Certain Cold-Rolled Carbon Steel Flat Products From Germany; Preliminary Results of Antidumping Duty Administrative Review

[[Page 39355]]

DEPARTMENT OF COMMERCE

International Trade Administration

[A-428-814]

Certain Cold-Rolled Carbon Steel Flat Products From Germany;

Preliminary Results of Antidumping Duty 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: In response to a request by the respondent, the Department of

Commerce (the Department) is conducting an administrative review of the

antidumping duty order on Certain Cold-Rolled Carbon Steel Flat

Products From Germany (A-428-814). The review covers sales from one

manufacturer of the subject merchandise to the United States during the

period August 18, 1993 through July 31, 1994.

We have preliminarily determined that sales have been made below

foreign market value (FMV). If these preliminary results are adopted in

our final results of the administrative review, we will instruct U.S.

Customs to assess antidumping duties equal to the difference between

the United States price (USP) and FMV.

Interested parties are invited to comment on these preliminary

results.

EFFECTIVE DATE: August 2, 1995.

FOR FURTHER INFORMATION CONTACT: Steve Bezirganian or Robin Gray,

Office of Agreements Compliance, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C. 20230, telephone: (202)

482-1395 or (202) 482-0196, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute and to the

Department's regulations are references to the provisions as they

existed on December 31, 1994.

Background

On July 9, 1993 the Department published in the Federal Register

(58 FR 37136) the final affirmative antidumping duty determination on

certain cold-rolled carbon steel flat products from Germany, for which

we published an amendment and an antidumping duty order on August 19,

1993 (58 FR 44170). On August 3, 1994, the Department published the

notice of ``Opportunity to Request an Administrative Review'' of this

order for the period August 18, 1993 through July 31, 1994 (59 FR

39543). C.D. Walzholz, J.N. Eberle & Cie, GmbH, Rochlinger Kaltwalzwerk

and Thyssen Stahl AG (Thyssen) requested an administrative review. We

initiated the administrative review on September 8, 1994 (59 FR 46391).

Subsequently, C.D. Walzholz, J.N. Eberle & Cie, GmbH, and Rochlinger

Kaltwalzwerk requested that they be allowed to withdraw from the

administrative review. On April 12, 1995, we published a ``Notice of

Partial Termination of Administrative Review of Antidumping Order''

with respect to these three respondents (60 FR 18581). The Department

is conducting this review in accordance with section 751 of the Tariff

Act of 1930, as amended (the Tariff Act).

