[Federal Register Volume 64, Number 129 (Wednesday, July 7, 1999)]
[Notices]
[Pages 36667-36671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17222]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-401-040]


Stainless Steel Plate From Sweden: Notice of Preliminary Results 
of Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to a request from the petitioners, the Department 
of Commerce (``the Department'') is conducting an administrative review 
of the antidumping finding on stainless steel plate from Sweden. The 
review covers two manufacturer/exporters of the subject merchandise to 
the United States, Avesta Sheffield AB (``Avesta'') and Uddeholm 
Tooling AB and its sales subsidiaries (collectively, ``Uddeholm''). 
Uddeholm's sales affiliate in the United States is Bohler-Uddeholm 
Corporation (``BUS'') and its sales affiliate in Canada is Uddeholm 
Limited, Canada (``BCA''). The period of review is June 1, 1997 through 
May 31, 1998. We preliminarily determine that sales have been made 
below normal value (``NV''). If these preliminary results are adopted 
in our final results of administrative review, we will instruct U.S. 
Customs to assess antidumping duties based on the difference between 
constructed export price (``CEP'') and NV.
    Interested parties are invited to comment on these preliminary 
results. Parties which submit argument in this proceeding are requested 
to submit with the argument: (1) A statement of the

[[Page 36668]]

issue, and (2) a brief summary of the argument (no longer than five 
pages, including footnotes).

EFFECTIVE DATE: July 7, 1999.

FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan or Jonathan Lyons, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, D.C. 20230; telephone (202) 482-4243 or 482-0374, 
respectively.

SUPPLEMENTARY INFORMATION:

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 (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are references to the provisions codified at 19 CFR part 
351 (1998).

Background

    The Department of the Treasury published an antidumping finding on 
stainless steel plate from Sweden on June 8, 1973 (38 FR 15079). The 
Department of Commerce published a notice of ``Opportunity To Request 
Administrative Review'' of the antidumping finding for the 1997-1998 
review period on June 10, 1998 (63 FR 31717). On June 10, 1998, the 
petitioners, Allegheny Ludlum Steel Corp., G.O. Carlson, Inc., and 
Lukens, Inc., filed a request for review of Uddeholm and Avesta. We 
initiated the review on July 28, 1998 (63 FR 40258). On October 8, 
1998, December 1, 1998, February 22, 1999, and April 12, 1999, we 
received responses from Uddeholm to the Department's original and 
supplemental questionnaires.
    The review covers the period June 1, 1997 through May 31, 1998. The 
Department is conducting this review in accordance with section 751 of 
the Act, as amended. Section 751(a)(3) provides that the Department may 
extend the deadline for issuing its preliminary results of an 
administrative review if it determines that it is not practicable to 
complete the preliminary results within the statutory time limit of 245 
days. See also 19 CFR 351.213(h)(2). On January 11, 1999, the 
Department extended the time limit for these preliminary results to 
June 30, 1999. See Stainless Steel Plate from Sweden; Extension of Time 
Limits for Antidumping Duty Administrative Review, 64 FR 3683 (January 
25, 1999).

Scope of the Review

    Imports covered by this review are shipments of stainless steel 
plate which is commonly used in scientific and industrial equipment 
because of its resistance to staining, rusting and pitting. Stainless 
steel plate is classified under Harmonized Tariff Schedule of the 
United States (HTSUS) item numbers 7219.11.00.00, 7219.12.00.05, 
1209.12.00.15, 7219.12.00.45, 7219.12.00.65, 7219.12.00.70, 
7219.12.00.80, 8219.21.00.05, 7219.21.00.50, 7219.22.00.05, 
7219.22.00.10, 7219.22.00.30, 7219.22.00.60, 7219.31.00.10, 
7219.31.00.50, 7220.11.00.00, 7222.30.00.00, and 7228.40.00.00. 
Although the subheadings are provided for convenience and customs 
purposes, the written description of the merchandise is dispositive.

