Carbon Steel Wire Rope From Mexico: Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-806]

Carbon Steel Wire Rope From Mexico: 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 March 8, 1999, the Department of Commerce (the Department)

published in the Federal Register the preliminary results of its

antidumping duty administrative review of the antidumping duty order on

carbon steel wire rope from Mexico (64 FR 10979). This review covers

one manufacturer/exporter of the subject merchandise to the United

States, Aceros Camesa S.A. de C.V. (Camesa), and the period of March 1,

1997 through February 28, 1998. We gave interested parties an

opportunity to comment on the preliminary results of review. We

received comments from Camesa and from the Committee of Domestic Steel

Wire Rope and Specialty Cable

[[Page 40550]]

Manufacturers (the petitioner). We have not changed the results from

those presented in the preliminary results of review.

EFFECTIVE DATE: July 7, 1999.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Laurel LaCivita,

Import Administration, International Trade Administration, U.S.

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

Washington DC 20230; telephone (202) 482-0666, (202) 482-4236,

respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act. In addition, unless otherwise indicated,

all citations to the Department's regulations are to the provisions

codified at 19 CFR part 351 (April 1998).

Background

On March 8, 1999, the Department published in the Federal Register

the preliminary results of the review of the antidumping duty order on

carbon steel wire rope from Mexico (64 FR 10979). On April 7, 1999, we

received comments from the petitioner and Camesa. The petitioner and

Camesa submitted rebuttal comments on April 12, 1998.

The Department has now completed this antidumping duty

administrative review in accordance with section 751(b) of the Act.

Scope of Review

The product covered by this review is steel wire rope. Steel wire

rope encompasses ropes, cables, and cordage of carbon steel, other than

stranded wire, not fitted with fittings or made up into articles, and

not made up of brass-plated wire. Imports of these products are

currently classifiable under the following Harmonized Tariff Schedule

(HTS) subheadings: 7312.10.9030, 7312.10.9060, and 7312.10.9090.

Excluded from this review is stainless steel wire rope, which is

classifiable under HTS subheading 7312.10.6000, and all forms of

stranded wire, with the following exception.

In the final affirmative determination of circumvention of

antidumping duty order, 60 FR 10831 (February 28, 1995), the Department

determined that steel wire strand, when manufactured in Mexico by

Camesa and imported into the United States for use in the production of

steel wire rope, falls within the scope of the antidumping duty order

on steel wire rope from Mexico. Such merchandise is currently

classifiable under subheading 7312.10.3020 of the HTS.

Although HTS subheadings are provided for convenience and for

Customs purposes, our own written description of the scope of this

review remains dispositive.

This review covers one manufacturer/exporter, Camesa, and the

period March 1, 1997 through February 28, 1998.

Analysis of the Comments Received

We gave interested parties an opportunity to comment on the

preliminary results of review. We received case and rebuttal briefs

from both petitioner and Camesa.

Comment 1: Whether Camesa's Sales to the United States Constitute Bona

Fide Transactions

The petitioner contends that the timing and nature of Camesa's

sales to the United States during the period of review (POR) indicate

that they were not bona fide transactions. The petitioner claims that

the sales were contrived for the purpose of orchestrating an export

scheme to serve as the basis for an administrative review and

adjustment of the antidumping duty deposit requirement. Consequently,

the petitioner contends, the Department must disregard these sales and

determine that no proper basis existed for an administrative review of

the March 1, 1997 through February 28, 1998 period.

The petitioner argues that the circumstances of the sales indicate

that they were contrived for purposes of manipulating the Department's

antidumping analysis. In this regard, the petitioner points to the

small number of sales and the late date of the sales, occurring at the

end of the POR, as evidence that these sales were concocted by Camesa

solely for purposes of justifying an administrative review and

obtaining a zero margin.

The petitioner also contends that Camesa's one customer during the

POR was not sincerely interested in purchasing general purpose steel

wire rope from Camesa. According to the petitioner, Camesa's sole U.S.

purchaser during the POR had been, up until approximately one month

before the date of the U.S. sales, a purchaser of fishing ropes,

exclusively. Because these fishing ropes were entered in-bond for

subsequent export to foreign destinations, they were not subject to

review. The petitioner argues that the customer's sudden switch,

shortly before the end of the review period, to the general purpose

ropes subject to the current review is evidence that the sales were

contrived for the purpose of manipulating Camesa's dumping margin.

