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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-401-040]

Stainless Steel Plate From Sweden: Notice of 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 manufacturer/exporters of the subject merchandise to

the United States, Avesta Sheffield AB (``Avesta'') and Uddeholm

Tooling AB and its sales subsidiaries (collectively, ``Uddeholm'').

Uddeholm's sales affiliate in the United States is Bohler-Uddeholm

Corporation (``BUS'') and its sales affiliate in Canada is Uddeholm

Limited, Canada (``BCA''). The period of review is June 1, 1997 through

May 31, 1998. 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

constructed export price (``CEP'') 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

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issue, and (2) a brief summary of the argument (no longer than five

pages, including footnotes).

EFFECTIVE DATE: July 7, 1999.

FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan or Jonathan Lyons,

Import Administration, International Trade Administration, U.S.

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

Washington, D.C. 20230; telephone (202) 482-4243 or 482-0374,

respectively.

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). The

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

Administrative Review'' of the antidumping finding for the 1997-1998

review period on June 10, 1998 (63 FR 31717). On June 10, 1998, the

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

Lukens, Inc., filed a request for review of Uddeholm and Avesta. We

initiated the review on July 28, 1998 (63 FR 40258). On October 8,

1998, December 1, 1998, February 22, 1999, and April 12, 1999, we

received responses from Uddeholm to the Department's original and

supplemental questionnaires.

The review covers the period June 1, 1997 through May 31, 1998. The

Department is conducting this review in accordance with section 751 of

the Act, as amended. Section 751(a)(3) provides that the Department may

extend the deadline for issuing its preliminary results of an

administrative review if it determines that it is not practicable to

complete the preliminary results within the statutory time limit of 245

days. See also 19 CFR 351.213(h)(2). On January 11, 1999, the

Department extended the time limit for these preliminary results to

June 30, 1999. See Stainless Steel Plate from Sweden; Extension of Time

Limits for Antidumping Duty Administrative Review, 64 FR 3683 (January

25, 1999).

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.

Facts Available

On September 2, 1998, Avesta informed the Department that it was

unable to participate in the 1997-1998 administrative review. Avesta

claimed that, because a key facility had closed and staff that had

participated in prior reviews were no longer employed by the company,

it would not be ``feasible, financially or practically,'' for the

company to participate.

Section 776(a)(2)(A) of the statute and 19 CFR 351.308 mandate use

of facts available in several circumstances, including when a

respondent withholds requested information. Further, section 776(b) of

the Act authorizes the Department to use an adverse inference in

selecting from the facts otherwise available where the respondent has

``not acted to the best of its ability to comply with a request for

information.''

Because Avesta has declined to respond to the Department's

questionnaire, we must rely on the facts otherwise available. Further,

the Department finds that an adverse inference is warranted because

Avesta has not acted to the best of its ability in responding to the

Department's request for information. Avesta failed to provide any

explanation as to why the loss of employees or the closing of a

facility prevents its responding to the Department's questionnaire.

Moreover, Avesta failed to identify specific problems in complying with

our request, to seek the Department's assistance or to suggest

alternatives that would allow the Department to collect the necessary

information, as required by section 782(c)(1). Rather, the company

appears to have made a business decision not to devote the necessary

resources to provide the Department with the information needed to

conduct the review.

Section 776(b) of the Act authorizes the Department to use as

adverse facts available information derived from the petition, the

final determination, a previous administrative review, or other

information placed on the record. In accordance with section 776(b)(3)

of the Act, we have selected as facts available the highest previous

margin in this case from segments conducted by the Department, which is

Avesta's margin from the 1995-1996 administrative review.

Information from prior segments of the proceeding constitutes

secondary information. Section 776(c) of the Act provides that the

Department shall, to the extent practicable, corroborate secondary

information from independent sources reasonably at its disposal. The

Statement of Administrative Action (SAA) explains that ``corroborate''

means simply that the Department will satisfy itself that the secondary

information to be used has probative value. (See H.R. Doc. 316, Vol. 1,

103d Cong., 2d sess. 870 (1994).)

