Certain Cut-to-Length Carbon Steel Plate From Sweden: Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-401-805]

Certain Cut-to-Length Carbon Steel Plate From Sweden: 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 a respondent, the Department of

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

antidumping duty order on Certain Cut-to Length Carbon Steel Plate from

Sweden (A-401-805). This review covers one manufacturer/exporter of the

subject merchandise to the United States during the period of review

(POR) February 4, 1993, through July 31, 1994.

We have preliminarily determined that sales to the United States

have been made below the foreign market value (FMV). If these

preliminary results are adopted in our final results of administrative

review, we will instruct U.S. Customs to assess antidumping duties

equal to the difference between the United States price (USP) and the

FMV. Interested parties are invited to comment on these preliminary

results. Parties who submit argument in this proceeding are requested

to submit with the argument (1) a statement of the issue and (2) a

brief summary of the argument.

EFFECTIVE DATE: September 19, 1995.

FOR FURTHER INFORMATION CONTACT: Elizabeth Patience or Jean Kemp,

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)

482-3793.

[[Page 48503]]

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 37213) the final affirmative antidumping duty determination on

Certain Cut-to-Length Carbon Steel Plate from Sweden, and published an

antidumping duty order on August 19, 1993 (58 FR 44168). On August 3,

1994, the Department published the notice of ``Opportunity to Request

an Administrative Review'' of this order for the period February 4,

1993, through July 31, 1994 (59 FR 39543). The Department received a

request for an administrative review from Svenskt Stal AB (SSAB). On

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

of SSAB.

The Department is now conducting this review in accordance with

section 751 of the Tariff Act of 1930, as amended (the Tariff Act).

This review covers sales of certain cut-to-length carbon steel plate

from Sweden. The POR is February 4, 1993 through July 31, 1994.

Scope of the Review

The products covered by this administrative review constitute one

``class or kind'' of merchandise: certain cut-to-length carbon steel

plate. These products include hot-rolled carbon steel universal mill

plates (i.e., flat-rolled products rolled on four faces or in closed

box pass, of a width exceeding 150 millimeters but not exceeding 1,250

millimeters and of a thickness of not less than 4 millimeters, not in

coils and without patterns in relief), of rectangular shape, neither

clad, plated nor coated with metal, whether or not painted, varnished

or coated with plastics or other nonmetallic substances; and certain

hot-rolled carbon steel flat-rolled products in straight lengths, of

rectangular shape, hot rolled, neither clad, plated, nor coated with

metal, whether or not painted, varnished, or coated with metal, whether

or not painted, varnished, or coated with plastics or other nonmetallic

substances, 4.75 millimeters or more in thickness and of a width which

exceeds 150 millimeters and measures at least twice the thickness, as

currently classifiable in the Harmonized Tariff Schedule (HTS) under

item numbers 7208.31.0000, 7208.32.0000, 7208.33.1000, 7208.33.5000,

7208.41.0000, 7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000,

7210.90.9000, 7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045,

7211.90.0000,7212.40.1000, 7212.40.5000, and 7212.50.0000. Included 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 is grade X-70

plate. These HTS item numbers are provided for convenience and Customs

purposes. The written description remains dispositive.

Verification

As provided in section 776(b) of the Tariff Act, we verified

information provided by the respondent by using standard verification

procedures, including onsite inspection of the manufacturer's

facilities, the examination of relevant sales and financial records,

and selection of original documentation containing relevant

information. Our verification results are outlined in the public

versions of the verification reports.

United States Price

All of SSAB's U.S. sales were based on the packed price to the

first unrelated purchaser in the United States. Because the sales were

made prior to importation to the United States, the Department

determined that purchase price, as defined in section 772(b) of the

Tariff Act, was the appropriate basis for calculating USP. For terms of

sale, please see Analysis Memorandum to the File, August 31, 1995. We

made deductions from purchase price, where appropriate, for foreign

inland freight and insurance, ocean freight, marine insurance,

brokerage and handling, port charges, U.S. customs duties and fees,

wharfage, and U.S. inland freight.