Finally, the petitioner contends that Department precedent equates

the term bona fide with commercially reasonable, and points to U.S.

Customs data to demonstrate that Camesa's sales were not made at

commercially reasonable prices. These customs figures indicate that,

for the month of Camesa's sales to the United States, the average price

of all goods falling under the tariff schedule subheading that includes

the products sold by Camesa during the POR is less than the prices

charged by Camesa.

Camesa contends that the petitioner has not provided any evidence

beyond its own speculation that the sales in question were not bona

fide. Camesa argues that the relatively small number and the late

timing of the sales to the United States during the POR were the result

of Camesa's difficulty in finding U.S. customers in the face of the

high cash deposit rate (111.68 percent) in effect during the POR for

imports of its steel wire rope products, not the result of an attempt

to manipulate the dumping margin.

Similarly, Camesa argues, there is no basis for questioning the

genuineness of Camesa's U.S. customer's need for steel wire rope. The

only evidence on the record regarding that customer's need for subject

merchandise suggests a legitimate business motivation.

Finally, Camesa has three responses to the customs figures

submitted by the petitioner. First, Camesa contends that petitioner's

submission was untimely, having been filed with the Department after

the deadline stipulated in 19 CFR 351.301(b)(2). Second, Camesa claims

that it is unreasonable to compare the prices of its products sold to

the United States with the average price of all imported products

falling within a tariff schedule subheading. Camesa claims that

products within this subheading vary greatly in important

characteristics that significantly affect price, and, as support,

Camesa demonstrates how the catalog prices for its own products falling

within this subheading vary greatly. Thus, argues Camesa, the average

price of all products within this subheading imported into the United

States will vary greatly according to the composition of the products

imported. Third, Camesa argues that even if the Department were to

accept the figures as timely and find them significant in judging the

commercial reasonableness of Camesa's U.S. sales prices, the

[[Page 40551]]

petitioner has misinterpreted the law regarding the importance of a

sale's commercial reasonableness. According to Camesa, in order to

prove that sales are not bona fide it is not enough to show that their

sales terms are commercially unreasonable. Camesa cites Silicon Metal

from Brazil: Notice of Final Results of Antidumping Duty Administrative

Review: ``[T]he Department only disregards U.S. sales in exceptional

circumstances where the sale is commercially unreasonable and other

facts and circumstances indicate an attempt to manipulate the dumping

margins.'' 64 FR 6305, 6317 (Feb. 9, 1999) (Silicon Metal from Brazil).

DOC Position: We agree with Camesa. While the Department's

authority to disregard U.S. sales in administrative reviews as non-bona

fide transactions has been recognized by the Court of International

Trade (CIT), see, e.g., PQ Corp. v. United States, 652 F. Supp. 724,

729 (CIT 1987), there is no express statutory or regulatory provision

that addresses or guides the exclusion of U.S. sales. Nevertheless, the

Department has the ``authority to prevent fraud upon its proceedings.''

Chang Tieh Indust. Co., Ltd. v. United States, 840 F.Supp. 141, 146

(CIT 1993). Thus, the Department has the discretion to exclude certain

U.S. sales where those sales are clearly ``distorting or

unrepresentative.'' American Permac, Inc. v. United States, Slip Op.

92-8 (Feb. 4, 1992).

In order to determine whether sales should be excluded as non-bona

fide transactions, the Department in the past has looked at a variety

of factors indicating ``whether the transaction has been so

artificially structured as to be commercially unreasonable.'' Certain

Cut-to-Length Carbon Steel Plate from Romania: Notice of Rescission of

Antidumping Duty Administrative Review, 63 FR 47232 (Sep. 4, 1998)

(Steel Plate from Romania); see also Silicon Metal from Brazil, 64 FR

at 6317 (noting that the Department will exclude U.S. sales where

exceptional circumstances demonstrate commercially unreasonable sales

terms and an attempt to manipulate the margin calculations).

However, a sale will not be excluded simply because it was made for

the purpose of obtaining a smaller margin, ``as long as the sale itself

is at least arguably commercially reasonable.'' Steel Plate from

Romania, 63 FR at 47234; see also P.Q. Corp., 652 F. Supp. at 729

(explaining that an overpriced transaction created solely for the

purpose of lowering the margin may be acceptable if the transaction was

in fact sold at arm's length). Rather, the Department looks at the

totality of the circumstances to determine whether the transactions in

question are artificial, and thus, would not provide an appropriate

basis for determining the respondent's U.S. pricing behavior. See

Manganese Metal from the PRC, 60 FR 56,045 (Nov. 6, 1995) (``Based on

the totality of the circumstances, . . . the Department determines, . .

