[Federal Register Volume 74, Number 44 (Monday, March 9, 2009)]
[Notices]
[Pages 10022-10025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-4907]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-351-825


Stainless Steel Bar From Brazil: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain 
stainless steel bar from Brazil. This review covers one producer/
exporter of the subject merchandise, Villares Metals S.A. (VMSA). The 
period of review (POR) is February 1, 2007, through January 31, 2008.
    The Department has preliminarily determined that VMSA made U.S. 
sales at prices less than normal value. If these preliminary results 
are adopted in our final results of administrative review, we will 
instruct U.S. Customs and Border Protection (CBP) to assess antidumping 
duties on all appropriate entries. Interested parties are invited to 
comment on these preliminary results of review. We intend to issue the 
final results of review no later than 120 days from the publication 
date of this notice.

EFFECTIVE DATE: March 9, 2009.

FOR FURTHER INFORMATION CONTACT: Catherine Cartsos or Minoo Hatten, AD/
CVD Operations, Office 5, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230, telephone: (202) 482-
5287 or (202) 482-1690, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 21, 1995, the Department published in the Federal 
Register an antidumping duty order on certain stainless steel bar from 
Brazil. See Antidumping Duty Orders: Stainless Steel Bar from Brazil, 
India and Japan, 60 FR 9661 (February 21, 1995). On February 4, 2008, 
the Department published in the Federal Register a notice of 
``Opportunity to Request Administrative Review'' of the order. See 
Antidumping or Countervailing

[[Page 10023]]

Duty Order, Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 73 FR 6477 (February 4, 2008).
    In accordance with 19 CFR 351.213(b)(2), on February 29, 2008, VMSA 
requested that the Department conduct an administrative review of its 
sales and entries of subject merchandise into the United States during 
the POR; the Department initiated a review on March 31, 2008. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, Request for Revocation in Part, and Deferral of Administrative 
Review, 73 FR 16837 (March 31, 2008). On October 27, 2008, we extended 
the time period for issuing the preliminary results of the review by 90 
days until January 29, 2009. See Stainless Steel Bar From Brazil: 
Extension of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 73 FR 63695 (October 27, 2008). On February 2, 
2009, we extended the time period for issuing the preliminary results 
of the review by 30 additional days until February 28, 2009. See 
Stainless Steel Bar From Brazil: Extension of Time Limit for 
Preliminary Results of Antidumping Duty Administrative Review, 74 FR 
5817 (February 2, 2009).
    The Department is conducting this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Act).

Scope of the Order

    The scope of the order covers stainless steel bar (SSB). The term 
SSB with respect to the order means articles of stainless steel in 
straight lengths that have been either hot-rolled, forged, turned, 
cold-drawn, cold-rolled or otherwise cold-finished, or ground, having a 
uniform solid cross section along their whole length in the shape of 
circles, segments of circles, ovals, rectangles (including squares), 
triangles, hexagons, octagons or other convex polygons. SSB includes 
cold-finished SSBs that are turned or ground in straight lengths, 
whether produced from hot-rolled bar or from straightened and cut rod 
or wire, and reinforcing bars that have indentations, ribs, grooves, or 
other deformations produced during the rolling process. Except as 
specified above, the term does not include stainless steel semi-
finished products, cut-length flat-rolled products (i.e., cut-length 
rolled products which if less than 4.75 mm in thickness have a width 
measuring at least 10 times the thickness, or if 4.75 mm or more in 
thickness having a width which exceeds 150 mm and measures at least 
twice the thickness), wire (i.e., cold-formed products in coils, of any 
uniform solid cross section along their whole length, which do not 
conform to the definition of flat-rolled products), and angles, shapes 
and sections. The SSB subject to the order is currently classifiable 
under subheadings 7222.10.0005, 7222.10.0050, 7222.20.0005, 
7222.20.0045, 7222.20.0075, and 7222.30.0000 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheadings 
are provided for convenience and customs purposes, the written 
description of the scope of the order is dispositive.

Verification

    As provided in section 782(i) of the Act, we have verified sales 
information provided by VMSA using standard verification procedures, 
including on-site inspection of the manufacturer's facility, the 
examination of relevant sales and financial records, and the selection 
of original documentation containing relevant information. Our 
verification results are outlined in the public version of the 
verification report, dated January 29, 2009, which is on file in the 
Central Records Unit, room 1117 of the main Commerce building.

