Brass Sheet and Strip From the Netherlands; Preliminary Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-421-701]

Brass Sheet and Strip From the Netherlands; Preliminary Results

of Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty

Administrative Review.

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SUMMARY: The Department of Commerce (the Department) has conducted an

administrative review of the antidumping duty order on brass sheet and

strip from the Netherlands. The review covers one manufacturer/exporter

of this merchandise to the United States and the period August 1, 1990,

through July 31, 1991. The review indicates the existence of dumping

margins for this period.

As a result of this review, the Department has preliminarily

determined to assess antidumping duties equal to the difference between

United States price (USP) and foreign market value (FMV). We invite

interested parties to comment on these preliminary results.

EFFECTIVE DATE: December 28, 1994.

FOR FURTHER INFORMATION CONTACT: Thomas Killiam, Chip Hayes, or John

Kugelman, Office of Antidumping Compliance, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W., Washington, D.C. 20230;

telephone: (202) 482-5253.

SUPPLEMENTARY INFORMATION:

Background

On August 12, 1988, the Department published in the Federal

Register (53 FR 30455) the antidumping duty order on brass sheet and

strip from the Netherlands. Based on timely requests for review, on

September 18, 1991, in accordance with 19 CFR 353.22(c), we initiated

an administrative review of Outokumpu Copper Rolled Products AB (OBV)

for the period August 1, 1990 through July 31, 1991 (56 FR 47185). The

Department is now conducting this administrative review in accordance

with section 751 of the Tariff Act of 1930, as amended (the Tariff

Act).

Scope of the Review

Imports covered by this review are brass sheet and strip, other

than leaded and tin brass sheet and strip, from the Netherlands. The

chemical composition of the products under review is currently defined

in the Copper Development Association (C.D.A.) 200 Series or the

Unified Numbering System (U.N.S.) C20000 series. This review does not

cover products the chemical compositions of which are defined by other

C.D.A. or U.N.S. series. The physical dimensions of the products

covered by this review are brass sheet and strip of solid rectangular

cross section over 0.006 inch (0.15 millimeter) through 0.188 inch (4.8

millimeters) in gauge, regardless of width. Coiled, wound-on-reels

(traverse wound), and cut-to-length products are included. The

merchandise is classified under Harmonized Tariff Schedule (HTS) item

numbers 7409.21.00 and 7409.29.20.

The HTS item numbers are provided for convenience and customs

purposes. The written description remains dispositive. This review

covers one manufacturer/exporter, OBV, and the period August 1, 1990,

through July 31, 1991.

United States Price

We based USP on purchase price (PP) and exporter's sales price

(ESP), as appropriate, in accordance with section 772 of the Tariff

Act. We calculated PP and ESP based on C.I.F., duty paid prices,

delivered either to independent U.S. warehouses or to the customers'

premises. In accordance with section 772(d)(2) of the Tariff Act, we

made deductions, where appropriate, for movement expenses and customs

duty.

For ESP transactions, we made deductions for U.S. movement

expenses, direct selling expenses, indirect selling expenses and U.S.

manufacturing costs. U.S. direct selling expenses included warranty and

credit expenses, and commissions. U.S. indirect selling expenses

included U.S. pre-sale storage costs, U.S. selling, general, and

administrative expenses (SG&A), parent company headquarters sales and

marketing expenses allocated to U.S. sales, and storage and inventory

carrying costs prior to overseas shipment. U.S. manufacturing costs

included further processing costs, allocated general and administrative

expenses, and allocated profit.

For PP transactions, we made deductions for rebates and movement

expenses. Movement expenses included brokerage and handling, duty,

ocean freight, and U.S. freight.

We adjusted USP for taxes in accordance with our practice as

outlined in Siliconmanganese From Venezuela; Preliminary Determination

of Sales at Less than Fair Value, 59 FR 31204 (June 17, 1994)

(Siliconmanganese).

No other adjustments were claimed or allowed.

Foreign Market Value

The Department used home market price, as defined in section 773 of

the Tariff Act, to calculate FMV. Because the home market was viable,

we compared U.S. sales with sales of such or similar merchandise in the

home market.

Home market prices were based on the monthly weighted-average,

packed, delivered prices to unrelated purchasers in the home market. We

made adjustments, where applicable, for discounts, post-sale inland

freight, credit, warranty expenses, and packing.

On January 5, 1994, the Court of Appeals for the Federal Circuit,

in The Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland

Cement v. United States, No. 93-1239, held that the Department could

not deduct home market movement charges from FMV pursuant to its

inherent power to fill in gaps in the antidumping statute. Accordingly,

we have instead adjusted for those expenses, which were post-sale

freight expenses, under the circumstance-of-sale provision of 19 CFR

353.56.

We added to FMV packing expenses incurred in the home market for

all U.S. sales, and home market VAT. Where USP was based on PP, we

further adjusted FMV by adding U.S. direct selling expenses (credit,

warranties, post-sale warehousing, and commission expenses). We

followed our practice of adjusting for indirect selling expenses when

there is a commission in only one market, as called for in 19 CFR

353.56(b)(1):

the Secretary normally will make a reasonable allowance for other

selling expenses if the Secretary makes a reasonable allowance for

commissions in one of the markets under consideration and no

commission is paid in the other market under consideration.

For the PP sales, where a commission was granted in the U.S. market

only, we limited the amount classified as home market indirect selling

expenses by the sum of the U.S. commission and U.S. indirect selling

expenses, and deducted this amount from FMV.

For comparison to ESP sales, we adjusted FMV for home market

indirect selling expenses, limited to the amount of indirect selling

expenses incurred on U.S. sales (19 CFR Sec. 353.56(b)(2)).

We made adjustments for differences in merchandise.

We adjusted the amount of the home market VAT included in FMV in

accordance with our decision in Siliconmanganese.

