[Federal Register Volume 64, Number 152 (Monday, August 9, 1999)]
[Notices]
[Pages 43146-43149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20449]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-428-811]
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From
Germany: Final Results of Antidumping 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 April 6, 1999, the Department of Commerce published the
preliminary results of the administrative review of the antidumping
duty order on certain lead and bismuth carbon steel products from
Germany (64 FR 16703). This review covers Saarstahl AG, a manufacturer/
exporter of the subject merchandise to the United States, and the
period March 1, 1997, through February 28, 1998. We conducted a
verification of Saarstahl's antidumping duty questionnaire responses
and gave interested parties an opportunity to comment on the
preliminary results. Based on our analysis of the comments received and
the correction of certain data, we have revised our margin calculation;
however, the final results do not differ from the preliminary results.
The final results are listed below in the ``Final Results of Review''
section of this notice.
EFFECTIVE DATE: August 9, 1999.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Rebecca
Trainor, Office 2, AD/CVD Enforcement Group I, Import Administration,
Room B099, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington DC
20230; telephone (202) 482-4136, or 482-4007, respectively.
SUPPLEMENTARY INFORMATION:
Background
On April 6, 1999, the Department of Commerce (the Department)
published in the Federal Register the preliminary results of the 1997-
1998 administrative review of the antidumping duty order on certain
lead and bismuth carbon steel products from Germany (64 FR 16703)
(Preliminary Results). We conducted verification of Saarstahl AG's
(Saarstahl) antidumping duty questionnaire responses from April 27
through May 7, 1999, and issued our report on June 1, 1999 (see
Memorandum to the File: Sales and Cost of Production Verification)
(Verification Report). On June 17, 1999, and June 23, 1999, Ispat
Inland Inc. and USS/KOBE Steel Co. (the petitioners), and Saarstahl
submitted case and rebuttal briefs, respectively. Following the return
to the petitioners of their June 10, 1999, submission, which contained
untimely submitted factual information, on June 29, 1999, the
petitioners resubmitted their June 17, 1999, brief with references to
the June 10 submission redacted, in accordance with the Department's
instructions. Both parties withdrew their respective requests for a
hearing.
The Department has now completed its administrative review in
accordance with section 751 of the Tariff Act of 1930, as amended (the
Act).
Applicable Statute and Regulations
Unless otherwise indicated, all citations to 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 to the regulations at 19 CFR part 351
(1998).
Scope of the Review
The products covered by this review are hot-rolled bars and rods of
nonalloy or other alloy steel, whether or not descaled, containing by
weight 0.03 percent or more of lead or 0.05 percent or more of bismuth,
in coils or cut lengths, and in numerous shapes and sizes. Excluded
from the scope of this review are other alloy steels (as defined by the
Harmonized Tariff Schedule of the United States (HTSUS) Chapter 72,
note 1(f)), except steels classified as other alloy steels by reason of
containing by weight 0.4 percent or more of lead, or 0.1 percent or
more of bismuth, tellurium, or selenium. Also excluded are semi-
finished steels and flat-rolled products. Most of the products covered
in this review are provided for under subheadings 7213.20.00.00 and
7214.30.00.00 of the HTSUS. Small quantities of these products may also
enter the United States under the following HTSUS subheadings:
7213.31.30.00; 7213.31.60.00; 7213.39.00.30; 7213.39.00.60;
7213.39.00.90; 7213.91.30.00; 7213.91.45.00; 7213.91.60.00; 7213.99.00;
7214.40.00.10, 7214.40.00.30, 7214.40.00.50; 7214.50.00.10;
7214.50.00.30, 7214.50.00.50; 7214.60.00.10; 7214.60.00.30;
7214.60.00.50; 7214.91.00; 7214.99.00; 7228.30.80.00; and
7228.30.80.50. HTSUS subheadings are provided for convenience and
Customs purposes. The written description of the scope of this
proceeding is dispositive.
