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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-401-040]

Stainless Steel Plate From Sweden: Final Results of Antidumping

Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative

Review.

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SUMMARY: On July 8, 1998, the Department of Commerce (The Department)

published the preliminary results of review in the antidumping duty

administrative review on stainless steel plate from Sweden. (63 FR

36877). The review covers two manufacturers/ exporters (Avesta

Sheffield AB (Avesta) and Uddeholm Tooling AB, Bohler-Uddeholm

Corporation and Uddeholm Limited (collectively Uddeholm)) of the

subject merchandise to the United States and the period June 1, 1996

through May 31, 1997.

EFFECTIVE DATE: November 16, 1998.

FOR FURTHER INFORMATION CONTACT: John Totaro or Nithya Nagarajan,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, NW,

Washington, DC 20230; telephone (202) 482-3793.

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 (1998).

Background

The Department of the Treasury published an antidumping finding on

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

July 8, 1998, the Department published in the Federal Register the

preliminary results of antidumping duty administrative review of this

antidumping finding (63 FR 36877) for the period June 1, 1996 through

May 31, 1997. The Department has now completed this review in

accordance with section 751(a) of the Act.

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 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.

Analysis of Comments Received

We invited interested parties to comment on the preliminary results

of

[[Page 63707]]

this administrative review. We received timely comments from Uddeholm

and Avesta. We received timely rebuttal comments from petitioners,

Allegheny Ludlum Steel Corp., G.O. Carlson, Inc., and Lukens, Inc.

Avesta

Comment 1: Avesta argues that the Department should establish the

CEP profit ratio based on Avesta's consolidated annual financial

statement. Respondent argues that the Department based the CEP profit

ratio on the financial statements of Avesta Sheffield, NAD, Inc. (the

North American Division) rather than the consolidated financial

statements of the whole company. Avesta argues that section 772(d)(3)

requires the Department to adjust CEP for an amount of profit allocable

to U.S. sales and that the Department's practice has been to base this

calculated profit on revenues and expenses associated with total sales

of subject merchandise (both in the home market and in the United

States). In addition, Avesta argues that under section 772(f)(2)(C),

the Department has three alternatives for calculating CEP profit

including relying on the respondent company's financial reports

covering the production and sales of merchandise in all countries, and

that in this case the only information available to the Department is

the financial report for the consolidated company which indicates that

Avesta incurred a loss during the period of review (POR). Therefore,

respondent urges the Department to set the CEP profit ratio to zero.

Petitioners did not object to Avesta's comment.

Department's Position: The Department agrees with Avesta.

Consistent with the provisions of sections 772(d)(3) and 772(f)(2)(C)

of the Act, as amended, the Department is applying a CEP profit ratio

of zero on all sales made in the United States due to the fact that

Avesta incurred a loss during the POR.

Comment 2: Avesta argues that the Department should recalculate CEP

profit applying the profit ratio only to U.S. selling expenses related

to economic activities in the United States, excluding foreign and U.S.

movement charges as well as indirect selling expenses and inventory

carrying costs incurred in Sweden. Respondent argues that the

Department incorrectly applied the profit ratio to foreign movement

charges, U.S. movement charges, indirect selling expenses incurred in

Sweden, and imputed inventory carrying costs incurred in Sweden prior

to export to the U.S. Respondent argues that movement expenses are not

classified as selling expenses within the meaning of section 772(d) of

the Act, and therefore should not be included in the CEP profit

calculation. In addition, Avesta argues that the expenses associated

with economic activity in the U.S. do not include those indirect

selling expenses and inventory costs incurred in the home market prior

to exportation, and therefore the CEP profit ratio should not be

applied to the expenses in calculating total CEP profit.

Petitioners offered no objections to respondent's comments.

Department's Position: The Department agrees in part with

respondent. Both the SAA, at 823, and the Department's regulations, at

19 CFR 351.402(b), explain that, under section 772(d) of the Act, we

only deduct from CEP the expenses associated with commercial activity

in the United States which relate to the resale to an unaffiliated

purchaser. See also, Antifriction Bearings (Other than Tapered Roller

Bearings) and Parts Thereof From France, Germany, Italy, Japan,

Romania, Singapore, Sweden and the United Kingdom; Final Results of

Antidumping Duty Administrative Reviews, 63 FR 33320, 33344 (June 18,

1998). The movement expenses and imputed expenses at issue are, by

definition, not associated with economic activities in the United

States, movement expenses have been deducted from CEP and, therefore,

should not be included in ``total United States expenses'' for purposes

of calculating the CEP profit ratio. These expenses are associated with

the sale of the merchandise to the affiliated reseller. However,

``total United States expenses'' includes all selling expenses (direct

and indirect) associated with the unaffiliated sale in the United

States. Therefore, consistent with the Department's methodology, we

have calculated total actual profit using total U.S. selling expenses,

deducted from the U.S. starting price as directed by Section 772(d)(1)

of the Act. See, e.g., Small Diameter Circular Seamless Carbon and

Alloy Steel Standard Line and Pressure Pipe From Germany; Final Results

of Antidumping Duty Administrative Review, 63 FR 13217 (March 18,

1998). For purposes of these final results of review, we have not

included inventory carrying costs (DINVCARU) or U.S. movement expenses

in total U.S. expenses as these expenses were not deducted from CEP.

