Brass Sheet and Strip From Sweden; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-401-601]

Brass Sheet and Strip From Sweden; Preliminary Results of

Antidumping Duty Administrative Review

AGENCY: International Trade Administration/Import 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 Sweden. The review covers exports of this merchandise to the

United States by one manufacturer/exporter during the period March 1,

1991 through February 29, 1992. 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: March 23, 1994.

FOR FURTHER INFORMATION CONTACT: Valerie Turoscy, Chip Hayes, or John

Kugelman, Office of Antidumping Compliance, International Trade

Administration, U.S. Department of Commerce, Washington, DC 20230;

telephone: (202) 482-5253.

SUPPLEMENTARY INFORMATION:

Background

On March 6, 1987, the Department published in the Federal Register

(52 FR 6998) the antidumping duty order on brass sheet and strip from

Sweden. On April 13, 1992, in accordance with 19 CFR 353.22(c), we

initiated an administrative review of Outokumpu Copper Rolled Products

AB (OAB) for the period March 1, 1991 through February 29, 1992 (57 FR

12797). The Department is now conducting this administrative review in

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

Tariff Act). In addition, from December 6, 1993 to December 10, 1993 we

verified OAB's responses for this administrative review and found that,

in general, OAB's records supported the information which OAB submitted

to the Department.

Scope of Review

Imports covered by this review are sales or entries of brass sheet

and strip, other than leaded and tinned brass sheet and strip, from

Sweden. 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 merchandise is currently

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, OAB.

United States Price

We based USP on purchase price (PP), in accordance with section

772(b) of the Tariff Act, because the subject merchandise was sold to

unrelated purchasers in the United States prior to importation into the

United States. We calculated PP 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 U.S. point-to-point freight,

point-to-point insurance, brokerage and handling, customs duty, and

cash discounts.

We also adjusted USP for imputed consumption tax in accordance with

the decision made by the Court of International Trade (CIT) in Federal-

Mogul Corporation and the Torrington Company v. United States, Slip Op.

93-194 (CIT, October 7, 1993) (Federal-Mogul). In Federal-Mogul, the

CIT rejected the Department's methodology for calculating an addition

to USP under section 772(d)(1)(C) of the Tariff Act to account for

taxes that the exporting country would have assessed on the merchandise

had it been sold in the home market. The CIT held that the addition to

USP under section 772(d)(1)(c) of the Tariff Act should be the result

of applying the foreign market tax rate to the price of the U.S.

merchandise at the same point in the chain of commerce that the foreign

market tax was applied to the foreign market sales (Federal-Mogul at

12).

In accordance with the Court's decision, the Department has added

to USP the result of multiplying the foreign market tax rate by the

price of the U.S. merchandise at the same point in the chain of

commerce that the foreign market tax was applied to foreign market

sales. The Department has also adjusted the USP tax adjustments and the

amount of tax included in FMV. These adjustments deduct the portions of

the foreign market tax and the USP tax adjustment that are the result

of expenses that are included in the foreign market price used to

calculate foreign market tax and are included in the U.S. merchandise

price used to calculate the USP tax adjustment. These adjustments to

the amount of the foreign market tax and the USP tax adjustment are

necessary to prevent our methodology for calculating the USP tax

adjustment from creating antidumping duty margins where no margins

would exist if no taxes were levied upon foreign market sales.

This margin creation effect is due to the fact that the basis for

calculating both the amount of tax included in the price of the foreign

market merchandise and the amount of the USP tax adjustment includes

many expenses that are later deducted when calculating USP and FMV.

After these deductions are made, the amount of tax included in FMV and

the USP tax adjustment still reflects the amounts of these expenses.

Thus, a margin may be created that is not dependent upon a difference

between USP and FMV, but is the result of the price of the U.S.

merchandise containing more expenses than the price of the foreign

market merchandise. The Department's policy to avoid the margin

creation effect is in accordance with the United States Court of

Appeals' holding that the application of the USP tax adjustment under

section 772(d)(1)(C) of the Tariff Act should not create an antidumping

duty margin if pre-tax FMV does not exceed USP (Zenith Electronics

Corp. v. United States, 988 F.2d 1573, 1581 (Fed. Cir. 1993)). In

addition, the CIT has specifically held that an adjustment should be

made to mitigate the impact of expenses that are deducted from FMV and

USP upon the USP tax adjustment and the amount of tax included in FMV

(Daewoo Electronics Co., Ltd. v. United States, 760 F. Supp. 200, 208

(CIT, 1991) (Daewoo)). However, the mechanics of the Department's

adjustments to the USP tax adjustment and the foreign market tax amount

as described above are not identical to those suggested in Daewoo.

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, F.O.B., ex-factory, or delivered prices to unrelated

purchasers in the home market. Where applicable, we made adjustments

for home market warranty expenses, home market rebates, packing

expenses incurred in Sweden, home market credit, and home market inland

freight. We further adjusted FMV by adding U.S. direct selling expenses

(credit, warranties, and post-sale warehousing and commission

expenses). However, since commissions were paid only in the U.S.

market, we offset the U.S. commission expenses by deducting home market

indirect selling expenses from FMV in an amount not exceeding the

amount of U.S. commissions.

We also adjusted FMV for imputed consumption tax in accordance with

the Federal-Mogul decision as described above, and for differences in

physical characteristics. However, because we did not receive the

information necessary to support OAB's reported difference-in-

merchandise (difmer) amounts, for all U.S. sales to which we matched

home market sales of most similar merchandise, we used the largest

positive gauge and alloy difmer amounts reported by OAB (i.e., the most

adverse difmer amounts) as the best information available. See analysis

memorandum of February 24, 1994 for further explanation.

OAB also claimed a tool-setting expense as a circumstance-of-sale

(COS) adjustment. Based on information obtained at verification, we

determined that because this expense was a manufacturing cost and not a

selling expense, it did not warrant a COS adjustment. As a result, we

did not adjust for this expense in these preliminary results. See

analysis memorandum of February 24, 1994 for further explanation. 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 March 1, 1991

through February 29, 1992:

------------------------------------------------------------------------

Margin

Manufacturer/exporter (percent)

------------------------------------------------------------------------

OAB......................................................... 7.19

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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 review, the

cash deposit rate will be the ``all others'' rate established in the

LTFV investigation.

On May 25, 1993, the CIT, in Floral Trade Council v. United States,

Slip. Op. 93-79, and Federal-Mogul Corporation v. United States, Slip.

Op. 93-83, 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. Therefore, the ``all others'' rate for this

proceeding is 9.49 percent.

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: March 15, 1994.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 94-6845 Filed 3-22-94; 8:45 am]

BILLING CODE 3510-DS-P