Stainless Steel Plate From Sweden: Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-401-040]

Stainless 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 from the petitioners, the Department

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

the antidumping finding on stainless steel plate from Sweden. The

review covers two manufacturers/exporters of the subject merchandise to

the United States and the period June 1, 1995 through May 31, 1996.

Record evidence at this stage of the review indicates the existence of

sales below normal value during the period of review.

If these preliminary results are adopted in our final results of

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

duties on all appropriate entries.

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 (no longer than five pages, including

footnotes).

EFFECTIVE DATE: July 8, 1997.

FOR FURTHER INFORMATION CONTACT: Michael J. Heaney or Linda Ludwig,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone (202) 482-4475/3833.

APPLICABLE STATUTE: Unless otherwise indicated, all citations to the

Tariff Act of 1930, as amended (the Act) are references to the

provisions effective January 1, 1995, the effective date of the

amendments made to the Act by the Uruguay Round Agreements Act (URAA).

In addition, unless otherwise indicated, all references to the

Department's regulations are to Part 353 of 19 C.F.R., (1997).

SUPPLEMENTARY INFORMATION:

Background

The Department of the Treasury published an antidumping finding on

stainless steel plate from Sweden on June 8, 1973 (38 Fed. Reg. 15079).

The Department of Commerce published a notice of ``Opportunity To

Request Administrative Review'' of the antidumping finding for the

1995/1996 review period on June 6, 1996 (61 Fed. Reg. 28840). On June

28, 1996, the petitioners, Allegheny Ludlum Steel Corp., G.O. Carlson,

Inc., and Washington Steel Corporation filed a request for review of

Uddeholms AB (Uddeholm), and Avesta Sheffield AB (Avesta). We initiated

the review on August 8, 1996 (61 Fed. Reg. 41374).

Scope of the Review

Imports covered by this review are shipments of stainless steel

plate which is commonly used in scientific and industrial equipment

because of its resistance to staining, rusting and pitting. Stainless

steel plate is classified under Harmonized Tariff schedule of the

United States (HTSUS) item numbers 7219.11.00.00, 7219.12.00.05,

7209.12.00.15, 7219.12.00.45, 7219.12.00.65, 7219.12.00.70,

7219.12.00.80, 7219.21.00.05, 7219.21.00.50, 7219.22.00.05,

7219.22.00.10, 7219.22.00.30, 7219.22.00.60, 7219.31.00.10,

7219.31.00.50, 7220.11.00.00, 7222.30.00.00, and 7228.40.00.00.

Although the subheading is provided for convenience and customs

purposes, the written description of the merchandise under

investigation is dispositive.

On July 11, 1995, the Department determined that Stavax ESR

(Stavax), UHB Ramax (Ramax), and UHB 904L (904L) when flat-rolled are

within the scope of the antidumping finding.

On November 3, 1995, the Department determined that stainless steel

plate products Stavax, Ramax, and 904L when forged, are within the

scope of the antidumping finding.

The review covers the period June 1, 1995 through May 31, 1996. The

Department is conducting this review in accordance with section 751 of

the Act, as amended.

United States Price (USP)

In calculating USP, the Department treated respondent's sales as

export price (EP) sales, as defined in section 772(a) of the Act, when

the merchandise

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was first sold to unaffiliated U.S. purchasers by an exporter or

producer outside the U.S., prior to the date of importation. The

Department treated respondent's sales as constructed export price (CEP)

sales, as defined in section 772(b) of the Act, when the merchandise

was first sold to unrelated U.S. purchasers before or after

importation, by an affiliated seller in the United States.

EP was based on the delivered price to unrelated purchasers in the

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

freight, U.S. inland freight and insurance, U.S. customs duties, and

early payment discounts in accordance with section 772(c) of the Act.

We based CEP on the delivered price to unrelated customers in the

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

freight, U.S. inland freight, U.S. brokerage and handling expenses.

U.S. customs duties, early payment discounts, and rebates. In

accordance with section 772(d)(1) of the Act, we made deductions for

warranty expenses, royalties, slitting and cutting expenses, credit

expenses and indirect selling expenses associated with economic

activity in the United States.

With respect to merchandise to which value was added in the U.S. by

Avesta prior to sale to unaffiliated customers, we deducted the cost of

further manufacturing in accordance with section 772(d)(2) of the Act.

Pursuant to section 772(d)(3) of the Act, the price was further reduced

by an amount for profit to arrive at the CEP.