Fair-Value Comparison

    To determine whether VMSA's sales of the subject merchandise from 
Brazil to the United States were at prices below normal value, we 
compared the export price (EP) or constructed export price (CEP) to the 
normal value as described in the ``Export Price,'' ``Constructed Export 
Price,'' and ``Normal Value'' sections of this notice. Therefore, 
pursuant to section 777A(d)(2) of the Act, we compared the EP or CEP of 
individual U.S. transactions to the monthly weighted-average normal 
value of the foreign like product where there were sales made in the 
ordinary course of trade as discussed in the ``Cost-of-Production 
Analysis'' section of this notice.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products covered by the ``Scope of the Order'' section, above, produced 
and sold by VMSA in the comparison market during the POR to be foreign 
like product for the purposes of determining appropriate products to 
use in comparison to U.S. sales of subject merchandise. Specifically, 
in making our comparisons, we used the following methodology. If an 
identical comparison-market model was reported, we made comparisons to 
weighted-average comparison-market prices that were based on all sales 
which passed the cost-of-production (COP) test of the identical product 
during the relevant or contemporary month. We calculated the weighted-
average comparison-market prices on a level of trade-specific basis. If 
there were no contemporaneous sales of an identical model, we 
identified the most similar comparison-market model. To determine the 
most similar model, we matched the foreign like product based on the 
physical characteristics reported by the respondent in the following 
order of importance: general type of finish, grade, remelting process, 
type of final finishing operation, shape, size.

Export Price

    The Department based the price of certain U.S. sales of subject 
merchandise by VMSA on EP as defined in section 772(a) of the Act 
because merchandise was sold before importation by the producer or 
exporter of the subject merchandise outside the United States to an 
unaffiliated purchaser in the United States. We calculated EP based on 
the packed F.O.B., C.I.F., or delivered price to unaffiliated 
purchasers in, or for exportation to, the United States. See section 
772(c) of the Act. We made adjustments to price for billing adjustments 
and discounts, where applicable. We also made deductions for any 
movement expenses in accordance with section 772(c)(2)(A) of the Act.

Constructed Export Price

    In addition to EP sales, the Department based the price of certain 
U.S. sales of subject merchandise by VMSA on CEP as defined in section 
772(b) of the Act because the merchandise was sold, before importation, 
by a U.S.-based seller affiliated with the producer to unaffiliated 
purchasers in the United States. We calculated the CEP based on the 
packed F.O.B., C.I.F., or delivered price to unaffiliated purchasers in 
the United States. In accordance with section 772(d)(1) of the Act, we 
calculated the CEP by deducting selling expenses associated with 
economic activities occurring in the United States, which includes 
direct selling expenses. In accordance with section 772(d)(1) of the 
Act, we also deducted those indirect selling expenses associated with 
economic activities occurring in the United States and the profit 
allocated to expenses deducted under section 772(d)(1) in accordance 
with sections 772(d)(3) and 772(f) of the Act. In accordance with 
section 772(f) of the Act, we computed profit based on the total 
revenues realized on sales in both the U.S. and comparison markets, 
less

[[Page 10024]]

all expenses associated with those sales. We then allocated profit to 
expenses incurred with respect to U.S. economic activity based on the 
ratio of total U.S. expenses to total expenses for both the U.S. and 
comparison markets.

Duty Drawback

    Section 772(c)(1)(B) of the Act provides that EP or CEP shall be 
increased by, among other things, ``the amount of any import duties 
imposed by the country of exportation which have been rebated, or which 
have not been collected, by reason of the exportation of the subject 
merchandise to the United States.'' The Department determines that an 
adjustment to U.S. price for claimed duty drawback is appropriate when 
a company can demonstrate that the ``import duty and rebate are 
directly linked to, and dependent upon, one another'' and ``the company 
claiming the adjustment can show that there were sufficient imports of 
the imported raw materials to account for the drawback received on the 
exported product.'' See Rajinder Pipes, Ltd. v. United States, 70 F. 
Supp. 2d 1350, 1358 (CIT 1999).
    VMSA claimed an adjustment to the U.S. price for duty drawback but 
at verification it was not able to support its claim. See Preliminary 
Results Analysis Memorandum for Villares Metals S.A., dated March 2, 
2009 (VMSA Preliminary Results Analysis Memorandum). The Department 
finds that VMSA has not provided substantial evidence on the record to 
establish the necessary link between the import duty and the claimed 
duty drawback. The Department also finds that VMSA has not demonstrated 
that that there were sufficient imports of the imported raw materials 
to account for the drawback it received on the exported product. 
Therefore, because VMSA has not met the Department's requirements, the 
Department has denied VMSA's request for a duty-drawback adjustment to 
U.S. price for the preliminary results. See VMSA Preliminary Results 
Analysis Memorandum.