Duty Absorption
On April 28, 1998, the petitioners requested that the Department
determine whether antidumping duties had been absorbed during the
period of review (POR). Section 751(a)(4) of the Act provides for the
Department, if requested, to determine during an administrative review
initiated two or four years after the publication of the order, whether
antidumping duties have been absorbed by a foreign producer or
exporter, if the subject merchandise is sold in the United States
through an affiliated importer. In this case, Saarstahl sold to the
United States through an importer that is affiliated within the meaning
of section 751(a)(4) of the Act.
Section 351.213(j)(2) of the Department's regulations provides that
for transition orders (i.e., orders in effect on January 1, 1995), the
Department will conduct duty absorption reviews, if requested, for
administrative reviews initiated in 1996 or 1998. Because the order
underlying this review was issued prior to January 1, 1995, and this
review was initiated in 1998, a duty absorption determination in this
segment of the proceeding is necessary. As we have found that there is
no dumping margin for Saarstahl with respect to its U.S. sales, we have
also found that there is no duty absorption.
Changes Since the Preliminary Results
We have made the following changes from the preliminary results:
1. We included payment dates for certain home market sales that
were not included in the preliminary results, according to Saarstahl's
April 28, 1999, submission and the verification results. Accordingly,
we revised the imputed credit expenses for those sales.
2. We reallocated the materials, labor, and overhead costs reported
by Saarstahl, in accordance with our verification findings (see
Verification Report at pages 5-6). The reallocation did not change the
total cost of manufacturing reported. We used the computer programming
language
[[Page 43147]]
supplied by Saarstahl in its case brief to accomplish the reallocation.
3. We revised the reported depreciation, general and administrative
(G&A), and financial expense ratios to reflect corporate-wide costs,
rather than rolled products division expenses, based on our
verification findings.
4. We corrected the reported billing adjustments for two home
market sales, based on verification findings.
5. We added an early payment discount for one home market sale,
based on verification findings.
6. We revised the payment dates for certain home market and U.S.
sales to reflect the actual date Saarstahl received payment, based on
verification findings. Accordingly, we revised the imputed credit
expenses for those sales. (A separate issue concerning payment dates is
discussed below at Comment 5.)
7. We revised the reported home market and U.S. indirect selling
expenses to exclude bank fees reported separately.
8. We revised the arm's length test to affiliated customers to
account for level of trade in making affiliated to unaffiliated price
comparisons, in accordance with the Department's practice (see, e.g.,
Final Results and Partial Rescission of Antidumping Duty Administrative
Review: Certain Pasta From Turkey, 63 FR 68429, 68432, December 11,
1998). We also corrected an error in the programming language which
prevented the program from performing a complete comparison of
affiliated to unaffiliated customer prices. We did not make the
programming change suggested in Saarstahl's case brief at page 6, as we
determined that Saarstahl's proposal did not correct the error.
9. We revised the reported production quantity for one product,
based on our verification findings, for purposes of weight-averaging
the costs of production. See Comment 4 below for further discussion.
Interested Party Comments
Comment 1: Casting Type as a Product Matching Criterion
The petitioners contend that casting type--i.e., whether a product
is produced from bloom-cast billets or continuous cast billets--should
be included in the Department's model matching hierarchy as the second
most important criterion. The petitioners argue that the type of
casting has a much greater impact on cost and commercial value than any
of the remaining product characteristics, as indicated, according to
the petitioners, by Saarstahl's own cost information.
Saarstahl responds that the petitioners failed to introduce any
timely information concerning quantifiable physical differences between
bloom-cast and billet-cast products. Therefore, Saarstahl states that
the Department must maintain the determination made in the preliminary
results and decline to add casting type as a product matching
characteristic.
DOC Position: We disagree with the petitioners and we continue to
make product comparisons based on chemical composition, shape, cut
(i.e., coil or cut-to-length), size, and grade, as in our preliminary
results and in the underlying less-than-fair value (LTFV)
investigation.