Normal Value

In order to determine whether there were sufficient sales of

stainless steel plate in the home market (HM) to serve as a viable

basis for calculating normal value (NV), we compared the volume of home

market sales of subject merchandise to the volume of subject

merchandise sold in the United States, in accordance with section

773(a)(1)(C) of the Act. Avesta's aggregate volume of HM sales of the

foreign like product was greater than five percent of its respective

aggregate volume of U.S. sales of the subject merchandise. Therefore,

for Avesta, we have based NV on HM sales. Uddeholm's aggregate volume

of HM sales was less than five percent of U.S. sales of the subject

merchandise. Because Canada constituted Uddeholm's largest third-

country market, we based NV for Uddeholm on sales to that market.

Avesta made sales to both affiliated and unaffiliated distributors

during the period of review. We included sales to affiliated

distributors when we determined those sales to be at arms-length (i.e.,

at average prices that were 99.5 percent or more of prices to

unaffiliated distributors). When the price to affiliated distributors

was less than 99.5 percent of the price to unaffiliated distributors,

we excluded those sales to affiliated distributors from our calculation

of NV. See, e.g., Rules and Regulations, Antidumping Duties;

Countervailing Duties 62 Fed. Reg. 27296, 27355 (May 19, 1997). (The

Department's current policy is to consider transactions between

affiliated parties as ``arm's length'' if the prices to affiliated

purchasers are on average at least 99.5 percent of the prices charged

to unaffiliated purchasers.)

For Avesta, we made deductions to NV for HM inland freight,

quantity discounts, distributor discounts, credit expenses, warehousing

expenses, and warranties.

For Uddeholm, we made deductions to NV for ocean freight, third-

country inland freight, and early payment discounts. For comparisons to

EP, we made an addition to NV for differences in credit expenses.

Level of Trade

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

Statement of Administrative Action (SAA) accompanying the URAA (at

pages 829-831), to the extent practicable, the Department will

calculate NV based on sales at the same level of trade as the U.S. sale

(either EP or CEP). When there are no sales in the comparison market at

the same level of trade as the U.S. sale(s), the Department may compare

sales in the U.S. and foreign markets at a different level of trade,

and adjust NV if appropriate. The NV level of trade is that of the

starting-price sales in the home market. (See e.g., Certain Circular

Welded Carbon Steel Pipes and Tubes from Taiwan; Preliminary Results of

Antidumping Duty Administrative Review, 62 Fed. Reg. 31070 (June 6,

1997).

As the Department explained in Gray Portland Cement and Clinker

from Mexico: Final Results of Antidumping Duty Administrative Review,

(Cement from Mexico) 62 Fed. Reg. 17148, 17156 (April 9, 1997), for

both EP and CEP, the relevant transaction for the level of trade

analysis is the sale from the exporter to the importer. While the

starting price for CEP is that of a subsequent resale to an

unaffiliated buyer, the construction of the CEP results in a price that

would have been charged if the importer had not been affiliated. We

calculate the CEP by removing from the first resale to an independent

U.S. customer the expenses under section 772(d) of the Act and the

profit associated with these expenses. These expenses represent

activities undertaken by the affiliated importer. Because the expenses

deducted under section 772(d) represent selling activities in the

United States, the deduction of these expenses normally yields a

different level of trade for the CEP than for the later resale (which

we use for the starting price). Movement charges, duties, and taxes

deducted under section 772(c) do not represent activities of the

affiliated importer, and we do not remove them to obtain the CEP level

of trade.

To determine whether home market sales are at a different level of

trade than U.S. sales, we examine whether the home market sales are at

different stages in the marketing process than the U.S. sales. The

marketing process in both markets begins with goods being sold by the

producer and extends to the sale to the final user. The chain of

distribution between the producer and the final user may have many or

few links, and each respondent's sales occur somewhere along this

chain. In the United States, the respondent's sales are generally to an

importer, whether independent or affiliated. We review and compare the

distribution systems in the home market and the United States,

including selling functions, class of customer, and the extent and

level of selling expenses for each claimed level of trade. Customer

categories such as distributor, retailers or end-users are commonly

used by respondents to describe levels of trade, but, without

substantiation, they are insufficient to establish that a claimed level

of trade is valid. An analysis of the chain of distribution and of the

selling functions substantiates or invalidates the claimed levels of

trade. If the claimed levels are different, the selling functions

performed in selling to each level should also be different.

