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, 1996 through May 31, 1997. We

preliminarily determine that sales have been made below normal value

(``NV''). If these preliminary results are adopted in our final results

of administrative review, we will instruct U.S. Customs to assess

antidumping duties based on the difference between export price

(``EP'') and NV.

Interested parties are invited to comment on these preliminary

results. Parties which 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, 1998.

FOR FURTHER INFORMATION CONTACT: Heather Osborne or John Kugelman,

Import Administration, International Trade Administration, U.S.

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

Washington, D.C. 20230; telephone (202) 482-3019 (Osborne), 482-0649

(Kugelman).

SUPPLEMENTARY INFORMATION:

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 citations to the Department's regulations are

references to the provisions codified at 19 CFR Part 351 (62 FR 27296,

May 19, 1997).

Background

The Department of the Treasury published an antidumping finding on

stainless steel plate from Sweden on June 8, 1973 (38 FR 15079). The

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

Administrative Review'' of the antidumping finding for the 1996/1997

review period on June 11, 1997 (62 FR 31786). On June 28, 1997, 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 1, 1997 (62 FR 41339).

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,

1209.12.00.15, 7219.12.00.45, 7219.12.00.65, 7219.12.00.70,

7219.12.00.80, 8219.21.00.05, 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 subheadings are provided for convenience and customs

purposes, the written description of the merchandise is dispositive.

On November 21, 1997, Avesta and Avesta Sheffield NAD, Inc.

requested clarification to determine whether stainless steel slabs that

are manufactured in Great Britain and rolled into hot bands in Sweden

are within the scope of the antidumping finding. On December 22, 1997,

the Department determined that British slabs rolled into hot bands in

Sweden are within the scope of the finding. The review covers the

period June 1, 1996 through May 31, 1997. The Department is conducting

this review in accordance within section 751 of the Act, as amended.

The Department may extend the deadline for completion of an

administrative review if it determines that it is not practicable to

complete the review within the statutory time limit of 365 days. (See

19 C.F.R. 351.2139(g)(2).) On February 24, 1998, the Department

extended the time limit for these preliminary results to June 30, 1998.

See Stainless Steel Plate from Sweden; Extension of Time Limits for

Antidumping Duty Administrative Review (63 FR 10590, March 4, 1998).

United States Price (USP)

In calculating USP, the Department treated sales as constructed

export price (CEP) sales, as defined in section 772(b) of the Act,

because the merchandise was first sold to unaffiliated U.S. purchasers,

before or after importation, by an affiliated seller in the United

states. There were no export price sales during the period of review.

We based CEP on the delivered price to unaffiliated 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 United

States 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. To arrive at the CEP, the gross unit price was further

reduced for both Avesta and Uddeholm by an amount for profit pursuant

to section 772(d)(3) of the Act.

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 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

[[Page 36878]]

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, on the other hand, was less than five percent of its U.S.

sales of the subject merchandise. Therefore, we did not base NV for

Uddeholm in its HM sales. Rather, because Canada constituted Uddeholm's

largest third-country market, we based NV for Uddeholm on sales to that

market.

Avesta made HM 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 of more of

prices to unaffiliated distributors). When prices to an affiliated

distributor were, on average, less than 99.5 percent of the price to

unaffiliated distributors, we excluded those sales to affiliated

distributors from our calculation of NV. 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. See

e.g., Certain Stainless Steel Wire Rods from France: Final Results of

Antidumping Duty Administrative Review (63 FR 30185, June 3, 1998).

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

quantity discounts, distributor discounts, credit expenses, and

warranties.

For Uddeholm we made adjustments to NV for international freight,

third-country inland freight, third-country inland insurance, third-

country customs duties, early payment discounts, warehousing expenses,

and credit expenses.

Level of Trade

In accordance with section 773(a)(7) of the Act, to the extent

practicable, we determine NV based on sales in the comparison market at

the same level of trade (LOT) as the EP or CEP transaction. The NV LOT

is that of the starting price sales in the comparison market or, when

NV is based on CV, that of the sales from which we derive selling,

general, and administrative (SG&A) expenses and profit. For EP sales,

the U.S. LOT is also the level of the starting-price sale, which is

usually from exporter to importer. For CEP sales, it is the level of

the constructed sale from the exporter to the importer.