. that these were not bona fide sales for commercial purposes and,

therefore, would not provide an appropriate basis for determining

[respondent's] pricing behavior for sales to the United States.

Therefore, these sales have been disregarded.''); see also Steel Plate

from Romania (``Based on the cumulative weight of these factors, we

determine that this sale was not bona fide because it was not a

commercially reasonable transaction and involved selling procedures

atypical of (the exporter's and importer's) normal business

practices.'')

We agree that the facts cited by the petitioner to prove that the

sale was artificially structured, namely the small number of sales, the

single customer, and the late sale date, could be, as Camesa argues,

simply the result of the high cash deposit rate on steel wire rope from

Mexico in effect during the POR. Additionally, while the number of

sales made by Camesa during the POR was small, the quantity of goods

sold was substantial. Finally, nothing in the record suggests that the

documentation for the transactions was fabricated, see Sulfanic Acid

from Hungary, 58 FR 8256, 8257 (Feb. 12, 1993) (the Department applied

BIA where documents discovered at verification indicated that

information might have been fabricated for the purpose of the

investigation); compare Salmon from Norway, 62 FR 1430 (Jan. 10, 1997)

(sales were included where there was no evidence of fabricated

documents or other suspicious activity), or that the sales were not

made at arm's length. Although Customs data generally provides a good

basis for determining whether sales have been made at commercially

reasonable prices we agree with Camesa in this instance that the price

figure provided by the petitioner covers a range of products so broad

that it cannot be meaningfully compared with Camesa's sales prices

during the POR.

The petitioner's questioning of Camesa's customer's genuine

interest in purchasing steel wire rope is not supported by the record.

The only evidence on the record indicating the customer's motive for

its purchase, while not elaborate, nevertheless indicates a genuine

desire to become a customer of Camesa's and a purchaser of steel wire

rope within the scope of the order. Please see Camesa's June 5, 1998

response, appendix A-6-B, document 1 for another explanation of the

customer's motive, due to the proprietary nature of the explanation.

Because the petitioner has not provided sufficient evidence to

demonstrate that the sales involved were fabricated or otherwise

commercially unreasonable, and we have found no other evidence

demonstrating that the sales were not bona fide transactions, we have

continued to include these sales in our margin calculation in these

final results of review.

Comment 2: Whether the Department Should Reject Camesa's Home Market

Sales Data as Inaccurate and Inherently Unreliable and Instead Use

Adverse Facts Available

In the Department's preliminary results of review, we rejected

Camesa's second home market sales database, submitted on October 20,

1998, noting that it contained discrepancies with the original

database, submitted on July 7, 1998. We concluded that these

discrepancies constituted new information not requested by the

Department. \1\ Because this new information was not requested and was

not submitted within the time period stipulated by 19 CFR

351.301(b)(2), we rejected the second database as untimely.

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\1\ On October 20, 1998, Camesa submitted its second home market

sales database in response to our supplemental questionnaire, which

requested that Camesa submit information on product characteristics

and additional sales. In doing so, however, it did not simply submit

an addendum to the first database, but instead, resubmitted the

entire home market sales database; i.e., all data regarding home

market sales were resubmitted. Some of the fields in this second

database contained information conflicting with the first database,

even though we had not requested Camesa to revise any of the

previously submitted fields. We had only requested the inclusion of

additional fields; i.e., product characteristics, and the inclusion

of additional sales observations.

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The petitioner argues that these discrepancies, which the

Department described as ``significant and unexplained,'' see Memorandum

to the File from Case Analyst (March 2, 1999) at 2, raise serious

questions about the accuracy of all home market data submitted by

Camesa during the POR. The petitioner further argues that, by

submitting new information in its second database, Camesa was admitting

that its first submission was inaccurate. According to the petitioner,

``submission of such significant adjustments in its supplemental filing

is an overt and explicit admission that its

[[Page 40552]]

initial database was inaccurate.'' The petitioner notes that the

discrepancies affected the reporting of all sales that were contained

in both databases and affected numerous fields reported for these

sales, including gross unit price and several adjustments used by the

Department in calculating normal value. The petitioner concludes that

the Department should reject Camesa's home market data in favor of

facts otherwise available.

