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

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URL: https://www.frixlaw.com/law-library/documents/fr%3A97-17725

## Record

- **Collection:** Federal Register
- **Document type:** Notice
- **Published:** July 8, 1997
- **Citation:** 62 FR 36495

## Text

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.

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

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

[[Page 36496]]

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

[[Page 36497]]

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

[[Page 36498]]

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]
BILLING CODE 3510-DS-M

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-17725. Public record. Not legal advice.