As discussed in the preliminary results Model Match Methodology
Memorandum from the Team to Irene Darzenta Tzafolias, dated March 22,
1999 (Model Match Methodology Memorandum), for purposes of selecting
model match criteria, the Department normally relies on physical
characteristics of the merchandise that are identifiable and/or
quantifable (see, e.g., Notice of Preliminary Determination of Sales at
Less Than Fair Value and Postponement of Final Determination: Melamine
Institutional Dinnerware Products From Indonesia, 61 FR 43333, 43334,
August 22, 1996, and Notice of Preliminary Results of Antidumping Duty
Administrative Review: Porcelain-on-Steel Cookware From Mexico, 63 FR
1430, 1431, January 9, 1998). Casting type is a production method, not
a physical characteristic of the merchandise. As such, it is not an
appropriate criterion for inclusion in our model match methodology.
Throughout this segment of the proceeding, the petitioners have
argued that bloom casting makes the finished merchandise ``better.''
The physical characteristic that makes the product better, say
petitioners in their July 2, 1998, and August 6, 1998, letters, is the
more uniform distribution of lead and bismuth within the steel, and
enhanced manganese sulfide formation. In effect, the petitioners
contend that these factors, as apparently determined by the casting
method, are so important that they outweigh the shape, cut form, size,
and grade of the merchandise in determining the most similar match. We
find no basis on the record to support this contention.
No party has provided any information, nor did we find any evidence
at verification, to indicate that customers order products specifying,
among other things, lead and bismuth distribution and manganese sulfide
formation. No party has provided any timely information, nor did we
find any evidence at verification, that lead and bismuth distribution
and manganese sulfide formation are measured, quantified, and tracked
through the production process. Instead, the evidence on the record, as
we verified, shows that customers order the subject merchandise by
chemical composition (including grade), shape, cut form, and size. We
found no evidence that either casting type, lead and bismuth
distribution, or sulfide qualities were specified as part of a customer
order. The only link between a customer order specification and the
production process that we observed at verification was that, where
ultrasound testing of the billet was requested, Saarstahl had to
utilize a bloom cast billet (see Verification Report at pages 9-10).
There is no information on the record of this proceeding, however, that
a customer specification for ultrasound testing is equivalent to a
specification for bloom casting.
We recognize that bloom casting results in a higher cost for
producing the subject merchandise. However, a cost difference alone is
not a sufficient basis to establish a model matching characteristic. As
we noted in the last segment of the administrative review of the
companion antidumping duty order on the subject merchandise from the
United Kingdom, ``the creation of a product concordance inherently
relies upon the matching of significant physical characteristics, not
on cost groupings in a company's cost accounting system.'' (See, Notice
of Final Results of Antidumping Duty Administrative Review: Certain
Hot-Rolled Lead and Bismuth Carbon Steel Products from the United
Kingdom, 63 FR 18879, 18881, April 16, 1998.) Consistent with our usual
practice to compute weighted-average costs for identical (in terms of
the Department's matching characteristics) merchandise produced at
multiple production lines or facilities with different costs (see,
e.g., the Department's standard antidumping duty administrative review
questionnaire at page D-2), we have followed our preliminary results
methodology and calculated a weighted-average cost of bloom-cast and
billet-cast models with the same physical characteristics.
Comment 2: Casting Type of Saarstahl's U.S. Sales
The petitioners contend that Department practice considers the data
on mill test certificates to be definitive evidence of the physical
characteristics of the merchandise sold. Therefore, based on the
statement in the mill certificate that Saarstahl's U.S. sales
[[Page 43148]]
were produced from billets made from continuous cast blooms, the
petitioners argue that, in fact, the U.S. sales were produced from
continuous cast blooms. As such, the petitioners assert that the
Department should apply facts available in calculating the margins for
these sales due to the misreporting of the product and its attendant
costs. In the alternative, should the Department conclude that the
sales in question were actually produced from continuous cast billets,
rather than blooms, the petitioners contend that the Department should
disregard the U.S. sales in this review. According to the petitioners,
because the mill certificates indicate that the merchandise was made
from blooms, Saarstahl misled its customer as to the production of the
merchandise and provided it with an inferior product than that
indicated on each mill certificate. Thus, the petitioners continue, the
U.S. sales cannot form an appropriate basis for the calculation of a
dumping margin.