Conversely, if levels of trade are nominally the same, the selling

functions performed should also be the same. Different levels of trade

necessarily involve differences in selling functions, but differences

in selling functions, even substantial ones, are not alone sufficient

to establish a difference in the levels of trade. Differences in levels

of trade are characterized by purchasers at different stages of

marketing or their equivalent which, in this case, are the different

stages in the chain of distribution and sellers performing

qualitatively different functions in selling to them.

When we compare U.S. sales to home market sales at a different

level of trade, we make a level-of-trade adjustment if the difference

in level of trade affects price comparability. We determine any

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effect on price comparability by examining sales at different levels of

trade in a single market, the home market; or the third-country market

used to calculate NV when the aggregate volume of sales in the home

market is less than five percent of the aggregate volume of U.S. sales.

Any price effect must be manifested in a pattern of consistent price

differences between home market (or third-country) sales used for

comparison and sales at the equivalent level of trade of the export

transaction. (See, e.g. Granular Polytetrafluorethylene Resin from

Italy; Preliminary Results of Antidumping Duty Administrative Review,

62 Fed. Reg. 26283, 26285 (May 13, 1997); Cement from Mexico, at

17148.) To quantify the price differences, we calculate the difference

in the average of the net prices of the same models sold at different

levels of trade. We use the average percentage difference between these

net prices to adjust NV when the level of trade of NV is different from

that of the export sale. If there is a pattern of no price differences,

then the difference in level of trade does not have a price effect and,

therefore, no adjustment is necessary.

Section 773 of the statute also provides for an adjustment to NV

when NV is based on a level of trade different from that of the CEP if

the NV is more remote from the factory than the CEP and we are unable

to determine whether the difference in levels of trade between CEP and

NV affects the comparability of their prices. This latter situation

might occur when there is no home market (or third-country) level of

trade equivalent to the U.S. sales level or where there is an

equivalent home market (or third-country) level but the data are

insufficient to support a conclusion on price effect (See e.g., Certain

Corrosion Resistant Carbon Steel Flat Products and Cut-to-Length Carbon

Steel Plate from Canada Final Results of Antidumping Duty

Administrative Reviews Fed. Reg. 18448, 18466 (April 15, 1997)). This

adjustment, the CEP offset, is identified in section 773(a)(7)(B) and

is the lower of the following:

*The indirect selling expenses of the home market (or third-

country) sale.

*The indirect selling expenses deducted from the starting price

used to calculate CEP.

The CEP offset is not automatic each time we use CEP. (See

Mechanical Transfer Presses from Japan, Final Results of Antidumping

Administrative Review 62 Fed. Reg. 17148, 17156 (October 9, 1996). The

CEP offset is made only when the home market (or third country) sale is

more advanced than the level of trade of the U.S. CEP sale and there is

not an appropriate basis for determining whether there is an effect on

price comparability. (See e.g., Cement from Mexico, at 17156.)

We requested information concerning the selling functions

associated with each phase of marketing, or the equivalent, in each of

Uddeholm's and Avesta's markets. For Avesta, we determined that one

level of trade existed in the home market. Avesta offered the same

selling terms and conditions, and provided the same level of marketing

assistance, customer service, and technical service to each of its home

market customers. We also determined that one level of trade exists for

Uddeholm's third-country sales. Uddeholm offered the same level of

inventory maintenance, technical advice, and after sale servicing to

each of its Canadian customers.

On its EP sales, Uddeholm provided no inventory maintenance or

advertising, and a lesser degree of technical advice than it did on its

third-country sales. Uddeholm however, provided after-sales servicing,

and freight and delivery assistance on both its EP and third-country

sales. Accordingly, for purposes of this review, we determined that the

differences in selling functions between Uddeholm's EP and third-

country sales were not sufficiently large to constitute separate levels

of trade.

To determine whether Avesta and Uddeholm's CEP and NV sales were at

the same level of trade, we reviewed information submitted in their

questionnaire responses regarding selling functions and marketing

processes associated with both categories of sales.

The U.S. subsidiary's sales entailed selling functions such as

inventory maintenance, after sales servicing, technical advice,

advertising, freight and delivery arrangement, and warranties. Although

Avesta's sales in the home market and Uddeholm's sales in Canada were

made at a marketing stage similar to that in the U.S., and entailed

essentially the same selling functions as described above, we are using

the CEP methodology in making price comparisons. In determining the

level of trade for the U.S. sales, we only considered the selling

activities reflected in the price after making the appropriate

adjustments under section 772(d) of the Act. (See e.g., Certain

Stainless Wire Rods from France: Final Results of Antidumping

Administrative Review, (61 Fed. Reg. 47874, (September 11, 1996).