We used as date of sale the date of contract (if the contract set

quantity and value) or, if either price or quantity was not set, the

date of order confirmation (the date on which price and quantity are

fixed).

We adjusted USP for Swedish value-added taxes (VAT) in accordance

with our practice as outlined in recent determinations, including

Silicomanganese from Venezuela, Final Determination of Sales at Less

Than Fair Value, 59 FR 55435, 55439 (November 7, 1994).

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 because

the amount of similar merchandise sold in the home market is more than

five percent of the amount sold to third countries. See 19 CFR

353.48(a). Further, SSAB had sales both to related and unrelated

parties in the home market during the POR. In order to determine

whether sales to related parties might be appropriate to use as the

basis of FMV, the Department compared prices of those sales to prices

to unrelated parties, on a model-by-model basis. When possible, the

Department used unrelated party sales at the same level of trade as the

related party sales for this comparison. When the price ratio of

related to unrelated purchases was less than 99.5 percent, we

determined that those sales were not arm's length sales and disregarded

those sales. See Final Determination of Sales at Less Than Fair Value:

Certain Cold-Rolled Carbon Steel Flat Products from Argentina, (58 FR

37062, July 9, 1993).

We used prices to related purchasers only if such sales were made

at arm's length as defined above. In addition, we determined that sales

made by SSAB through its related distributor, Tibnor AB (TAB), were a

significant portion of the home market sales listing. We asked SSAB to

report the portion of home market sales made through TAB to the first

unrelated customer. SSAB claimed TAB could not identify the supplying

producer for sales to unrelated customers. We verified this claim. We

also verified that TAB's reported price is set without regard to the

supplying producer. We asked SSAB to develop an allocation methodology

to account for SSAB sales through TAB to unrelated customers. However,

TAB's proposed allocation methodology for reporting the downstream

sales is inconsistent with standard accounting principles because it

does not consider the impact of purchases from non-SSAB suppliers, it

assumes that TAB's beginning inventory was zero, and it assumes that

the first plate sold is always SSAB plate. It is also inconsistent with

TAB's normal methodology for valuing its inventory. Additionally, at

verification, we found that the percentage of TAB purchases of SSAB

merchandise is significantly less than respondent's methodology

assumes. Therefore, the impact of merchandise sourced from producers

other than SSAB is greater than indicated by respondent's methodology.

After evaluating the larger percentage of non-SSAB merchandise

purchased by TAB, the lack of information regarding

[[Page 48504]]

non-SSAB purchases, and the inconsistencies with standard accounting

practices, we decided not to use respondent's methodology. However, we

determined that as the final price to the customer was set regardless

of producer and that TAB accurately reported most of its expenses and

adjustments, it was reasonable to use TAB's sales listing. Therefore,

we rejected TAB's allocation methodology, revised TAB's reported sales

to neutralize the effect of non-SSAB suppliers and used the revised

sales listing in our calculations. For more information on our use of

SSAB's downstream sales, see Analysis Memorandum to the File, August

31, 1995.

In accordance with 19 CFR 353.58 and 353.55, we compared U.S. sales

to home market sales made at the same level of trade, and in comparable

commercial quantities, where possible. SSAB reported a number of sales

in its home market database in currencies other than the Swedish

currency. Company officials explained these are typically sales where

the merchandise was shipped to an address in Sweden, as indicated by

the destination code of the sale, but customer's invoicing address was

not in Sweden. We verified that SSAB properly included these home

market sales in its reporting to the Department. Therefore, we included

these sales in our calculations.

SSAB had sales of secondary merchandise (non-prime) in the home

market; however, there were no sales of secondary merchandise in the

U.S. market during the POR. Therefore, as per our established model

match criteria, the Department only compared prime merchandise sold in

the United States to prime merchandise sold in the home market.

