[Federal Register Volume 64, Number 143 (Tuesday, July 27, 1999)]
[Notices]
[Pages 40549-40553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19166]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-201-806]


Carbon Steel Wire Rope From Mexico: Final Results of Antidumping 
Duty Administrative Review

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review.

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SUMMARY: On March 8, 1999, the Department of Commerce (the Department) 
published in the Federal Register the preliminary results of its 
antidumping duty administrative review of the antidumping duty order on 
carbon steel wire rope from Mexico (64 FR 10979). This review covers 
one manufacturer/exporter of the subject merchandise to the United 
States, Aceros Camesa S.A. de C.V. (Camesa), and the period of March 1, 
1997 through February 28, 1998. We gave interested parties an 
opportunity to comment on the preliminary results of review. We 
received comments from Camesa and from the Committee of Domestic Steel 
Wire Rope and Specialty Cable

[[Page 40550]]

Manufacturers (the petitioner). We have not changed the results from 
those presented in the preliminary results of review.

EFFECTIVE DATE: July 7, 1999.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Laurel LaCivita, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington DC 20230; telephone (202) 482-0666, (202) 482-4236, 
respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

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

Background

    On March 8, 1999, the Department published in the Federal Register 
the preliminary results of the review of the antidumping duty order on 
carbon steel wire rope from Mexico (64 FR 10979). On April 7, 1999, we 
received comments from the petitioner and Camesa. The petitioner and 
Camesa submitted rebuttal comments on April 12, 1998.
    The Department has now completed this antidumping duty 
administrative review in accordance with section 751(b) of the Act.

Scope of Review

    The product covered by this review is steel wire rope. Steel wire 
rope encompasses ropes, cables, and cordage of 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 HTS subheading 7312.10.6000, and all forms of 
stranded wire, with the following exception.
    In the final affirmative determination of circumvention of 
antidumping duty order, 60 FR 10831 (February 28, 1995), the Department 
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 for 
Customs purposes, our own written description of the scope of this 
review remains dispositive.
    This review covers one manufacturer/exporter, Camesa, and the 
period March 1, 1997 through February 28, 1998.

Analysis of the Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results of review. We received case and rebuttal briefs 
from both petitioner and Camesa.

Comment 1: Whether Camesa's Sales to the United States Constitute Bona 
Fide Transactions

    The petitioner contends that the timing and nature of Camesa's 
sales to the United States during the period of review (POR) indicate 
that they were not bona fide transactions. The petitioner claims that 
the sales were contrived for the purpose of orchestrating an export 
scheme to serve as the basis for an administrative review and 
adjustment of the antidumping duty deposit requirement. Consequently, 
the petitioner contends, the Department must disregard these sales and 
determine that no proper basis existed for an administrative review of 
the March 1, 1997 through February 28, 1998 period.
    The petitioner argues that the circumstances of the sales indicate 
that they were contrived for purposes of manipulating the Department's 
antidumping analysis. In this regard, the petitioner points to the 
small number of sales and the late date of the sales, occurring at the 
end of the POR, as evidence that these sales were concocted by Camesa 
solely for purposes of justifying an administrative review and 
obtaining a zero margin.
    The petitioner also contends that Camesa's one customer during the 
POR was not sincerely interested in purchasing general purpose steel 
wire rope from Camesa. According to the petitioner, Camesa's sole U.S. 
purchaser during the POR had been, up until approximately one month 
before the date of the U.S. sales, a purchaser of fishing ropes, 
exclusively. Because these fishing ropes were entered in-bond for 
subsequent export to foreign destinations, they were not subject to 
review. The petitioner argues that the customer's sudden switch, 
shortly before the end of the review period, to the general purpose 
ropes subject to the current review is evidence that the sales were 
contrived for the purpose of manipulating Camesa's dumping margin.
    Finally, the petitioner contends that Department precedent equates 
the term bona fide with commercially reasonable, and points to U.S. 
Customs data to demonstrate that Camesa's sales were not made at 
commercially reasonable prices. These customs figures indicate that, 
for the month of Camesa's sales to the United States, the average price 
of all goods falling under the tariff schedule subheading that includes 
the products sold by Camesa during the POR is less than the prices 
charged by Camesa.
    Camesa contends that the petitioner has not provided any evidence 
beyond its own speculation that the sales in question were not bona 
fide. Camesa argues that the relatively small number and the late 
timing of the sales to the United States during the POR were the result 
of Camesa's difficulty in finding U.S. customers in the face of the 
high cash deposit rate (111.68 percent) in effect during the POR for 
imports of its steel wire rope products, not the result of an attempt 
to manipulate the dumping margin.
    Similarly, Camesa argues, there is no basis for questioning the 
genuineness of Camesa's U.S. customer's need for steel wire rope. The 
only evidence on the record regarding that customer's need for subject 
merchandise suggests a legitimate business motivation.
    Finally, Camesa has three responses to the customs figures 
submitted by the petitioner. First, Camesa contends that petitioner's 
submission was untimely, having been filed with the Department after 
the deadline stipulated in 19 CFR 351.301(b)(2). Second, Camesa claims 
that it is unreasonable to compare the prices of its products sold to 
the United States with the average price of all imported products 
falling within a tariff schedule subheading. Camesa claims that 
products within this subheading vary greatly in important 
characteristics that significantly affect price, and, as support, 
Camesa demonstrates how the catalog prices for its own products falling 
within this subheading vary greatly. Thus, argues Camesa, the average 
price of all products within this subheading imported into the United 
States will vary greatly according to the composition of the products 
imported. Third, Camesa argues that even if the Department were to 
accept the figures as timely and find them significant in judging the 
commercial reasonableness of Camesa's U.S. sales prices, the