Saarstahl notes that its submissions in the course of this
proceeding and the Department's examination of this issue at
verification, including examination of production certificates, casting
records and production instructions, all conclusively confirm that
Saarstahl's U.S. sales were produced from continuous cast billets and
not bloom-cast billets. Saarstahl adds that the petitioners fail to
mention that directly below the statement in question on the mill test
certificates is a reduction ratio that shows that the merchandise could
not possibly have been made from blooms. Saarstahl continues that there
is no basis on the record to support the petitioners' bald assertion
that Saarstahl misled its customers about the nature of the
merchandise. Saarstahl states that it produced the merchandise using
its normal production process for leaded steels (i.e., billet-casting),
and that there is no evidence that Saarstahl's production from
continuous cast billets is in any way deficient or inferior.
DOC Position: We agree with Saarstahl. As Saarstahl notes, the
Department thoroughly examined this issue at verification. While the
mill certificates for the sales in question contain language that
suggests the sales were produced from blooms, as cited by the
petitioners, the same mill certificates also include the reduction
ratio, which, as Saarstahl states, provides a quantifiable measure of
the rolling process. As Saarstahl claimed and we verified, the
reduction ratio on the mill certificate indicates a billet-cast
product. All of the other evidence examined at verification, including
customer purchase orders, invoices, heat certificates, heat production
logs, and production ``recipes,'' showed that the sales were produced
from continuous cast billets (see Verification Report at pages 9-11).
In light of the substantial evidence in support of Saarstahl's
characterization of the U.S. sales as produced from continuous cast
billets, as opposed to the petitioners' reliance on a single line in
the mill certificate referencing continuous cast blooms, we conclude
that the U.S. sales were produced from continuous cast billets. Thus,
application of facts available in lieu of the use of the reported and
verified data, as urged by the petitioners, is not warranted in this
case.
We also find no factual basis on the record for the petitioner's
contention that, if the sales were not produced from blooms, Saarstahl
misled its customer. The customer's purchase order did not specify
production method. Further, none of the sales documentation reported
and reviewed at verification misrepresented the production of
Saarstahl's sales to its customer. As discussed previously, the bloom-
cast notation on the mill certificate is followed by the reduction
ratio, which shows that cast billets were used in the production
process. Thus, it appears that the customer received sufficient
information to determine if its specifications were met. We also found
no indication that Saarstahl's customer rejected the merchandise or
otherwise complained about the product for alleged misrepresentation.
In sum, there is no basis on the record to reject Saarstahl's reported
POR sales.
Comment 3: Adjusting Saarstahl's Costs for Over-reporting
Saarstahl states that, at verification, it demonstrated that it
over-reported certain costs of production because it reported costs
based on exchange rate loss estimates and imputed personnel expenses
for fringe benefits, as recorded in its cost accounting system.
According to Saarstahl, its actual expenses for these items were lower
than reported, as it experienced an exchange rate gain during the POR,
and its actual personnel expenses were lower than the imputed amount.
Therefore, Saarstahl contends that the Department should adjust its
costs downward to reflect these actual costs.
The petitioners respond that these adjustments should not be made
because they represent new information provided by Saarstahl for the
first time at verification. The petitioners state that these
adjustments are inconsistent with Saarstahl's own cost accounting
system and should be rejected.
DOC Position: We agree with the petitioners that the information is
untimely. While we successfully verified Saarstahl's costs, as reported
to the Department in a timely manner, the claimed adjustments between
the cost and financial accounting systems were never reported to the
Department prior to verification. Thus, these adjustments were not part
of the cost of production questionnaire response that was the subject
of verification.
