 1998.
    During this review, the Department did not conduct a verification 
of the information provided by Camesa.

Scope of the Review

    The product covered by this review is carbon steel wire rope. Steel 
wire rope encompasses ropes, cables, and cordage of iron or carbon 
steel, other than stranded wire, not fitted with fittings or made up 
into articles, and not made up of brass plated wire. Imports of these 
products are currently classifiable under the following Harmonized 
Tariff Schedule (HTS) subheadings: 7312.10.9030, 7312.10.9060 and 
7312.10.9090.
    Excluded from this review is stainless steel wire rope, which is 
classifiable under the HTS subheading 7312.10.6000, and all forms of 
stranded wire, with the following exception.
    Based on the affirmative final determination of circumvention of 
the antidumping duty order, 60 FR 10831 (Feb. 28, 1995), the Department 
has determined that steel wire strand, when manufactured in Mexico by 
Camesa and imported into the United States for use in the production of 
steel wire rope, falls within the scope of the antidumping duty order 
on steel wire rope from Mexico. Such merchandise is currently 
classifiable under subheading 7312.10.3020 of the HTS.
    Although HTS subheadings are provided for convenience and Customs 
purposes, the written description of the scope of this order remains 
dispositive.
    This review covers one manufacturer and exporter, Camesa, and the 
period March 1, 1997 through February 28, 1998.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by Camesa covered by the description in the ``Scope 
of Review'' section, above, and sold in the home market during the 
period of review (POR) to be foreign like products for the purposes of 
determining appropriate

[[Page 10980]]

product comparisons with U.S. sales. In the Product Concordance section 
(Appendix V) of the questionnaire, we provided the following hierarchy 
of product characteristics to be used for reporting identical and most 
similar comparisons of merchandise: (1) Type of steel wire (finishing 
type); (2) diameter of wire rope; (3) type of core; (4) class of wire 
rope; (5) grade of steel; (6) number of wires per strand; (7) design of 
strands; and (8) lay of rope.
    Camesa requested that we limit its reporting of home market sales 
of steel wire rope during the POR because it made contemporaneous sales 
of models of rope in its home market that were identical to all of its 
models sold in the United States. Thus, it argued, the Department could 
conduct its analysis with these identical matches alone, and any other 
reported sales would be superfluous. We told Camesa that it could limit 
its reporting of home market sales to identical and a range of similar 
foreign like products sold during the POR, but that we might, at a 
later date, require the reporting of additional home market sales at 
short notice.\1\ Petitioners objected, both before and after our 
decision, arguing that allowing limited reporting would prevent the 
identification of all possible matches of home market sales to U.S. 
sales. We later requested that Camesa expand its home market sales and 
cost reporting to include information on all models of steel wire rope 
belonging to the classes of rope sold in the United States. See 
memorandum to the file, dated September 25, 1998.
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    \1\ Specifically, we originally asked for sales of all 
``merchandise that is: (1) identical to the U.S. product; or (2) 
that is identical except that the merchandise is in the millimeter 
size just above or just below the size of the U.S. merchandise; and/
or (3) that is identical to the U.S. product with respect to all 
product characteristics other than wire lay.'' See letter from 
Edward Yang, dated June 24, 1998.
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United States Price

    We based United States price on export price (EP), as defined in 
section 772(a) of the Act, because the merchandise was sold directly by 
the exporter to unaffiliated U.S. purchasers prior to the date of 
importation, and because constructed export price was not indicated by 
other facts of record.
    The Department calculated EP for Camesa based on packed, delivered 
prices to customers in the United States. We made deductions, where 
applicable, for domestic and foreign inland freight expenses, inland 
insurance, U.S. customs duties, and brokerage and handling in 
accordance with section 772(c)(2)(A). We added to U.S. price an amount 
for duty drawback received by Camesa.