To determine whether NV sales are at a different level of trade

than EP or CEP sales, we examine the stages in the marketing process

and selling functions along with the chain of distribution between the

producer and the unaffiliated customer. If the comparison-market sales

are at a different LOT, and the difference affects price comparability,

as manifested in a pattern of consistent price differences between the

sales on which NV is based and comparison-market sales at the LOT of

the export transaction, we make a LOT adjustment under section

773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is

more remote from the factory than the CEP level and there is no basis

for determining whether the difference in the levels between NV and CEP

affects price comparability, we adjust NV under section 773(a)(7)(B) of

the Act (the CEP offset provision). See Notice of Final Determination

of sales at Less Than Fair Value: Certain Cut-to Length Carbon Steel

Plate from South Africa, 62 FR 61731 (November 19, 1997).

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 LOT

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 all of its home market

customers. We also determined that one LOT exists for Uddeholm's third-

country sales. Uddeholm offered the same level of inventory

maintenance. technical advice, and after-sale servicing to all of its

Canadian customers.

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

the same LOT, we reviewed information submitted in their questionnaire

responses regarding selling functions and marketing processes

associated with both categories of sales.

The U.S. subsidiaries of both Uddeholm and Avesta performed selling

functions such as inventory maintenance, after-sales servicing,

technical advice, advertising, freight and delivery arrangement, and

warranties. Although Avesta's actual sales in the home market and

Uddeholm's actual sales in Canada were made at a marketing stage

similar to that in the United States, and entailed essentially the same

functions as described above, our comparison of LOTs does not include

these selling functions because, as explained above, we are using the

CEP methodology in making price comparisons. Thus, in determining the

LOT 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. (Sec, e.g., Certain Stainless Wire Rods from

France: Final Results of Antidumping Duty Administrative Review (61 FR

47874, September 11, 1996.)

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

and this CEP LOT, we find significantly different selling functions for

both Avesta and Uddeholm. Avesta's and Uddeholm's CEP sales involve no

sales administration beyond the processing of incoming production

orders, no forward warehousing, no marketing calls to customers, no

advertising or sales promotion, and no technical assistance or after-

sale warranty expenses. We therefore determine that Avesta's and

Uddeholm's CEP sales are at different LOTs than their respective home

market or third-country sales.

As stated above, section 773(a)(7)(B) of the Act directs us to make

an adjustment for differences in LOTs where such differences affect

price comparability. However, because there is only a single LOT in the

HM or third country market, we were unable to determine from

information on the record whether differences in LOTs affected price

comparability, Therefore, we did not make a LOT adjustment for Avesta

and Uddeholm. Next, we examined whether a CEP offset is warranted in

this case for Avesta and Uddeholm. As indicated above, in accordance

with Section 773(a)(7)(B) of the Act, a CEP offset is warranted where

NV is established at a LOT which constitutes a more advanced stage of

distribution (or the equivalent) than the LOT or the CEP sale and the

data available does not provide an appropriate basis to determine a LOT

adjustment. We made a CEP offset pursuant to Section 773(a)(7)(B) of

the Act because (1) we have determined that Avesta's and Uddeholm's

respective home market or third-country LOT is different from the CEP

LOT, but the data necessary to calculate the LOT adjustment is

unavailable, and (2) for each company, NV has been established at a LOT

which constitutes a more advanced state of distribution (or the

equivalent) than its CEP LOT.

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-

[[Page 36879]]

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, 1996 through May 31, 1997:

Avesta....................................................21.84 percent

Uddeholm..................................................11.17 percent

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 37 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 35 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 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 entered 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. 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 353.106, 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 353.402(f) 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 determination is issued in accordance with sections 751(a)(1)

and 777(i)(1) of the Act.

Dated: June 30, 1998.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-18113 Filed 7-7-98; 8:45 am]

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