However, we have included in total U.S. expenses all selling expenses

incurred in making the sale to the U.S. unaffiliated customer.

Comment 3: Avesta states that the Department erred by deducting the

cost of brokerage and handling at the U.S. port of entry (USOTRE1U)

twice in the calculation of net price. Petitioners have not objected to

Avesta's requested correction.

Department's Position: We agree with Avesta and have adjusted the

final margin calculation program to adjust for USOTRE1U only once.

Comment 4: Avesta contends that the Department erred in the

preliminary results of review by matching U.S. sales of CONNUMU

2422151, 2423121, and 2423151 with home market sales of CONNUMH 2323152

rather than CONNUMH 2623152. Respondent states that CONNUMU 2422151,

2423121, and 2423151 are all heat resistant steels. Similarly,

respondent argues that CONNUMH 2623152 and 2622152 are also a heat

resistant steels whereas CONNUMH 2323152 is a ``general service and wet

corrosion'' steel that has a different purpose and use than heat

resistance steels and is therefore not comparable to the U.S. CONNUMs.

Based on the chemical differences and uses of the home market CONNUMs,

respondent urges the Department to compare CONNUMU 2422151, 2423121 to

home market CONNUM 2622152, and U.S. CONNUM 2423151 to home market

CONNUM 2623152.

Petitioner objected to the information in Avesta's case brief

discussing the chemical and physical specifications of the home market

and U.S. CONNUMs as new factual information. However, petitioner did

not offer any objection to the proposed changes in the matching

methodology utilized in the preliminary results of review.

Department's Position: We agree with respondent. The Department

incorrectly matched CONNUMU 2422151, 2423121, and 2423151 with CONNUMH

2323152. For purposes of the final results of review, the Department

has compared U.S. CONNUMs 2422151, 2423121 to home market CONNUM

2622152, and U.S. CONNUM 2423151 to home market CONNUM 2623152 due to

the fact that these are the most similar products based on product

specifications. In response to petitioner's comment, the Department has

determined that Avesta's submission in its case brief does not

constitute new factual information under Sec. 351.301 of the

Department's regulations. Consistent with the Department's request in

the original questionnaire, Avesta provided detailed product

specification and concordance information in its October 8, 1997,

section A response in Exhibits A-36 and A-37. In conclusion, the

Department is comparing the above

[[Page 63708]]

mentioned U.S. CONNUMs to home market CONNUMs 2622152 and 2623152.

Uddeholm

Comment 5: Uddeholm contends that the Department did not deduct

further manufacturing expenses in its calculation of CEP and normal

value. Uddeholm argues that it reported cutting and grinding expenses

incurred in connection with its sales in the United States and Canada

as further manufacturing expenses, but inconsistent with section

772(d)(2) of the Act, the Department did not adjust for these expenses

in calculating CEP. Uddeholm also points out that the Department did

adjust for further manufacturing expenses reported by the other

respondent in the case, Avesta, but failed to make the same adjustment

on Uddeholm sales. Further, Uddeholm contends that the Department

should make a similar adjustment to normal value as a circumstance of

sale adjustment as instructed by the statute.

Petitioners argue that the expenses Uddeholm reported as ``cutting

and grinding expenses'' in fact included expenses both for cutting and

grinding and for two other processing operations, milling and slitting.

As such, petitioners allege that the ``cutting and grinding expenses''

reported by respondent are overly broad for purposes of utilizing these

expenses as adjustments to U.S. price and normal value. In addition,

petitioners argue that Uddeholm's Canadian customers were charged

separately for cutting and grinding expenses, whereas only 50 percent

of U.S. customers were charged separately for these same expenses.

Petitioners therefore contend that Uddeholm's difference in pricing

methodology is an indication that cutting and grinding costs were

``bundled'' with the end price and are distortive of actual U.S. price

as these expenses were not recovered. Petitioners argue that the only

accurate means of determining the true further manufacturing cost of

cutting and grinding would be to create two sets of sales one where the

customer was charged separately for these expenses and one where no

charges were assessed. Absent this separation, petitioners argue that

there is insufficient record evidence to warrant allowing adjustments

for further manufacturing from U.S. price and normal value.

Department's Position: Pursuant to Sec. 351.402 of its regulations,

the Department adjusts U.S. price for expenses associated with

commercial activities in the United States that relate to the sale to

an unaffiliated purchaser. The Department will not make an adjustment

for expenses related solely to the sale to an affiliated importer.