Normal Value

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined, pursuant to section 773(a)(1)(B) of the Act, 
that the quantity of foreign like product sold in the home market was 
sufficient to permit a proper comparison with sales of the subject 
merchandise to the United States. Therefore, in accordance with section 
773(a)(1)(B)(i) of the Act, we based NV on the price (exclusive of 
value-added tax (VAT)) 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. Camesa made sales of subject 
merchandise both to unaffiliated and affiliated home market customers. 
None of the sales used for matches were sales to affiliated parties. 
Therefore, none of these sales were used in the margin calculation.
    Camesa originally submitted its home market sales database on July 
7, 1998. In response to our supplemental questionnaire, Camesa 
resubmitted the database on October 20, 1998. In our supplemental 
questionnaire we asked Camesa to revise its reporting of its database 
in two ways: (1) Expand its sales reporting as described above in the 
``Product Camparisons'' section of this Notice; and (2) revise its home 
market database to include additional details regarding the physical 
characteristics of each product. We did not ask Camesa to recalculate 
any of the figures reported in the database. The October 20, 1998 
submission, however, contained numerous discrepancies with data that 
had already been reported in the July 7th submission.
    Because sufficient sales of identical merchandise reported in the 
original, July 7th submission, were found to be above cost, we did not 
need to rely on sales of similar merchandise reported in the October 
20th submission in order to calculate a margin. Therefore, it was not 
necessary to rely on the expanded sales reporting of the October 20th 
database.
    Because we did not need the additional sales reported in the 
October 20th database and because that database contained changes not 
requested by the Department,\2\ we relied solely on the July 7th 
database for our calculations. We relied on the product characteristics 
reported in Appendix SB-4 of Camesa's October 20th submission to 
confirm that the home market products reported in the July 7th 
submission were in fact identical to those products sold to the United 
States.
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    \2\ Section 351.301(b)(2) provides that with respect to 
administrative reviews, submission of unsolicited factual 
information is due no later than 140 days after the last day of the 
anniversary month. Included within respondents submission of October 
20 was additional information not requested by the Department. 
Because this information was not requested and was untimely we 
rejected it.
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Cost of Production Analysis

    Section 773(b)(1) requires the Department to conduct a sales-below-
cost investigation if it has reasonable grounds to believe or suspect 
sales below cost in the respondent's home market. According to section 
773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or 
suspect that sales in the home market have been made at below cost if 
sales were disregarded in a previous administrative review for having 
been at prices below cost. Therefore, because some of Camesa's home 
market sales were excluded from the margin calculation in the last 
review, after having been found to be at prices below cost, Carbon 
Steel Wire Rope from Mexico, Final Results of Antidumping Duty 
Administrative Review, 63 FR 46753 (Sept. 2, 1998), the Department is 
required to conduct a sales-below-cost investigation before determining 
a margin in this review. Accordingly, we requested and obtained from 
Camesa the cost data necessary to determine whether below-cost home 
market sales occurred during the current POR. Before making any NV 
comparisons for Camesa, we conducted the cost of production (COP) 
analysis described below.
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP for each model sold in the home market based on 
the sum of Camesa's cost of materials and fabrication for the foreign 
like product (i.e., cost of manufacturing (COM)), plus amounts for home 
market general and administrative expenses (GNA), interest expenses, 
and indirect selling expenses. We relied on the COP data submitted by 
Camesa in its cost questionnaire response.
    Camesa submitted cost data for each model reported for each month 
of the review period. For each model, we calculated a single weighted-
average figure by weighting monthly COMs by the amount produced in each 
month.
    We compared the weighted-average COPs for Camesa to home market 
sales of the foreign like product, as required under section 773(b) of 
the Act, in order to determine whether these sales had been made at 
prices below cost. On a product-specific basis, we compared COPs to 
home market prices, less discounts, movement expenses, direct selling 
expenses, and packing costs.

[[Page 10981]]

    In determining whether to disregard home market sales made at 
prices below cost, we examined whether such sales were made: (1) Within 
an extended period of time in substantial quantities; and (2) at prices 
which permitted the recovery of all costs within a reasonable period of 
time in the normal course of trade, in accordance with sections 
773(b)(1)(A) and (B) of the Act. In accordance with section 
773(b)(2)(C), where 20 percent or more of home market sales during the 
POR of a particular model were made at prices below cost we disregard 
the below-cost sales for the model because the sales were made in 
substantial quantities within an extended period and at prices that 
would not permit the recovery of all costs within a reasonable period 
of time, in accordance with section 773(b)(2)(D) of the Act.
    When making price comparisons with U.S. sales, in accordance with 
section 771(16) of the Act, the Department considers all products sold 
in the home market within the ``Scope of Review'' and in the ordinary 
course of trade. If sales of identical merchandise in the home market 
are disregarded because they are sold below cost, or because they are 
otherwise not made in the ordinary course of trade, we compare U.S. 
sales to home market sales of the most similar foreign like products 
made in the ordinary course of trade. Product similarity is based on 
the characteristics listed in Sections B and C of our antidumping 
questionnaires. See also the section entitled ``Product Comparisons'' 
in this Notice.

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 U.S. transaction. The NV LOT is 
that of the starting-price sales in the comparison market or, when NV 
is based on constructed value, that of the sales from which we derive 
selling, general and administrative expenses and profit. For EP, the 
U.S. LOT is also the level of the starting-price sale, which is usually 
from exporter to importer. For CEP, it is the level of the constructed 
sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make a 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 NV and CEP levels 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, 61732 (November 19, 1997).
    Camesa did not claim a LOT adjustment; however, we requested 
information concerning Camesa's distribution system, including classes 
of customers, selling functions, and selling expenses, to determine 
whether such an adjustment was necessary. Camesa reported that all 
sales to the United States during the POR were to distributors, and 
sales in the comparison market, the home market in this case, were to 
industrial end users and distributors. After reviewing Camesa's 
response to our questions involving its sales functions in both 
channels of distribution in its home market and the United States, we 
preliminarily determine that sales in the home market and sales in the 
United States are at the same LOT, and that no adjustment is warranted. 
See Memorandum to the File (``Analysis Memo''), dated March 2, 1999.