Normal Value

A. Home-Market Viability

    In accordance with section 773(a)(1)(C) of the Act, in order to 
determine whether there was a sufficient volume of sales of SSB in the 
home market to serve as a viable basis for calculating the normal 
value, we compared the volume of the respondent's home-market sales of 
the foreign like product to its volume of the U.S. sales of the subject 
merchandise. VMSA's quantity of sales in the home market was greater 
than five percent of its sales to the U.S. market. Based on this 
comparison of the aggregate quantities sold in Brazil and to the United 
States and absent any information that a particular market situation in 
the exporting country did not permit a proper comparison, we 
preliminarily determine that the quantity of the foreign like product 
sold by the respondent in the exporting country was sufficient to 
permit a proper comparison with the sales of the subject merchandise to 
the United States, pursuant to section 773(a)(1) of the Act. Thus, we 
determine that VMSA's home market was viable during the POR. Id. 
Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we 
based normal value for the respondent on the prices at which the 
foreign like product was first sold for consumption in the exporting 
country in the usual commercial quantities and in the ordinary course 
of trade and, to the extent practicable, at the same level of trade as 
the U.S. sales.

B. Cost-of-Production Analysis

    On November 3, 2008, the petitioners\1\ filed a timely below-cost 
allegation based on the revised home-market database VMSA submitted 
with its October 27, 2008, response to our supplemental questionnaire. 
The petitioners based their cost allegation on VMSA's own cost 
information, i.e., inventory value and packing cost, which we found to 
be a reasonable methodology. On December 2, 2008, we initiated a cost 
investigation because we had reasonable grounds to believe or suspect 
that VMSA's sales of the foreign like product under consideration for 
the determination of normal value may have been made at prices below 
COP as provided by section 773(b)(2)(A)(ii) of the Act. Pursuant to 
section 773(b)(1) of the Act, we have conducted a COP investigation of 
VMSA's sales in the home market.
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    \1\ The petitioners are Carpenter Technology Corporation, 
Valbruna Slater, Inc., Electralloy Corporation, a Division of G.O. 
Carlson, Inc., and Universal Stainless.
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    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of the costs of materials and labor employed in 
producing the foreign like product, the selling, general, and 
administrative expenses, and all costs and expenses incidental to 
packing the merchandise. In our COP analysis, we used the home-market 
sales and COP information provided by VMSA in its questionnaire 
response.
    After calculating the COP, in accordance with section 773(b)(1) of 
the Act we tested whether home-market sales of the foreign like product 
were made at prices below the COP within an extended period of time in 
substantial quantities and whether such prices permitted the recovery 
of all costs within a reasonable period of time. See section 773(b)(2) 
of the Act. We compared model-specific COPs to the reported home-market 
prices less any applicable movement charges, discounts, and rebates.
    Pursuant to section 773(b)(2)(C) of the Act, when less than 20 
percent of VMSA's sales of a given product were at prices less than the 
COP, we did not disregard any below-cost sales of that product because 
the below-cost sales were not made in substantial quantities within an 
extended period of time. When 20 percent or more of VMSA's sales of a 
given product during the POR were at prices less than the COP, we 
disregarded the below-cost sales because they were made in substantial 
quantities within an extended period of time pursuant to sections 
773(b)(2)(B) and (C) of the Act and because, based on comparisons of 
prices to weighted-average COPs for the POR, we determined that these 
sales were at prices which would not permit recovery of all costs 
within a reasonable period of time in accordance with section 
773(b)(2)(D) of the Act.

C. Price-to-Price Comparisons

    We based normal value for VMSA on home-market sales to unaffiliated 
purchasers. VMSA's home-market prices were based on the packed, ex-
factory, or delivered prices. When applicable, we made adjustments for 
differences in packing and for movement expenses in accordance with 
sections 773(a)(6)(A) and (B) of the Act. We also made adjustments for 
differences in cost attributable to differences in physical 
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii) 
of the Act and 19 CFR 351.411 and for differences in circumstances of 
sale in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410. For comparisons to EP sales, we made circumstance-of-sale 
adjustments by deducting home-market direct selling expenses from and 
adding U.S. direct selling expenses to normal value. We also made 
adjustments, if applicable, for home-market indirect selling expenses 
to offset U.S. commissions in EP calculations. For comparisons to CEP 
sales, we made circumstance-of-sale adjustments by deducting home-
market direct selling expenses from normal value.