[[Page 40551]]

petitioner has misinterpreted the law regarding the importance of a 
sale's commercial reasonableness. According to Camesa, in order to 
prove that sales are not bona fide it is not enough to show that their 
sales terms are commercially unreasonable. Camesa cites Silicon Metal 
from Brazil: Notice of Final Results of Antidumping Duty Administrative 
Review: ``[T]he Department only disregards U.S. sales in exceptional 
circumstances where the sale is commercially unreasonable and other 
facts and circumstances indicate an attempt to manipulate the dumping 
margins.'' 64 FR 6305, 6317 (Feb. 9, 1999) (Silicon Metal from Brazil).
    DOC Position: We agree with Camesa. While the Department's 
authority to disregard U.S. sales in administrative reviews as non-bona 
fide transactions has been recognized by the Court of International 
Trade (CIT), see, e.g., PQ Corp. v. United States, 652 F. Supp. 724, 
729 (CIT 1987), there is no express statutory or regulatory provision 
that addresses or guides the exclusion of U.S. sales. Nevertheless, the 
Department has the ``authority to prevent fraud upon its proceedings.'' 
Chang Tieh Indust. Co., Ltd. v. United States, 840 F.Supp. 141, 146 
(CIT 1993). Thus, the Department has the discretion to exclude certain 
U.S. sales where those sales are clearly ``distorting or 
unrepresentative.'' American Permac, Inc. v. United States, Slip Op. 
92-8 (Feb. 4, 1992).
    In order to determine whether sales should be excluded as non-bona 
fide transactions, the Department in the past has looked at a variety 
of factors indicating ``whether the transaction has been so 
artificially structured as to be commercially unreasonable.'' Certain 
Cut-to-Length Carbon Steel Plate from Romania: Notice of Rescission of 
Antidumping Duty Administrative Review, 63 FR 47232 (Sep. 4, 1998) 
(Steel Plate from Romania); see also Silicon Metal from Brazil, 64 FR 
at 6317 (noting that the Department will exclude U.S. sales where 
exceptional circumstances demonstrate commercially unreasonable sales 
terms and an attempt to manipulate the margin calculations).
    However, a sale will not be excluded simply because it was made for 
the purpose of obtaining a smaller margin, ``as long as the sale itself 
is at least arguably commercially reasonable.'' Steel Plate from 
Romania, 63 FR at 47234; see also P.Q. Corp., 652 F. Supp. at 729 
(explaining that an overpriced transaction created solely for the 
purpose of lowering the margin may be acceptable if the transaction was 
in fact sold at arm's length). Rather, the Department looks at the 
totality of the circumstances to determine whether the transactions in 
question are artificial, and thus, would not provide an appropriate 
basis for determining the respondent's U.S. pricing behavior. See 
Manganese Metal from the PRC, 60 FR 56,045 (Nov. 6, 1995) (``Based on 
the totality of the circumstances, . . . the Department determines, . . 
. that these were not bona fide sales for commercial purposes and, 
therefore, would not provide an appropriate basis for determining 
[respondent's] pricing behavior for sales to the United States. 
Therefore, these sales have been disregarded.''); see also Steel Plate 
from Romania (``Based on the cumulative weight of these factors, we 
determine that this sale was not bona fide because it was not a 
commercially reasonable transaction and involved selling procedures 
atypical of (the exporter's and importer's) normal business 
practices.'')
    We agree that the facts cited by the petitioner to prove that the 
sale was artificially structured, namely the small number of sales, the 
single customer, and the late sale date, could be, as Camesa argues, 
simply the result of the high cash deposit rate on steel wire rope from 
Mexico in effect during the POR. Additionally, while the number of 
sales made by Camesa during the POR was small, the quantity of goods 