Scope of the Review

The products covered by this review include cold-rolled (cold-

reduced) carbon steel flat-rolled products, of rectangular shape,

neither clad, plated nor coated with metal, whether or not painted,

varnished or coated with plastics or other nonmetallic substances, in

coils (whether or not in successively superimposed layers) and of a

width of 0.5 inch or greater, or in straight lengths which, if of a

thickness less than 4.75 millimeters, are of a width of 0.5 inch or

greater and which measures at least 10 times the thickness or if of a

thickness of 4.75 millimeters or more are of a width which exceeds 150

millimeters and measures at least twice the thickness, as currently

classifiable in the HTS under item numbers 7209.11.0000, 7209.12.0030,

7209.12.0090, 7209.13.0030, 7209.13.0090, 7209.14.0030, 7209.14.0090,

7209.21.0000, 7209.22.0000, 7209.23.0000, 7209.24.1000, 7209.24.5000,

7209.31.0000, 7209.32.0000, 7209.33.0000, 7209.34.0000, 7209.41.0000,

7209.42.0000, 7209.43.0000, 7209.44.0000, 7209.90.0000, 7210.70.3000,

7210.90.9000, 7211.30.1030, 7211.30.1090, 7211.30.3000, 7211.30.5000,

7211.41.1000, 7211.41.3030, 7211.41.3090, 7211.41.5000, 7211.41.7030,

7211.41.7060, 7211.41.7090, 7211.49.1030, 7211.49.1090, 7211.49.3000,

7211.49.5030, 7211.49.5060, 7211.49.5090, 7211.90.0000, 7212.40.1000,

7212.40.5000, 7212.50.0000, 7217.11.1000, 7217.11.2000, 7217.11.3000,

7217.19.1000, 7217.19.5000, 7217.21.1000, 7217.29.1000, 7217.29.5000,

7217.31.1000, 7217.39.1000, and 7217.39.5000. Included in this review

are flat-rolled products of nonrectangular cross-section where such

cross-section is achieved subsequent to the rolling process (i.e.,

products which have been ``worked after rolling'')--for example,

products which have been bevelled or rounded at the edges. Excluded

from this review is certain shadow mask steel, i.e., aluminum-killed,

cold-rolled steel coil that is open-coil annealed, has a carbon content

of less than 0.002 percent, is of 0.003 to 0.012 inch in thickness, 15

to 30 inches in width, and has an ultra flat, isotropic surface. These

HTS item numbers are provided for convenience and Customs purposes. The

written description remains dispositive.

The period of review (POR) is August 18, 1993 through July 31,

1994. This review covers sales of cold-rolled carbon steel by one

manufacturer (Thyssen).

United States Price

The Department used exporter's sales price (ESP) because all sales

to the first unrelated purchaser in the United States, whether before

or after importation, met the requirements set forth by Section 772(c)

of the Tariff Act. ESP was based on the packed prices at which the

merchandise was sold under various terms to unrelated purchasers in the

United States. We made adjustments, where applicable, for foreign

inland freight, plant freight, ocean freight, marine insurance,

brokerage and handling, U.S. inland freight, U.S. duty, U.S. credit,

discounts, inventory carrying costs, technical service expenses,

warranties, warehousing, and indirect selling expenses (which include

interest on fixed assets, other U.S.-incurred selling expenses, and

export selling expenses).

We also adjusted ESP for value added in further manufacturing,

including an allocation of profit earned on U.S. sales.

We adjusted USP for taxes in accordance with our practice as

outlined in various determinations, including Silicomanganese from

Venezuela; Final Determination of Sales at Less Than Fair Value, 59 FR

55435, 55439 (November 7, 1994).

At the German and U.S. verifications, Thyssen suggested various

corrections to be made to its database. At verification, the Department

accepted the changes because each change was minor and ministerial in

nature. On May 12, 1995, the Department instructed Thyssen to make all

of the changes to its database, excluding the change suggested by

Thyssen for certain discounts, as explained below. On May

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22, 1995, Thyssen submitted a revised tape which incorporated these

corrections. Based on a review of all of Thyssen's submissions and the

Department's findings at verification, the Department determined that

the revised May 22, 1995, tape contains the following problems: (1) the

identification and deletion of what Thyssen characterized as

``duplicate'' invoices in a manner inconsistent with the changes

suggested by Thyssen at verification; (2) unexplained changes to

unshipped balances for one order; (3) changes to quantity of U.S. sales

from Richburg, a division of Thyssen, Inc. (TINC), other than those

suggested by Thyssen at verification, and other inconsistencies in the

changes which Thyssen did suggest; (4) unexplained quantity and price

changes for four observations; and (5) errors in the discount field for

one U.S. customer. Due to these discrepancies we are unable to perform

an accurate calculation for certain sales. Counsel for petitioners has

argued that the Department should use total BIA in this case due to the

deficiencies in Thyssen's response. We have determined, however, that

resorting to total best information available (``BIA'') is not

warranted because Thyssen's U.S. database is not sufficiently flawed

such that the response as a whole is unreliable. See National Steel

Corporation v. United States, 870 F. Supp. 1130, 1135 (CIT 1994); see

also the July 20, 1995, decision memorandum from Richard O. Weible to

Roland L. MacDonald. Instead, we used a margin based upon BIA only for

those sales of U.S. products where we did not have complete and

accurate information.

The adversity of the information used as partial BIA depends upon

the level of sufficiency of the information provided. When partial BIA

is warranted, but the errors in the information submitted constitute a

failure to provide the necessary data, the Department consistently

applies adverse BIA. Id. (citing, inter alia, Certain Corrosion-

Resistant Carbon Steel Flat Products From Finland, 58 Fed. Reg. 37,122,

37,124 (1993)). By contrast, when only a minor adjustment in the data

is involved or there is an inadvertent gap in the record, we apply a

less adverse or neutral surrogate. Nat'l Steel at 1136.