To corroborate secondary information, the Department will, to the

extent practicable, examine the reliability and relevance of the

information to be used. However, unlike other types of information,

such as input costs or selling expenses, there are no independent

sources for calculated dumping margins. The only source for margins is

administrative determinations. Thus, in an administrative review, if

the Department chooses as total adverse facts available a calculated

dumping margin from a prior segment of the proceeding, it is not

necessary to question the reliability of the margin for that time

period. With respect to the relevance aspect of corroboration, however,

the Department will consider information reasonably at its disposal as

to whether there are circumstances that would render a margin not

relevant. Where circumstances indicate that the selected margin is not

appropriate as adverse facts available, the Department will disregard

the margin and determine an appropriate margin (see Fresh Cut Flowers

from Mexico; Final Results of Antidumping Duty Administrative Review,

61 FR 6812 (February 22, 1996), where the Department disregarded the

highest margin as adverse BIA because the margin was based on another

company's uncharacteristic business expense resulting in an unusually

high margin).

The dumping margin we have selected for Avesta as facts available

in this review is a rate calculated in a prior

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segment of the proceeding; therefore, we deem it to be reliable.

Moreover, because the margin selected was actually calculated for

Avesta based on information submitted by the company in the prior

review, we deem it to be relevant. Therefore, the requirements of

section 776(c) of the Act have been met.

Because we have based Avesta's dumping margin entirely on facts

available, the analysis below addresses only sales made by Uddeholm.

Verification

As provided in section 782(i) of the Act, we verified information

provided by Uddeholm using standard verification procedures, including

on-site examination of relevant sales and financial records and

selection of original documentation containing relevant information.

Our verification results are outlined in the proprietary and public

versions of the verification report.

Date of Sale

For both its third-country market and U.S. sales, Uddeholm reported

the earlier of either the date of invoice or the date of shipment as

the date of sale. Uddeholm stated that this methodology best reflects

the date on which the material terms of sale are established. In the

normal course of business, invoices are issued upon shipment of

merchandise to the customer. In rare instances, merchandise is shipped

prior to invoicing. Invoices on these shipments are issued on the next

business day. Due to the unique nature of the subject merchandise and

its applications, orders for merchandise are processed and shipped

within a week of the customer's order, and in many instances within 1-2

business days. Orders are primarily placed via phone or fax to the

sales departments, and usually result in Uddeholm's generating a work

order for their merchandise processing and operations division. Most

orders are immediately filled from inventory and sized to the

customer's specifications. Uddeholm records the terms of sale (price

and quantity) when the merchandise is shipped and the invoice is

issued, which generally occurs on the same day. In addition, the

Department verified that there are no sales contracts, long-term

orders, or extended delivery agreements between Uddeholm and its

customers. Therefore, we preliminarily determine that invoice date is

the most appropriate date of sale in accordance with Sec. 351.401(i) of

the Department's regulations.

Product Comparisons

In accordance with section 771(16) of the Act, all products

produced by the respondents, covered by the description in the Scope of

Investigation section, above, and sold in Canada during the period of

review (POR) are considered to be foreign like products for purposes of

determining appropriate product comparisons to U.S. sales. We have

relied on five characteristics to match U.S. sales of subject

merchandise to comparison market sales of the foreign like product:

specification, process, thickness, finish, and form. We used thickness

ranges reported by the respondent, as requested by the Department.

Where there were no sales of identical merchandise in the third-country

market to compare to U.S. sales, we compared U.S. sales to the next

most similar foreign like product on the basis of the characteristics

listed in the antidumping questionnaire and reporting instructions.

Fair Value Comparisons

To determine whether sales of stainless steel plate from Sweden to

the United States were made at less than normal value, we compared NV

to the CEP, as described in the ``Constructed Export Price'' and

``Normal Value'' sections of this notice.

Constructed Export Price (CEP)

In accordance with section 772 (b) of the Act, we treated all of

Uddeholm's sales to the United States as CEP sales because the

merchandise was first sold to unaffiliated U.S. purchasers, 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 packed ex-warehouse or delivered price to

unaffiliated customers in the United States. In accordance with section

772 (c)(2) of the Act, we made adjustments, where applicable, for

international and ocean freight, U.S. inland freight, U.S. brokerage

and handling expenses, U.S. customs duties, early payment discounts,

rebates, warehousing, and marine insurance. In accordance with sections

772(d)(1) and (2) of the Act, we made deductions for selling expenses,

warranty expenses, credit expenses, and cutting and grinding expenses.