Similarly, under Sec. 351.410 of the Department's regulations, the

Department is authorized to make circumstance of sale adjustments to

normal value for differences in direct selling expenses. Direct selling

expenses are defined as expenses such as commissions, credit expenses,

guarantees, and warranties, that result from and bear a direct

relationship to the particular sale in question. In the instant review,

the cutting and grinding expenses incurred by Uddeholm in the U.S.

market are expenses associated with economic activity in the United

States and are properly deducted from CEP. However, the cutting and

grinding expenses incurred in the comparison market are not direct

selling expenses as defined in Sec. 351.410 and have therefore not been

deducted from normal value.

In response to petitioner's concern, the Department has reviewed

the record to determine the manner in which cutting and grinding

expenses are incurred and/or charged to the unaffiliated customer in

both the U.S. and comparison markets. Upon review of the record the

Department has determined that there is no evidence to indicate that

Uddeholm's U.S. cutting and grinding costs are bundled with the U.S.

end price, nor is there evidence to indicate that there is a dual

pricing structure where cutting and grinding expenses are charged to

customers in the comparison market and only charged 50 percent of the

time to U.S. customers. The evidence on the record merely indicates

that cutting and grinding expenses are incurred in both the U.S. market

and the comparison market on sales to unaffiliated customers and these

expenses are reported as a price adjustment. Therefore, for purposes of

these final results of review, the Department is adjusting Uddeholm's

U.S. price for the reported cutting and grinding expenses but is not

applying a circumstance of sale adjustment to normal value for similar

expenses incurred in the comparison market. This is consistent with the

Department's treatment of Avesta's reported cutting and grinding

expenses in both the preliminary and final results of review.

Comment 6: Uddeholm states that the Department did not compare U.S.

sales to the weighted-average normal values for the calendar month in

which the U.S. sale occurred. Respondent contends that the Department

should have matched sales within the most contemporaneous month (e.g.,

June 1996 to June 1996). However, the margin program has compared all

U.S. sales to the weighted average normal value for June 1996 which is

an error which should be corrected. Petitioners offered no objections

to respondent's argument.

Department's Position: The Department has reviewed the margin

program and has corrected this error for the final results of review.

Comment 7: Uddeholm states that the Department did not use

contemporaneous weighted-average third country indirect expenses to

calculate the CEP offset. Based upon an analysis of the margin program

discussed in Comment 6, above, respondent argues that the CEP offset

calculated for June 1996 was used for all CEP sales during the POR.

Petitioners did not rebut respondent's argument.

Department's Position: The Department has reviewed the margin

program and has corrected this error for the final results of review.

Comment 8: Uddeholm notes that the Department used the incorrect

profit ratio to calculate CEP profit. The Department's analysis memo

indicates that the calculated CEP profit ratio was the result of total

operating profit divided by total actual expenses. However, in

transcribing the result to the margin calculation program the

Department used the incorrect number. Petitioners did not rebut

respondent's requested change.

Department's Position: The Department agrees with respondent and

has corrected the final margin calculation program consistent with

respondent's comment.

Final Results of Review

As a result of this review, we have determined that the following

margins exist for the period June 1, 1996, through May 31, 1997:

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Margin

Company percentage

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Avesta Sheffield AB......................................... 25.05

Uddeholm Corporation........................................ 9.47

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The Department shall determine, and the U. S. Customs Service shall

assess, antidumping duties on all appropriate entries. The Department

shall issue appraisement instructions directly to the Customs Service.

For assessment purposes, we have calculated importer-specific duty

assessment rates for the merchandise based on the ratio of the total

amount of antidumping duties calculated for the examined sales during

the POR to the total entered value of sales examined during the POR.

Individual differences between U.S.

[[Page 63709]]

price and normal value may vary from the percentages stated above.

Furthermore, the following deposit requirements shall be effective

upon publication of this notice of final results of review for all

shipments of stainless steel plate from Sweden entered, or withdrawn

from warehouse, for consumption on or after the publication date, as

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

for the reviewed companies will be the rates stated above; (2) for

previously investigated or reviewed 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 these reviews, or the original LTFV investigations, 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 these

reviews, the cash deposit rate for this case will continue to be 4.46

percent, which was the ``all others'' rate in the LTFV investigation.

The deposit requirements, when imposed, shall remain in effect until

publication of the final results of the next administrative review.

This notice serves as a final 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 Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective order (``APO'') of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with Sec. 353.34(d) of the Department's regulations.

Timely notification of return/destruction of APO materials or

conversion to judicial protective order is hereby requested. Failure to

comply with the regulations and the terms of an APO is a sanctionable

violation.

This administrative review and notice are in accordance with

sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and

1677f(i)(1)).

Dated: November 5, 1998.

Holly A. Kuga,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-30566 Filed 11-13-98; 8:45 am]

BILLING CODE 3510-DS-P