Thyssen's revised database did contain unauthorized changes and

other unexplained problems. However, the sales affected are minimal in

quantity, and the apparent inaccuracies consist mostly of data-entry

problems rather than omissions or insufficiencies in Thyssen's

reporting. For these reasons, we have not applied the most adverse

partial BIA. We have chosen as BIA Thyssen's weighted-average margin

from the original investigation.

We disallowed the exchange rate expense which Thyssen claimed due

to unexplained changes in this expense in the May 22, 1995 submission.

(See Analysis Memorandum to the File, June 16, 1995).

Also, due to inaccurate and deficient information provided during

the verification of product characteristics for one U.S. sale, we are

assigning to that sale a margin based on BIA, as previously described.

Further, Thyssen failed to report contemporaneous home market sales for

1992 requirements contract sales by the Budd Company, a related parts

manufacturer. We have assigned these sales a margin based on BIA, as

previously described (see Analysis Memorandum to the File, June 16,

1995). Finally, Thyssen failed to include in its database a storage/

warehouse expense incurred by TINC on certain U.S. sales. We adjusted

U.S. price to account for this expense, where appropriate (see Analysis

Memorandum to the File, June 16, 1995). Also, due to errors noted at

verification, we adjusted warehousing expense for the automotive

division for both fiscal years.

No other adjustments were claimed or allowed.

Foreign Market Value

Based on a comparison of the volume of home market and third

country sales, we determined that the home market was viable.

Therefore, in accordance with section 773(a)(1)(A) of the Tariff Act,

we based FMV on the packed prices at which the merchandise was sold

under various terms to related and unrelated purchasers in the home

market.

Based on a review of Thyssen's submissions and findings at

verification, the Department determined that Thyssen need not report

the home market sales made by Thyssen's related parties to the first

unrelated party (downstream sales). The vast majority of the products

sold by these related parties in the home market possessed physical

characteristics that made them less similar to those imported into the

United States than those sold directly by Thyssen to its related and

unrelated home market customers in transactions suitable for matching

purposes. The Department determined that only a small portion of the

downstream sales could provide potential matches to the company's U.S.

sales. Considering the burden that would have been required to report

these sales relative to the potential utility of the sales, we

determined that they need not be reported (see Analysis Memorandum to

the File, June 16, 1995).

Petitioners alleged that Thyssen sold cold-rolled carbon steel in

the home market at prices below their cost of production (COP). Based

on this allegation, the Department determined that it had reasonable

grounds to believe or suspect that Thyssen had sold steel flat products

in the home market at below cost prices. A cost investigation was

therefore initiated in accordance with section 773(b) of the Tariff

Act. As a result, we investigated whether Thyssen sold such or similar

merchandise in the home market at prices below the COP. In accordance

with 19 CFR 353.51(c), we calculated COP for Thyssen as the sum of

reported materials, labor, factory overhead, and general expenses. We

compared COP to home market prices, discounts, and movement expenses.

Based on our verification of Thyssen's cost response, we made the

following adjustments to its COP data:

1. We recalculated the allocation of the thirteenth month

adjustment on the basis of costs reported in the unconsolidated Thyssen

Stahl income statements for the respective fiscal years.

2. We reduced the claimed interest income offset by eliminating

dividend income.

3. We recalculated net financing expense on a model-specific basis

by applying the net financing expense ratio to the COM of each unique

product.

After computing COP, we compared the VAT-neutral product-specific

COP to the VAT-neutral reported prices net of movement charges and

discounts. 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.

To satisfy the requirement of Section 773(b)(1) that below cost

sales be disregarded only if made in substantial quantities, we applied

the following methodology. For each model for which less than 10

percent, by quantity, of the home market sales during the POR were made

at prices below COP, we included all sales of that model in the

computation of FMV. For each model for which 10 percent or more, but

less that 90 percent, of the home market sales during the POR were

priced below COP, we excluded those sales priced

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below COP, provided that they were made over an extended period of

time. For each model for which 90 percent or more of the home market

sales during the POR were priced below COP and were made over an

extended period of time, we disregarded all sales of that model in our

calculation and, in accordance with section 773(b) of the Tariff Act,

we used the constructed value (CV) of those models, as described below.