sold was substantial. Finally, nothing in the record suggests that the 
documentation for the transactions was fabricated, see Sulfanic Acid 
from Hungary, 58 FR 8256, 8257 (Feb. 12, 1993) (the Department applied 
BIA where documents discovered at verification indicated that 
information might have been fabricated for the purpose of the 
investigation); compare Salmon from Norway, 62 FR 1430 (Jan. 10, 1997) 
(sales were included where there was no evidence of fabricated 
documents or other suspicious activity), or that the sales were not 
made at arm's length. Although Customs data generally provides a good 
basis for determining whether sales have been made at commercially 
reasonable prices we agree with Camesa in this instance that the price 
figure provided by the petitioner covers a range of products so broad 
that it cannot be meaningfully compared with Camesa's sales prices 
during the POR.
    The petitioner's questioning of Camesa's customer's genuine 
interest in purchasing steel wire rope is not supported by the record. 
The only evidence on the record indicating the customer's motive for 
its purchase, while not elaborate, nevertheless indicates a genuine 
desire to become a customer of Camesa's and a purchaser of steel wire 
rope within the scope of the order. Please see Camesa's June 5, 1998 
response, appendix A-6-B, document 1 for another explanation of the 
customer's motive, due to the proprietary nature of the explanation.
    Because the petitioner has not provided sufficient evidence to 
demonstrate that the sales involved were fabricated or otherwise 
commercially unreasonable, and we have found no other evidence 
demonstrating that the sales were not bona fide transactions, we have 
continued to include these sales in our margin calculation in these 
final results of review.

Comment 2: Whether the Department Should Reject Camesa's Home Market 
Sales Data as Inaccurate and Inherently Unreliable and Instead Use 
Adverse Facts Available

    In the Department's preliminary results of review, we rejected 
Camesa's second home market sales database, submitted on October 20, 
1998, noting that it contained discrepancies with the original 
database, submitted on July 7, 1998. We concluded that these 
discrepancies constituted new information not requested by the 
Department. \1\ Because this new information was not requested and was 
not submitted within the time period stipulated by 19 CFR 
351.301(b)(2), we rejected the second database as untimely.
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    \1\ On October 20, 1998, Camesa submitted its second home market 
sales database in response to our supplemental questionnaire, which 
requested that Camesa submit information on product characteristics 
and additional sales. In doing so, however, it did not simply submit 
an addendum to the first database, but instead, resubmitted the 
entire home market sales database; i.e., all data regarding home 
market sales were resubmitted. Some of the fields in this second 
database contained information conflicting with the first database, 
even though we had not requested Camesa to revise any of the 
previously submitted fields. We had only requested the inclusion of 
additional fields; i.e., product characteristics, and the inclusion 
of additional sales observations.
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    The petitioner argues that these discrepancies, which the 
Department described as ``significant and unexplained,'' see Memorandum 
to the File from Case Analyst (March 2, 1999) at 2, raise serious 
questions about the accuracy of all home market data submitted by 
Camesa during the POR. The petitioner further argues that, by 
submitting new information in its second database, Camesa was admitting 
that its first submission was inaccurate. According to the petitioner, 
``submission of such significant adjustments in its supplemental filing 
is an overt and explicit admission that its