To arrive at the CEP, the gross unit price was further reduced by

an amount for profit pursuant to section 772(d)(3) of the Act. In

accordance with section 772 (f) of the Act, we computed profit based on

total revenues realized on sales in both the U.S. and third-country

markets, less all expenses associated with those sales. We then

allocated profit to the expenses deducted under sections 772(d)(1) and

(2), based on the ratio of total U.S. expenses to total expenses for

both the U.S. and third-country markets.

Normal Value

A. Home Market Viability

In order to determine whether there were sufficient sales of

stainless steel plate in the home market 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. Since

Uddeholm's aggregate volume of home market sales was less than five

percent of its U.S. sales of the subject merchandise, we did not base

NV for Uddeholm on its home market sales.

B. Comparison Market Selection

In selecting the appropriate third-country market on which to base

NV for Uddeholm, we analyzed sales to Uddeholm's three largest third-

country markets. In accordance with Sec. 351.404(e) of the Department's

regulations, we chose the Canadian market as the most appropriate

comparison market for NV. Canada constituted Uddeholm's largest third-

country market, and merchandise sold in the Canadian market was

identical to the subject merchandise sold in the United States. For a

more detailed discussion of third-country market selection, see

Analysis Memorandum for 3rd Country Comparison Market, dated May 28,

1999.

We calculated NV based on sales to unaffiliated third-country

market customers. We made adjustments for physical differences in the

merchandise, where necessary, in accordance with section

773(a)(6)(C)(ii) of the Act. In accordance with section

773(a)(6)(B)(ii) of the Act, we made adjustments to NV for

international freight, third-country inland freight, third-country

inland insurance, third-country customs duties, and warehousing

expenses. We also adjusted NV for direct selling expenses, including

imputed credit expenses, in accordance with section 773(a)(6)(C)(iii)

of the Act. Finally, we made an adjustment to NV for early payment

discounts, in accordance with Sec. 351.401(c) of the Department's

regulations.

Price-to-Price Comparisons

We performed price-to-price comparisons where there were sales of

comparable merchandise in the third-country market.

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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.

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).

The Department requested information concerning the selling

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

in Uddeholm's Canadian and U.S. markets. The NV level of trade is based

on sales by Uddeholm's affiliate, BCA, to unaffiliated customers in

Canada. The information submitted by Uddeholm indicates that BCA

performs the same selling functions for all customers in the Canadian

market. Therefore, we preliminarily determine that the Canadian sales

were made at a single level of trade. The CEP level of trade is based

on the constructed sales to Uddeholm's affiliate, BUS, i.e., after the

deductions required under 772(d) of the Act. The information submitted

indicates that at the CEP level of trade Uddeholm performs fewer and

different selling functions than it does at the NV level of trade.

Therefore, we preliminarily determine that there is a single level of

trade in the United States--the CEP level of trade--which is different

from the level of trade in Canada. For a more detailed discussion of

level of trade see Analysis Memorandum to the File regarding Level of

Trade for Uddeholm, dated June 22, 1999.

As evidenced by the record, the U.S. and Canadian sales are at

different levels of trade and the Canadian level of trade--sales by an

affiliated distributor--is at a more advanced stage of distribution

than the U.S. CEP level of trade--sales by the producer to an

affiliated distributor. However, we do not have data available that

would be an appropriate basis for calculation of a level of trade

adjustment. Therefore, in accordance with section 773(a)(7)(B) of the

Act, we have preliminarily determined to make a CEP offset.

Currency Conversion

We made currency conversions into U.S. dollars in accordance with

section 773A(a) of the Act based on the exchange rates in effect on the

dates of the U.S. sales, as certified by the Federal Reserve Bank.

Preliminary Results of Review

We preliminarily determine that the following margins exist for the

period June 1, 1997 through May 31, 1998:

Uddeholm--7.30 percent

Avesta--29.36 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 30 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. In accordance with

Sec. 351.212(b) of the Department's regulations, 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 rates 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 351.106, 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, a previous review,

or the original investigation, but the manufacturer is, the cash

deposit rate will be that 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 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 351.402(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

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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 29, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-17222 Filed 7-6-99; 8:45 am]

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