[[Page 10025]]

Level of Trade

    To the extent practicable, we determine normal value for sales at 
the same level of trade as EP or CEP sales. See section 773(a)(1)(B)(i) 
of the Act and 19 CFR 351.412. When there are no sales at the same 
level of trade, we compare EP and CEP sales to comparison-market sales 
at a different level of trade. The normal-value level of trade is that 
of the starting-price sales in the comparison market.
    To determine whether home-market sales were at a different level of 
trade than VMSA's U.S. sales in this review, we examined stages in the 
marketing process and selling functions along the chain of distribution 
between the producer and the unaffiliated customer. Based on our 
analysis, we have preliminarily determined that there is one level of 
trade in the United States and two levels of trade in the home market; 
we also find that the single U.S. level of trade is at the same level 
as one of the levels of trade in the home market and at a less advanced 
stage than the second home-market level of trade. Therefore, we have 
compared U.S. sales to home-market sales at the same level of trade 
and, where there was no home-market sale at the same level of trade, at 
a different level of trade.
    Because there are two levels of trade in the home market, we were 
able to calculate a level-of-trade adjustment based on VMSA's home-
market sales of the foreign like product. For a detailed description of 
our level-of-trade analysis for VMSA for these preliminary results, see 
VMSA Preliminary Results Analysis Memorandum.

Currency Conversion

    Pursuant to section 773(a) of the Act and 19 CFR 351.415, we 
converted amounts expressed in foreign currencies into U.S. dollar 
amounts based on the exchange rates in effect on the dates of the 
relevant U.S. sales, as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
weighted-average dumping margin for Villares Metals S.A. is 4.97 
percent for the period February 1, 2007, through January 31, 2008.

Disclosure and Public Comment

    We will disclose the calculations used in our analysis to parties 
in this review within five days of the date of publication of this 
notice in accordance with 19 CFR 351.224(b). Any interested party may 
request a hearing within 30 days of the publication of this notice in 
the Federal Register. See 19 CFR 351.310. If a hearing is requested, 
the Department will notify interested parties of the hearing schedule.
    Interested parties are invited to comment on the preliminary 
results of this review. The Department will consider case briefs filed 
by interested parties within 30 days after the date of publication of 
this notice in the Federal Register. See 19 CFR 351.309(c). Interested 
parties may file rebuttal briefs, limited to issues raised in the case 
briefs. See 19 CFR 351.309(d). The Department will consider rebuttal 
briefs filed not later than five days after the time limit for filing 
case briefs. Parties who submit arguments are requested to submit with 
each argument a statement of the issue, a brief summary of the 
argument, and a table of authorities cited. Further, we request that 
parties submitting written comments provide the Department with a 
diskette containing an electronic copy of the public version of such 
comments.
    We intend to issue the final results of this administrative review, 
including the results of our analysis of issues raised in the written 
comments, within 120 days of publication of these preliminary results 
in the Federal Register.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 
351.212(b)(1), we have calculated importer/customer-specific assessment 
rates for these preliminary results of review. We divided the total 
dumping margins for the reviewed sales by the total entered value of 
those reviewed sales for each reported importer or customer. We will 
instruct CBP to assess the importer/customer-specific rate uniformly, 
as appropriate, on all entries of subject merchandise made by the 
relevant importer or customer during the POR. See 19 CFR 351.212(b). 
The Department intends to issue instructions to CBP 15 days after the 
publication of the final results of review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment 
of Antidumping Duties). This clarification will apply to entries of 
subject merchandise during the POR produced by VMSA for which VMSA did 
not know its merchandise was destined for the United States. In such 
instances, we will instruct CBP to liquidate unreviewed entries of 
VMSA-produced merchandise at the all-others rate if there is no rate 
for the intermediate company(ies) involved in the transaction. For a 
full discussion of this clarification, see Assessment of Antidumping 
Duties.

Cash-Deposit Requirements

    The following deposit requirements will be effective upon 
publication of the notice of final results of administrative review for 
all shipments of SSB from Brazil entered, or withdrawn from warehouse, 
for consumption on or after the date of publication, as provided by 
section 751(a)(2)(C) of the Act: (1) the cash-deposit rate for VMSA 
will be the rate established in the final results of this review; (2) 
for previously reviewed or investigated companies not listed above, the 
cash-deposit rate will continue to be the company-specific rate 
published for the most recent period; (3) if the exporter is not a firm 
covered in this review, a prior review, or the less-than-fair-value 
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; (4) if neither the exporter nor the manufacturer has 
its own rate, the cash-deposit rate will be the all-others rate for 
this proceeding, 19.43 percent. These deposit requirements, when 
imposed, shall remain in effect until further notice.

Notification to Importers

    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 Department's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of doubled antidumping duties.
    These preliminary results of administrative review are issued and 
published in accordance with sections 751(a)(1) and 777(i)(1) of the 
Act.

    Dated: March 2, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-4907 Filed 3-6-09; 8:45 am]
BILLING CODE 3510-DS-S