[[Page 40552]]

initial database was inaccurate.'' The petitioner notes that the 
discrepancies affected the reporting of all sales that were contained 
in both databases and affected numerous fields reported for these 
sales, including gross unit price and several adjustments used by the 
Department in calculating normal value. The petitioner concludes that 
the Department should reject Camesa's home market data in favor of 
facts otherwise available.
    Camesa argues that the discrepancies between its first and second 
databases do not constitute an admission that Camesa's first submission 
is inaccurate, but merely were the result of mistakes made under the 
pressure of meeting the Department's filing deadline. Camesa argues 
that these discrepancies are a result of mistakes made in compiling the 
second database, not a result of an attempt by Camesa to revise the 
data it reported in its first submission. These discrepancies, Camesa 
claims, do not call into question the accuracy of the underlying data.
    Moreover, Camesa points to several expenses for which, in its July 
7, 1998 response to the Department's first questionnaire, Camesa 
provided worksheets and other documents to explain and support the data 
reported in the July 7, 1998 database. Camesa attempts to explain some 
of the discrepancies found in three of the fields reported in its home 
market database. It argues that it could not resolve all of the 
discrepancies without placing new information on the record, which had 
been closed per Sec. 351.301(b)(2). \2\ The petitioner contends that 
Camesa's attempts at resolving the discrepancies are inadequate.
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    \2\ The petitioner did not argue that Camesa submitted untimely 
information in the attempts, in its April 8, 1999 case brief, it 
made to resolve the discrepancies.
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    Finally, Camesa contends that, even if it had conceded there were 
errors in its initial sales listing, that fact alone would not justify 
the resort to an adverse inference, as Camesa has cooperated fully in 
this review.
    DOC Position: We agree with Camesa. The record does not indicate 
that the original database is inaccurate or unreliable, and we do not 
find that Camesa failed to act to the best of its ability.
    Under section 776(a) of the Act and 19 CFR 351.308, the Department 
will only rely on facts otherwise available when: (1) Necessary 
information is not on the record; or (2) the respondent has withheld 
information, fails to provide requested information, significantly 
impedes a proceeding, or provides information that cannot be verified. 
Furthermore, in accordance with section 776(b) of the Act, the 
Department will rely on adverse inferences only where the respondent 
has failed to cooperate by not acting to the best of its ability to 
comply with the Department's requests for information.
    Although the Department did not conduct a verification of Camesa 
during the POR, we did, per Department policy, issue an extensive 
questionnaire to Camesa requesting support for all sales data provided 
to us. We found some deficiencies in Camesa's response to this initial 
questionnaire and thus issued a supplemental questionnaire. Camesa's 
responses to both questionnaires, in combination, provided the 
Department with sufficient explanations of how Camesa calculated the 
data it reported, along with support for the raw numbers underlying its 
response. Thus, the respondent did not withhold information or fail to 
provide requested information. As such, Camesa's responses were 
complete and provided all of the information necessary for margin 
calculations. We note that the petitioner did not comment on Camesa's 
response to either of our questionnaires or otherwise indicate that it 
was concerned with the quality of Camesa's reported data, until we had 
issued our preliminary results of review.
    Moreover, it is important to note that we did not request the 
second database as the result of having found errors in the 
calculations or data used by Camesa in compiling the first database. We 
requested the second database because we had determined that Camesa 
needed to report a larger number of sales of similar merchandise, and 
to report physical characteristics for all sales. \3\ Thus, our 
rejection of the second database did not leave unanswered concerns 
about the quality of Camesa's previously submitted data or 
calculations.
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    \3\ The Department was able to reach its preliminary conclusions 
without the use of this expanded sales information. The initial, 
more limited sales information provided by Camesa included above-
cost sales of identical products that were contemporaneous with all 
sales in the United States. We therefore did not need to examine 
sales of similar merchandise, and the necessary physical 
characteristics were taken from an appendix attached to the written, 
narrative portion of Camesa's October 20, 1998 submission. Thus, the 
second sales database was not ultimately necessary for our 
calculations.
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    Finally, after having rejected Camesa's second database in our 
preliminary results of review, and thus having removed it from 
consideration, we cannot now use it for purposes of impugning the first 
database. Even if, however, the second database were available for our 
current analysis, we could not conclude that because the first database 
contained some inaccuracies, all of Camesa's submitted home market data 
must also be inaccurate. As explained above, the submissions on the 
record were timely filed and are complete and supported by 
documentation in the record. Therefore, we did not reject Camesa's home 
market sales data. As such, it is not necessary to rely on adverse 
facts available.