Based on a comparison of the home market (or third-country market)

and this CEP level of trade, we find significantly different levels of

selling functions. Further, based on the distribution phase at which

the home market or third-country transaction takes place and the nature

of the selling functions they entail, we find the home market sales of

Avesta and the third-country sales of Uddeholm to be at a different

level of trade from and more remote from the factory than the CEP

sales.

As explained above, all of Uddeholm's third country sales, and

Avesta's home market sales, were at a single level of trade which is

different from the CEP level of trade. Section 773(a)(7)(A) of the Act

directs us to make an adjustment for differences in levels of trade

where such differences affect price comparability. However, we were

unable to quantify such price differences from information on the

record. As indicated above, in accordance with section 773(a)(7)(B) of

the Act, a CEP offset is warranted where normal value is established at

a level of trade which constitutes a more advanced stage of

distribution (or the equivalent) than the level of trade of the CEP

sale and the data available do not provide an appropriate basis to

determine a level of trade adjustment. Because we have determined that

the home market or third-country level of trade is more remote from the

factory than the CEP level of trade but the data necessary to calculate

the level of trade adjustment are unavailable, we made a CEP offset

pursuant to section 773(a)(7)(B) of the Act.

Sales Comparisons

To determine whether sales of stainless steel plate in the United

States were made at less than NV, we compared USP to the NV, as

described in the ``United States Price'' and ``Normal Value'' sections

of this notice. In accordance with section 777(A) of the Act, we

calculated monthly weighted-average prices for NV and compared these to

individual U.S. transactions.

Preliminary Results of Review

We preliminarily determine that the following margins exist for the

period June 1, 1995 through May 31, 1996:

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

Margin

Company (percent)

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

Avesta..................................................... 33.91

Uddeholm................................................... 4.57

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

Parties to this proceeding may request disclosure within five days

of publication of this notice and any interested party may request a

hearing within 10 days of publication. Any hearing, if requested, will

be held 44

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days after the date of publication, or the first working day

thereafter. Interested parties may submit case briefs and/or written

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

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

such briefs or comments, may be filed no later than 37 days after the

date of publication. The Department will publish the final results of

this administrative review, which will include the results of its

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

within 120 days after the publication of this notice.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Because the inability to

link sales with specific entries prevents calculation of duties on an

entry-by-entry basis, we have calculated an importer specific ad

valorem duty assessment rate for the merchandise based on the ratio of

the total amount of antidumping duties calculated for the examined

sales made during the POR to the total customs value of the sales used

to calculate these duties. This rate will be assessed uniformly on all

entries of that particular importer made during the POR. (This is

equivalent to dividing the total amount of antidumping duties, which

are calculated by taking the difference between NV and U.S. Price, by

the total U.S. value of the sales compared, and adjusting the result by

the average difference between U.S. price and customs value for all

merchandise examined during the POR.) The Department will issue

appraisement instructions directly to Customs. The final results of

this review shall be the basis for the assessment of antidumping duties

on entries of merchandise covered by the determination and for future

deposits of estimated duties.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of these administrative reviews

for all shipments of stainless steel plate from Sweden entered, or

withdrawn from warehouse, for consumption on or after the publication

date of the final results of these administrative reviews, as provided

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

firms will be the rate established in the final results of

administrative review, except if the rate is less than 0.50 percent,

and therefore, de minimis within the meaning of 19 CFR 353.6, in which

case the cash deposit rate will be zero; (2) for merchandise exported

by manufacturers or exporters not covered in this review but covered in

the original less-than-fair-value (LTFV) investigation or a previous

review, the cash deposit will continue to be the most recent rate

published in the final determination or final results for which the

manufacturer or exporter received a company-specific rate; (3) if the

exporter is not a firm covered in this review, or the original

investigation, but the manufacturer is, the cash deposit rate will be

that established for the manufacturer of the merchandise in the final

results of these reviews, or the LTFV investigation; and (4) if neither

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

previous review or the original fair value investigation, the cash

deposit rate will be 4.46%.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26(b) to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during these review periods. 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 Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: June 30, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-17725 Filed 7-7-97; 8:45 am]

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