See, e.g., Mechanical Transfer Presses from Japan, Final Results of

Antidumping Duty Administrative Review, 59 FR 9958 (March 2, 1994).

In accordance with section 773(b)(1) of the Tariff Act, 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. See Tapered Roller Bearings and Parts Thereof, Finished and

Unfinished, From Japan and Tapered Roller Bearings, Four Inches or Less

in Outside Diameter, and Components Thereof, From Japan; Final Results

of Antidumping Duty Administrative Reviews, 58 FR 64720, 64729

(December 8, 1993).

Because Thyssen provided no indication that its below-cost sales of

models within the ``greater than 90 percent'' and the ``between 10 and

90 percent'' categories 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 those sales of models within the ``10 to 90

percent'' category which were made below cost over an extended period

of time. In addition, as a result of our COP test for home market sales

of models within the ``greater than 90 percent'' category, we based FMV

on CV for all U.S. sales for which there were insufficient sales of the

comparison home market model at or above COP. Finally, where we found,

for certain of Thyssen's models, home market sales for which less than

10 percent were made below COP, we used all home market sales of these

models in our comparisons.

We also used CV as FMV for those U.S. sales for which there was no

contemporaneous sale of such or similar merchandise in the home market.

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

We included the cost of materials, labor, factory overhead, and U.S.

packing in our calculations. Where the general expenses were less than

the statutory minimum of 10 percent of the cost of manufacture (COM),

we calculated general expenses as 10 percent of the COM. Where the

actual profits were less than the statutory minimum of 8 percent of the

COM plus general expenses, we calculated profit as 8 percent of the sum

of COM plus general expenses. Based on our verification of Thyssen's

cost response, we made the same adjustments to respondent's CV data as

we made to its COP data, as discussed above.

In accordance with section 773 of the Tariff Act, for those U.S.

models for which we were able to find a home market such or similar

match that had sufficient above-cost sales, we calculated FMV based on

the packed prices at which the merchandise was sold under various terms

to unrelated purchasers or to related purchasers (where an arm's-length

relationship was demonstrated) in the home market. We made adjustments,

where applicable, for freight, inland insurance, discounts, credit and

warehousing in accordance with 19 CFR 353.56(a)(1). We adjusted FMV for

indirect selling expenses in the home market, which include plant

freight, warranty, technical services, inventory carrying costs and

other indirect selling expenses. We limited the home market indirect

selling expense deductions by the amount of indirect selling expenses

incurred in the United States, in accordance with 19 CFR 353.56(b)(2).

FMV was also adjusted for differences in physical characteristics.

After deducting home market packing, we added packing expenses incurred

in Germany for U.S. sales to FMV. We adjusted for the German value

added tax. 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 18,

1993 through July 31, 1994:

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

Margin

Manufacturer/reseller/exporter (percent)

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

Thyssen...................................................... 4.80

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

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 not later than 37 days after the date of

publication of this notice. The Department will publish the final

results of these administrative reviews including the results of its

analysis of issues raised in any such written comments or at a hearing.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between the USP and FMV may vary from the percentages

stated above.

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 these administrative reviews, as provided for by

section 751(a)(1) of the Tariff Act. A cash deposit of estimated

antidumping duties shall be required on shipments of certain cold-

rolled carbon steel flat products from Germany as follows: (1) The cash

deposit rate for the reviewed company will be the rate established in

the final results of this review; (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 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 19.02

percent. This is the ``all others'' rate from the LTFV investigation.

See Antidumping Duty Order and Amendment to Final Determination of

Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat

Products From Germany, 58 FR 44170 (August 19, 1993).

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 Department's presumption that

reimbursement of antidumping duties occurred and the

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subsequent assessment of double antidumping duties.

This administrative review and this 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: July 26, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-19013 Filed 8-1-95; 8:45 am]

BILLING CODE 3510-DS-P