Price-to-Price Comparisons

    Pursuant to section 777A(d)(2), we compared the EPs of individual 
transactions to the monthly weighted-average prices (NV) of sales of 
the foreign like product made in the ordinary course of business. We 
based NVs on packed, delivered prices to unaffiliated purchasers in the 
home market. We made adjustments, where applicable, in accordance with 
section 773(a)(6) of the Act. Where applicable, we made adjustments to 
home market prices for discounts and inland movement expenses. We also 
made circumstance-of-sale adjustments for differences in credit and 
warranty expenses, pursuant to section 773(a)(6)(C)(iii) of the Act, by 
adding to NVs the amounts of U.S. credit and warranty expenses for each 
U.S. sale and subtracting the home market credit and warranty expenses. 
Similarly, in order to adjust for differences in packing expenses 
between the two markets, we increased home market price by U.S. packing 
costs and reduced it by home market packing costs. Prices were reported 
net of VAT and, therefore, no deduction for VAT was necessary.

Sales of Strand to a U.S. Affiliate

    Pursuant to the affirmative final determination of circumvention of 
this antidumping duty order (see Steel Wire Rope from Mexico: 
Affirmative Final Determination Circumvention of Antidumping Duty 
Order, 60 FR 10831 (Feb. 28, 1995)), steel wire strand, when 
manufactured in Mexico by Camesa and imported into the United States 
for use in the production of steel wire rope, falls within the scope of 
the antidumping duty order on steel wire rope from Mexico.
    In its October 20, 1998 supplemental questionnaire response, Camesa 
reported that during the POR all of its exports of steel wire strand to 
the United States were made to its U.S. subsidiary, Camesa, Inc. These 
strands consisted of three product types: prestressed concrete strand, 
post-tension tendon, and oilfield strands (DYCAM and swab lines). 
Camesa reports that these strands are not used by Camesa Inc. in the 
manufacture of steel wire rope and that they fall outside the scope of 
the circumvention order; thus we have preliminarily determined that 
they do not fall within the types of steel wire rope strand covered by 
the 1995 circumvention determination.

Preliminary Results of the Review

    As a result of our comparison of EPs and NVs, we preliminarily 
determine that the following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
Aceros Camesa S.A. de C.V..................................         0.00
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within 5 business 
days of the date of publication of this notice. Any interested party 
may request a hearing within 30 days of publication. Pursuant to 19 CFR 
351.310(d), any hearing, if requested, will be held 37 days after the 
publication of this notice, or the first workday thereafter. Interested 
parties may submit case briefs within 30 days of the date of 
publication of this notice. Rebuttal briefs, which must be limited to 
issues raised in the case briefs, may be filed not later than 35 days 
after the date of publication. The Department will publish a notice of 
final results of this administrative review, which will include the 
results of its analysis of issues raised in any such comments, not 
later than 120 days after the date of publication of this notice.

[[Page 10982]]

    Upon issuance of the final results of review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. If these preliminary results are adopted in 
our final results, we will instruct the U.S. Customs Service not to 
assess antidumping duties on the merchandise subject to review. Upon 
completion of this review, the Department will issue appraisement 
instructions directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of the final results of this administrative review for all 
shipments of steel wire rope products from Mexico entered, or withdrawn 
from warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(2)(c) of the Act: (1) the cash deposit 
rate for the reviewed company will be the rate established in the final 
results of this review; (2) for merchandise exported by manufacturers 
or exporters not covered in this review but covered in the original 
investigation of sales at less than fair value (LTFV) or a previous 
review, the cash deposit 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 or a previous review, or the original LTFV 
investigation, but the manufacturer is, the cash deposit rate will be 
the rate established for the most recent period for the manufacturer of 
the merchandise; and (4) for all other producers and/or exporters of 
this merchandise, the cash deposit rate shall be 111.68 percent, the 
``all others'' rate established in the LTFV investigation (58 FR 7531, 
February 8, 1993).
    These deposit rates, 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 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 notice are issued and published in 
accordance with sections 751(a)(1) of the Act (19 U.S.C. 1675(a)) and 
19 CFR 351.213.

    Dated: February 26, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-5629 Filed 3-5-99; 8:45 am]
BILLING CODE 3510-DS-P