Facts Available

    On September 2, 1998, Avesta informed the Department that it was 
unable to participate in the 1997-1998 administrative review. Avesta 
claimed that, because a key facility had closed and staff that had 
participated in prior reviews were no longer employed by the company, 
it would not be ``feasible, financially or practically,'' for the 
company to participate.
    Section 776(a)(2)(A) of the statute and 19 CFR 351.308 mandate use 
of facts available in several circumstances, including when a 
respondent withholds requested information. Further, section 776(b) of 
the Act authorizes the Department to use an adverse inference in 
selecting from the facts otherwise available where the respondent has 
``not acted to the best of its ability to comply with a request for 
information.''
    Because Avesta has declined to respond to the Department's 
questionnaire, we must rely on the facts otherwise available. Further, 
the Department finds that an adverse inference is warranted because 
Avesta has not acted to the best of its ability in responding to the 
Department's request for information. Avesta failed to provide any 
explanation as to why the loss of employees or the closing of a 
facility prevents its responding to the Department's questionnaire. 
Moreover, Avesta failed to identify specific problems in complying with 
our request, to seek the Department's assistance or to suggest 
alternatives that would allow the Department to collect the necessary 
information, as required by section 782(c)(1). Rather, the company 
appears to have made a business decision not to devote the necessary 
resources to provide the Department with the information needed to 
conduct the review.
    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available information derived from the petition, the 
final determination, a previous administrative review, or other 
information placed on the record. In accordance with section 776(b)(3) 
of the Act, we have selected as facts available the highest previous 
margin in this case from segments conducted by the Department, which is 
Avesta's margin from the 1995-1996 administrative review.
    Information from prior segments of the proceeding constitutes 
secondary information. Section 776(c) of the Act provides that the 
Department shall, to the extent practicable, corroborate secondary 
information from independent sources reasonably at its disposal. The 
Statement of Administrative Action (SAA) explains that ``corroborate'' 
means simply that the Department will satisfy itself that the secondary 
information to be used has probative value. (See H.R. Doc. 316, Vol. 1, 
103d Cong., 2d sess. 870 (1994).)
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. However, unlike other types of information, 
such as input costs or selling expenses, there are no independent 
sources for calculated dumping margins. The only source for margins is 
administrative determinations. Thus, in an administrative review, if 
the Department chooses as total adverse facts available a calculated 
dumping margin from a prior segment of the proceeding, it is not 
necessary to question the reliability of the margin for that time 
period. With respect to the relevance aspect of corroboration, however, 
the Department will consider information reasonably at its disposal as 
to whether there are circumstances that would render a margin not 
relevant. Where circumstances indicate that the selected margin is not 
appropriate as adverse facts available, the Department will disregard 
the margin and determine an appropriate margin (see Fresh Cut Flowers 
from Mexico; Final Results of Antidumping Duty Administrative Review, 
61 FR 6812 (February 22, 1996), where the Department disregarded the 
highest margin as adverse BIA because the margin was based on another 
company's uncharacteristic business expense resulting in an unusually 
high margin).
    The dumping margin we have selected for Avesta as facts available 
in this review is a rate calculated in a prior

[[Page 36669]]

segment of the proceeding; therefore, we deem it to be reliable. 
Moreover, because the margin selected was actually calculated for 
Avesta based on information submitted by the company in the prior 
review, we deem it to be relevant. Therefore, the requirements of 
section 776(c) of the Act have been met.
    Because we have based Avesta's dumping margin entirely on facts 
available, the analysis below addresses only sales made by Uddeholm.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Uddeholm using standard verification procedures, including 
on-site examination of relevant sales and financial records and 
selection of original documentation containing relevant information. 
Our verification results are outlined in the proprietary and public 
versions of the verification report.

Date of Sale

    For both its third-country market and U.S. sales, Uddeholm reported 
the earlier of either the date of invoice or the date of shipment as 
the date of sale. Uddeholm stated that this methodology best reflects 
the date on which the material terms of sale are established. In the 
normal course of business, invoices are issued upon shipment of 
merchandise to the customer. In rare instances, merchandise is shipped 
prior to invoicing. Invoices on these shipments are issued on the next 
business day. Due to the unique nature of the subject merchandise and 
its applications, orders for merchandise are processed and shipped 
within a week of the customer's order, and in many instances within 1-2 
business days. Orders are primarily placed via phone or fax to the 
sales departments, and usually result in Uddeholm's generating a work 
order for their merchandise processing and operations division. Most 
orders are immediately filled from inventory and sized to the 
customer's specifications. Uddeholm records the terms of sale (price 
and quantity) when the merchandise is shipped and the invoice is 
issued, which generally occurs on the same day. In addition, the 
Department verified that there are no sales contracts, long-term 
orders, or extended delivery agreements between Uddeholm and its 
customers. Therefore, we preliminarily determine that invoice date is 
the most appropriate date of sale in accordance with Sec. 351.401(i) of 
the Department's regulations.