Comment 4: Correction of Production Quantities for Weight-Averaging of
Costs
The petitioners state that, if the Department declines to include
casting method as a product characteristic, as discussed above, then it
should correct the reported production quantities used for the weight-
averaging of costs. The petitioners refer to the Department's finding
at verification that Saarstahl did not subtract the production
quantities of bloom-cast and secondary merchandise from the billet-cast
total, resulting in the double-counting of some products and the
understatement of costs in the weighted-average total. Accordingly, the
petitioners contend that the Department should adjust the production
quantities in calculating the weighted-average costs.
Saarstahl states that it properly reported its cost of production
based upon the explicit directions given by the Department. Saarstahl
claims that the Department's observation that, for sales sampled at
verification, Saarstahl over-reported the production quantity for
billet-cast products is not universally true for all of Saarstahl's
reported products. Should the Department combine and weight-average its
reported costs, as it did for the preliminary results, Saarstahl
contends that the Department should do so in a way that does not
negatively impact Saarstahl.
DOC Position: Although we stated in the Verification Report at
pages 18-19 that the double-counting of production quantities for a
billet-cast product observed at verification appeared to apply to all
of Saarstahl's billet-cast products, further analysis of the cost of
production data indicates that this situation is not necessarily the
case. For example, the cost of production data base includes products
where the reported production quantity for a bloom-cast product is
greater than the production quantity reported for a billet-cast product
with identical physical characteristics. Therefore, we have revised the
reported production quantity only for the product identified in the
Verification Report for which we
[[Page 43149]]
verified that the production quantity was double counted.
Comment 5: Bill of Exchange Payment Date
Saarstahl asserts that it properly reported the date it received a
bill of exchange from a home market customer as the payment date for
purposes of calculating imputed credit. Saarstahl states that a bill of
exchange is a negotiable monetary instrument that has a cash value on
the date of its receipt, thus Saarstahl's reporting of the bill receipt
in the same manner as a cash payment was proper.
DOC Position: We have made no changes to Saarstahl's reporting of
sales paid by a bill of exchange. Even if a bill of exchange receipt
were considered to be equivalent to a cash payment, in these particular
circumstances, there is no significant difference in calculating
imputed credit between Saarstahl's reporting method, which includes an
extra fee charged to the customer to account for either the extra
payment period or discounting of the bill at a bank (see Verification
Report at pages 23-24), and a methodology based on the actual date cash
was received. Therefore, for purposes of this review, we have made no
adjustment.
Final Results of the Review
As a result of this review, we have determined that the following
margins exist for the period March 1, 1997 through February 28, 1998:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period (percent)
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Saarstahl AG (Saarstahl)................... 3/1/97-2/28/98 0.00
------------------------------------------------------------------------
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. We have
calculated an importer-specific assessment rate based on the ratio of
the total amount of antidumping duties calculated for the examined
sales to the total entered value of those same sales. This rate will be
assessed uniformly on all entries of that particular importer made
during the POR. The Department will issue appropriate appraisement
instructions directly to the Customs Service. In accordance with 19 CFR
351.106(c)(2), we will instruct the Customs Service to liquidate
without regard to antidumping duties all entries of the subject
merchandise during the POR for which the importer-specific assessment
rate is zero or de minimis (i.e., less than 0.50 percent).
Further, the following deposit requirements shall be effective for
all shipments of the subject merchandise from Germany that are entered,
or withdrawn from warehouse, for consumption on or after the
publication date of the final results of this administrative review, as
provided for by section 751(a)(1) of the Act: (1) The cash deposit rate
for Saarstahl will be the rate established above in the ``Final Results
of Review'' section; (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 of this merchandise will continue to be 85.05 percent, the
all others rate established in the final determination of the LTFV
investigation (58 FR 6205, January 27, 1993).
The 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 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 19 CFR 353.34(d). Timely written notification of
return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulation and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.
Dated: July 30, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-20449 Filed 8-6-99; 8:45 am]
BILLING CODE 3510-DS-P