Comment 3: Whether The Department Must Affirm Its Preliminary 
Determination That Camesa Sold Products in the Home Market at Below 
Cost of Production

    The petitioner argues that the Department correctly applied the 
sales-below-cost test to all products ``under the consideration for the 
determination of normal value.'' The petitioner also argues that sales 
``under consideration for the determination of normal value'' should 
include all home market sales reported.
    Respondents did not comment on this issue.
    DOC Position:  We agree with the petitioner that a sales-below-cost 
test must be conducted on all home market sales reported, and affirm 
our preliminary finding that Camesa made sales below cost in its home 
market during the POR.

Comment 4: Whether the Department Should Summarily Reject All of the 
Petitioner's Contentions

    In its rebuttal brief, Camesa argues that the petitioner did not 
raise its objections in a timely manner. Camesa notes that the 
petitioner did not submit comments on any of Camesa's questionnaire 
responses, and did not, until after publication of our preliminary 
results of review, indicate it had concerns with the bona fide nature 
of Camesa's sales to the United States or with the suitability of 
Camesa's home market data for review.
    DOC Position: The Department disagrees with Camesa. Section 
351.309(b) of the Department's regulations states that the Department 
will consider case and rebuttal briefs filed within stated time limits. 
An interested party is under no burden to provide another party with 
advance warning of the issues it plans to raise in its case brief. In 
fact, an interested party might very well have no idea what arguments 
it will need to make until the Department has issued its preliminary 
results of review. In this case, for example, the petitioner had no 
advance

[[Page 40553]]

warning that the Department would reject Camesa's second submission of 
home market sales data (see the above discussion of Comment 2) until 
our preliminary results were issued.
    Interested parties were given five days after the filing of case 
briefs in which to respond to the arguments of other parties, in 
accordance with Sec. 351.309(d) of the Department's regulations.
    Finally, the petitioner's comments did not raise unusually complex 
issues. Camesa did not indicate to the Department, prior to its April 
13th submission, that it was having difficulty responding to the 
petitioner's arguments within the allotted time period, nor has it 
explained how in particular it was overburdened or denied a reasonable 
opportunity for responding.
    We determine that the following dumping margins exist:

------------------------------------------------------------------------
                                                                 Margin
           Manufacturer/exporter                  Period       (percent)
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Aceros Camesa, S.A. de C.V................     3/1/97-2/28/98       0.00
------------------------------------------------------------------------

    The Department shall determine, and the customs service shall 
assess, antidumping duties on all appropriate entries. We will instruct 
customs to liquidate the entries made during the POR without regard to 
antidumping duties since no margins were determined to exist in this 
review. The Department will issue appraisement instructions directly to 
the U.S. Customs Service.
    Furthermore, the following deposit requirements will be effective, 
upon publication of this notice of final results of review, for all 
shipments of steel wire rope from Mexico entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) The cash deposit rate 
for Camesa will be the rate stated above; (2) for previously 
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, or 
the original 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) the cash deposit rate for all 
other manufacturers or exporters will continue to be 111.68 percent, 
the all others rate established in the less-than-fair-value (LTFV) 
investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a final 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 notice also serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with Sec. 351.306 of the Department's regulations. 
Timely notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)), section 771(i) of 
the Act (19 U.S.C. 1677f(i)), and 19 CFR 351.213.

    Dated: July 6, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-19166 Filed 7-26-99; 8:45 am]
BILLING CODE 3510-DS-P