Product Comparisons

    In accordance with section 771(16) of the Act, all products 
produced by the respondents, covered by the description in the Scope of 
Investigation section, above, and sold in Canada during the period of 
review (POR) are considered to be foreign like products for purposes of 
determining appropriate product comparisons to U.S. sales. We have 
relied on five characteristics to match U.S. sales of subject 
merchandise to comparison market sales of the foreign like product: 
specification, process, thickness, finish, and form. We used thickness 
ranges reported by the respondent, as requested by the Department. 
Where there were no sales of identical merchandise in the third-country 
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 questionnaire and reporting instructions.

Fair Value Comparisons

    To determine whether sales of stainless steel plate from Sweden to 
the United States were made at less than normal value, we compared NV 
to the CEP, as described in the ``Constructed Export Price'' and 
``Normal Value'' sections of this notice.

Constructed Export Price (CEP)

    In accordance with section 772 (b) of the Act, we treated all of 
Uddeholm's sales to the United States as CEP sales because the 
merchandise was first sold to unaffiliated U.S. purchasers, after 
importation, by an affiliated seller in the United States. There were 
no export price sales during the period of review.
    We based CEP on the packed ex-warehouse or delivered price to 
unaffiliated customers in the United States. In accordance with section 
772 (c)(2) of the Act, we made adjustments, where applicable, for 
international and ocean freight, U.S. inland freight, U.S. brokerage 
and handling expenses, U.S. customs duties, early payment discounts, 
rebates, warehousing, and marine insurance. In accordance with sections 
772(d)(1) and (2) of the Act, we made deductions for selling expenses, 
warranty expenses, credit expenses, and cutting and grinding expenses.
    To arrive at the CEP, the gross unit price was further reduced by 
an amount for profit pursuant to section 772(d)(3) of the Act. In 
accordance with section 772 (f) of the Act, we computed profit based on 
total revenues realized on sales in both the U.S. and third-country 
markets, less all expenses associated with those sales. We then 
allocated profit to the expenses deducted under sections 772(d)(1) and 
(2), based on the ratio of total U.S. expenses to total expenses for 
both the U.S. and third-country markets.

Normal Value

A. Home Market Viability

    In order to determine whether there were sufficient sales of 
stainless steel plate in the home market to serve as a viable basis for 
calculating NV, we compared the volume of home market sales of subject 
merchandise to the volume of subject merchandise sold in the United 
States, in accordance with section 773(a)(1)(C) of the Act. Since 
Uddeholm's aggregate volume of home market sales was less than five 
percent of its U.S. sales of the subject merchandise, we did not base 
NV for Uddeholm on its home market sales.

B. Comparison Market Selection

    In selecting the appropriate third-country market on which to base 
NV for Uddeholm, we analyzed sales to Uddeholm's three largest third-
country markets. In accordance with Sec. 351.404(e) of the Department's 
regulations, we chose the Canadian market as the most appropriate 
comparison market for NV. Canada constituted Uddeholm's largest third-
country market, and merchandise sold in the Canadian market was 
identical to the subject merchandise sold in the United States. For a 
more detailed discussion of third-country market selection, see 
Analysis Memorandum for 3rd Country Comparison Market, dated May 28, 
1999.
    We calculated NV based on sales to unaffiliated third-country 
market customers. We made adjustments for physical differences in the 
merchandise, where necessary, in accordance with section 
773(a)(6)(C)(ii) of the Act. In accordance with section 
773(a)(6)(B)(ii) of the Act, we made adjustments to NV for 
international freight, third-country inland freight, third-country 
inland insurance, third-country customs duties, and warehousing 
expenses. We also adjusted NV for direct selling expenses, including 
imputed credit expenses, in accordance with section 773(a)(6)(C)(iii) 
of the Act. Finally, we made an adjustment to NV for early payment 
discounts, in accordance with Sec. 351.401(c) of the Department's 
regulations.

Price-to-Price Comparisons

    We performed price-to-price comparisons where there were sales of 
comparable merchandise in the third-country market.

[[Page 36670]]

    In accordance with section 777(A) of the Act, we calculated monthly 
weighted-average prices for NV and compared these to individual U.S. 
transactions.