Based on the Department's previous determination of sales made at

below the cost of production (COP) in the original LTFV investigation

in accordance with section 773(b) of the Tariff Act, we determined that

there were reasonable grounds to believe or suspect that, for this

review period, SSAB had made sales of subject merchandise in the home

market at prices less than the COP. As a result, we investigated

whether SSAB sold such or similar merchandise in the home market at

prices below the COP 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. In

accordance with 19 CFR 353.51(c), we calculated COP for SSAB as the sum

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

We compared COP to home market prices, net of price adjustments,

discounts, and movement expenses.

Based upon data collected during verification of SSAB, we

recalculated SSAB's general and administrative expenses, after

adjusting cost of goods sold for one subsidiary for the effect of

inter-company transfers. We also recalculated finance expense using

SSAB's consolidated financial statements.

Pursuant to the Department's practice, 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 than 90 percent, of the home market sales during the POR were

priced below COP, we excluded from the calculation of FMV those home

market sales which were priced 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. See Final Determination of Sales at Less

Than Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the

United Kingdom, (60 FR 10558, February 27, 1995).

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 SSAB 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.

SSAB did not report COP information for all product models. This

affected both the home market and downstream sales listings. For

certain of these models, respondent provided a methodology for

assigning average costs for similar products. We used their methodology

to the extent possible. However, this methodology did not cover all

product models with missing COP. We have assigned the highest costs for

similar products to the sales of models missing COP information as

partial BIA. For more information, see our Analysis Memorandum of

August 31, 1995.

In accordance with section 773(b) of the Tariff Act, the Department

normally uses the constructed value (CV) of those models for which home

market price has been disregarded as below COP. See, e.g., Mechanical

Transfer Presses from Japan, Final Results of Antidumping Duty

Administrative Review, 59 FR 9958 (March 2, 1994). We did not use CV as

FMV for those U.S. models for which we were unable to find a home

market match because we found during verification that SSAB had not

reported certain home market sales of subject merchandise. We therefore

assume that all unmatched sales were the result of this reporting

failure. We used a margin based upon BIA only for those unmatched U.S.

sales. As BIA, we applied to those sales SSAB's final margin determined

in the less-than-fair value (LTFV) investigation. We have determined

that resorting to total BIA is not warranted because SSAB'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).

In accordance with section 773 (a)(1)(A) of the Tariff Act, for

those U.S. models for which we were able to find a home market such or

similar match, we calculated FMV based on the packed home market sales

price to unrelated and related purchasers in the home market. For terms

of sale, please see Analysis Memorandum to the File, August 31, 1995.

Pursuant to section 773(a)(4)(B) of the Tariff Act and 19 CFR

353.56(a)(2), we made circumstance of sale adjustments to FMV, where

applicable, for credit expenses, handling expense, inland freight,

discounts and rebates. Where appropriate, we deducted from FMV home

market packing costs and added to FMV packing expenses incurred in

[[Page 48505]]

Sweden for U.S. sales. We also adjusted FMV, where appropriate, for

physical differences in the merchandise, in accordance with 19 CFR

353.57. Due to discrepancies found at verification, reporting errors,

and unsupported adjustments, we disallowed and/or recalculated certain

expenses and adjustments. See Analysis Memorandum to the File, August

31, 1995 for more information on these disallowed and/or recalculated

adjustments.

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 February 4,

1993, through July 31, 1994:

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

Margin

Manufacturer (percent)

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SSAB....................................................... 10.96

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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 not 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 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 this administrative review, 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 Cut-to-Length Carbon

Steel Plate from Sweden 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 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, 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 24.23

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

See Final Determination of Sales at Less Than Fair Value: Certain Cut-

to-Length Carbon Steel Plate from Sweden, (58 FR 37213, July 9, 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 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: September 13, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-23220 Filed 9-18-95; 8:45 am]

BILLING CODE 3510-DS-P