We calculated FMV using monthly weighted-average prices of sales of

brass sheet and strip having the same characteristics as to alloy,

gauge group, width group, temper, form, and coating, as was done in

earlier proceedings.

The respondent requested that for sales comparison purposes we use

different groups of gauges and widths than were requested in the

questionnaire. The respondent's suggested gauge groups were more

narrowly defined than the gauge groups in the questionnaire, and the

respondent's width groups were defined differently than the width

groups in the questionnaire.

At verification we examined the respondent's manufacturing

techniques, costing methodology, and record-keeping systems. We found

that the respondent's suggested gauge and width groups correspond more

closely to variations in production costs and cost records than the

groups in the questionnaire. Therefore, we used the respondent's

suggested groups in our analysis.

Cost Test

Because of petitioner's allegations, we investigated whether OBV

sold such or similar merchandise in the home market at prices below the

cost of production (COP). In accordance with section 773(b) of the

Tariff Act, in determining whether to disregard home market sales made

at prices below the COP, we examined whether such sales were made in

substantial quantities over an extended period of time, and whether

such sales were made at prices which permitted recovery of all costs

within a reasonable period of time in the normal course of trade.

COP was reported as the sum of costs of materials, labor, factory

overhead, selling and general expenses, and packing. We compared COP to

home market prices, net of discounts, on a month-by-month basis.

When less than 10 percent of the home market sales of a model were

at prices below the COP, we did not disregard any sales of that model.

When 10 percent or more, but not more than 90 percent, of the home

market sales of a particular model were determined to be below cost, we

excluded the below-cost home market sales from our calculation of FMV,

provided that these below-cost home market sales were made over an

extended period of time. When more than 90 percent of the home market

sales of a particular model were made below cost over an extended

period of time, we disregarded all home market sales of that model in

our calculation of FMV.

To determine whether sales below cost had been made over an

extended period of time, we compared the number of months in which

sales below cost occurred for a particular model to the number of

months in which that model was sold. If the model was sold in fewer

than three months, we did not disregard below-cost sales unless there

were below-cost sales of that model in each month sold. If a model was

sold in three or more months, we did not disregard below-cost sales

unless there were sales below cost in at least three of the months in

which the model was sold.

Results of Cost Test

We compared individual home market prices with the monthly COP. We

tested the home market prices on the basis of the six physical criteria

used for product matches, and found that, for certain models, between

10 and 90 percent of home market sales were made at below-COP prices.

Since the respondent provided no indication that these sales were at

prices that would permit recovery of all costs within a reasonable

period of time and in the normal course of trade, we disregarded the

below-cost sales for those models, if those sales were made over an

extended period of time. We used the remaining above-cost sales for

comparison purposes.

For certain models, we used constructed value (CV) as the basis for

FMV when there were no contemporaneous home market sales of such or

similar merchandise.

We calculated CV in accordance with section 773(e) of the Tariff

Act. We included the cost of materials, labor, and factory overhead in

our calculations. For the respondent's SG&A, we used the statutory

minimum of 10 percent of the cost of manufacture (COM), or actual SG&A

expenses, whichever was greater. For the respondent's profit we used

the statutory minimum of eight percent of the sum of the COM and SG&A,

or actual profit, whichever was greater. We adjusted the CV for

warranty and credit expenses, and the lesser of home market indirect

selling expenses or U.S. commissions.

No other adjustments were claimed or allowed.

Preliminary Results of Review

As a result of our comparison of USP to FMV, we preliminarily

determine that the following margin exists for the period August 1,

1990 through July 31, 1991:

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Margin

Manufacturer/exporter (percent)

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OBV........................................................ 7.44

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Interested parties may request disclosure within 5 days of the date

of publication of this notice and may request a hearing within 10 days

of publication. Any hearing, if requested, will be held 44 days after

the date of publication or the first business day thereafter. Case

briefs and/or written comments from interested parties may be submitted

no later than 30 days after the date of publication. Rebuttal briefs

and rebuttals to written comments, limited to issues raised in those

comments, may be filed no later than 37 days after the date of

publication of this notice. The Department will publish the final

results of this administrative review, including the results of its

analysis of issues raised in any such written comments or at the

hearing.

The Department will determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between USP and FMV may vary from the percentage stated

above. The Department will issue appraisement instructions directly to

the Customs Service.

Furthermore, the following deposit requirements will be effective

for all shipments of the subject merchandise entered, or withdrawn from

warehouse, for consumption on or after the publication date of the

final results of this administrative review, as provided by section

751(a)(1) of the Tariff Act: (1) the cash deposit rate for the reviewed

company will be that 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 original

less-than-fair-value (LTFV) investigation, but the manufacturer is, the

cash deposit rate will be the rate established for the most recent

period for the manufacturer of the merchandise; and (4) if neither the

exporter nor the manufacturer is a firm covered in this or any previous

review, the cash deposit rate will be the ``all others'' rate

established in the LTFV investigation.

On May 25, 1993, the Court of International Trade, in Floral Trade

Council v. United States, 822 F. Supp. 766 (1993), and Federal-Mogul

Corporation v. United States, 822 F. Supp. 782 (1993), decided that

once an ``all others'' rate is established for a company, it can only

be changed through an administrative review. The Department has

determined that in order to implement these decisions, it is

appropriate to reinstate the original ``all others'' rate from the LTFV

investigation (or that rate as amended for correction for clerical

errors or as a result of litigation) in proceedings governed by

antidumping duty orders. Accordingly, the ``all others'' rate for this

proceeding is 9.49 percent, the rate from the LTFV investigation.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26 to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR

353.22.

Dated: December 16, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-31795 Filed 12-27-94; 8:45 am]

BILLING CODE 3510-DS-P