Level of Trade

    In accordance with section 773(a)(7) 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 sales, 
the U.S. LOT is also the level of the starting-price sale, which is 
usually from exporter to importer. For CEP sales, it is the level of 
the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different level of trade 
than EP or CEP sales, we examine the stages in the marketing process 
and selling functions along with 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 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).
    The Department requested information concerning the selling 
functions associated with each phase of marketing, or the equivalent, 
in Uddeholm's Canadian and U.S. markets. The NV level of trade is based 
on sales by Uddeholm's affiliate, BCA, to unaffiliated customers in 
Canada. The information submitted by Uddeholm indicates that BCA 
performs the same selling functions for all customers in the Canadian 
market. Therefore, we preliminarily determine that the Canadian sales 
were made at a single level of trade. The CEP level of trade is based 
on the constructed sales to Uddeholm's affiliate, BUS, i.e., after the 
deductions required under 772(d) of the Act. The information submitted 
indicates that at the CEP level of trade Uddeholm performs fewer and 
different selling functions than it does at the NV level of trade. 
Therefore, we preliminarily determine that there is a single level of 
trade in the United States--the CEP level of trade--which is different 
from the level of trade in Canada. For a more detailed discussion of 
level of trade see Analysis Memorandum to the File regarding Level of 
Trade for Uddeholm, dated June 22, 1999.
    As evidenced by the record, the U.S. and Canadian sales are at 
different levels of trade and the Canadian level of trade--sales by an 
affiliated distributor--is at a more advanced stage of distribution 
than the U.S. CEP level of trade--sales by the producer to an 
affiliated distributor. However, we do not have data available that 
would be an appropriate basis for calculation of a level of trade 
adjustment. Therefore, in accordance with section 773(a)(7)(B) of the 
Act, we have preliminarily determined to make a CEP offset.

Currency Conversion

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

Preliminary Results of Review

    We preliminarily determine that the following margins exist for the 
period June 1, 1997 through May 31, 1998:

Uddeholm--7.30 percent
Avesta--29.36 percent

    Parties to this proceeding may request disclosure within five days 
of publication of this notice and any interested party may request a 
hearing within 30 days of publication. Any hearing, if requested, will 
be held 37 days after the date of publication, or the first working day 
thereafter. Interested parties may submit case briefs and/or written 
comments no later than 30 days after the date of publication. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 35 days after the 
date of publication. The Department will publish the final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such written comments or at a hearing, 
within 120 days after the publication of this notice.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. In accordance with 
Sec. 351.212(b) of the Department's regulations, we have calculated an 
importer-specific ad valorem assessment rate for the merchandise based 
on the ratio of the total amount of antidumping duties calculated for 
the examined sales made during the POR to the total entered value of 
the sales used to calculate these duties. This rate will be assessed 
uniformly on all entries of that particular importer made during the 
POR. The Department will issue appraisement instructions directly to 
Customs. 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.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of these administrative reviews 
for all shipments of stainless steel plate from Sweden entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date of the final results of these administrative reviews, as provided 
by section 751(a)(1) of the Act: (1) The cash deposit rate for reviewed 
firms will be the rates established in the final results of 
administrative review, except if the rate is less than 0.50 percent, 
and therefore, de minimis within the meaning of 19 CFR 351.106, in 
which case the cash deposit rate will be zero; (2) for merchandise 
exported by manufacturers or exporters not covered in this review but 
covered in the original less-than-fair-value (LTFV) investigation or a 
previous review, the cash deposit will continue to be the most recent 
rate published in the final determination or final results for which 
the manufacturer or exporter received a company-specific rate; (3) if 
the exporter is not a firm covered in this review, a previous review, 
or the original investigation, but the manufacturer is, the cash 
deposit rate will be that established for the most recent period for 
the manufacturer of the merchandise; and (4) if neither the exporter 
nor the manufacturer is a firm covered in this or any previous review 
or the original fair value investigation, the cash deposit rate will be 
4.46%.
    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 these review periods. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties

[[Page 36671]]

occurred and the subsequent assessment of double antidumping duties.
    This determination is issued in accordance with sections 751(a)(1) 
and 777(i)(1) of the Act.

    Dated: June 29, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-17222 Filed 7-6-99; 8:45 am]
BILLING CODE 3510-DS-P