Camesa argues that the discrepancies between its first and second

databases do not constitute an admission that Camesa's first submission

is inaccurate, but merely were the result of mistakes made under the

pressure of meeting the Department's filing deadline. Camesa argues

that these discrepancies are a result of mistakes made in compiling the

second database, not a result of an attempt by Camesa to revise the

data it reported in its first submission. These discrepancies, Camesa

claims, do not call into question the accuracy of the underlying data.

Moreover, Camesa points to several expenses for which, in its July

7, 1998 response to the Department's first questionnaire, Camesa

provided worksheets and other documents to explain and support the data

reported in the July 7, 1998 database. Camesa attempts to explain some

of the discrepancies found in three of the fields reported in its home

market database. It argues that it could not resolve all of the

discrepancies without placing new information on the record, which had

been closed per Sec. 351.301(b)(2). \2\ The petitioner contends that

Camesa's attempts at resolving the discrepancies are inadequate.

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\2\ The petitioner did not argue that Camesa submitted untimely

information in the attempts, in its April 8, 1999 case brief, it

made to resolve the discrepancies.

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Finally, Camesa contends that, even if it had conceded there were

errors in its initial sales listing, that fact alone would not justify

the resort to an adverse inference, as Camesa has cooperated fully in

this review.

DOC Position: We agree with Camesa. The record does not indicate

that the original database is inaccurate or unreliable, and we do not

find that Camesa failed to act to the best of its ability.

Under section 776(a) of the Act and 19 CFR 351.308, the Department

will only rely on facts otherwise available when: (1) Necessary

information is not on the record; or (2) the respondent has withheld

information, fails to provide requested information, significantly

impedes a proceeding, or provides information that cannot be verified.

Furthermore, in accordance with section 776(b) of the Act, the

Department will rely on adverse inferences only where the respondent

has failed to cooperate by not acting to the best of its ability to

comply with the Department's requests for information.

Although the Department did not conduct a verification of Camesa

during the POR, we did, per Department policy, issue an extensive

questionnaire to Camesa requesting support for all sales data provided

to us. We found some deficiencies in Camesa's response to this initial

questionnaire and thus issued a supplemental questionnaire. Camesa's

responses to both questionnaires, in combination, provided the

Department with sufficient explanations of how Camesa calculated the

data it reported, along with support for the raw numbers underlying its

response. Thus, the respondent did not withhold information or fail to

provide requested information. As such, Camesa's responses were

complete and provided all of the information necessary for margin

calculations. We note that the petitioner did not comment on Camesa's

response to either of our questionnaires or otherwise indicate that it

was concerned with the quality of Camesa's reported data, until we had

issued our preliminary results of review.

Moreover, it is important to note that we did not request the

second database as the result of having found errors in the

calculations or data used by Camesa in compiling the first database. We

requested the second database because we had determined that Camesa

needed to report a larger number of sales of similar merchandise, and

to report physical characteristics for all sales. \3\ Thus, our

rejection of the second database did not leave unanswered concerns

about the quality of Camesa's previously submitted data or

calculations.

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\3\ The Department was able to reach its preliminary conclusions

without the use of this expanded sales information. The initial,

more limited sales information provided by Camesa included above-

cost sales of identical products that were contemporaneous with all

sales in the United States. We therefore did not need to examine

sales of similar merchandise, and the necessary physical

characteristics were taken from an appendix attached to the written,

narrative portion of Camesa's October 20, 1998 submission. Thus, the

second sales database was not ultimately necessary for our

calculations.

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Finally, after having rejected Camesa's second database in our

preliminary results of review, and thus having removed it from

consideration, we cannot now use it for purposes of impugning the first

database. Even if, however, the second database were available for our

current analysis, we could not conclude that because the first database

contained some inaccuracies, all of Camesa's submitted home market data

must also be inaccurate. As explained above, the submissions on the

record were timely filed and are complete and supported by

documentation in the record. Therefore, we did not reject Camesa's home

market sales data. As such, it is not necessary to rely on adverse

facts available.

Comment 3: Whether The Department Must Affirm Its Preliminary

Determination That Camesa Sold Products in the Home Market at Below

Cost of Production

The petitioner argues that the Department correctly applied the

sales-below-cost test to all products ``under the consideration for the

determination of normal value.'' The petitioner also argues that sales

``under consideration for the determination of normal value'' should

include all home market sales reported.

Respondents did not comment on this issue.

DOC Position: We agree with the petitioner that a sales-below-cost

test must be conducted on all home market sales reported, and affirm

our preliminary finding that Camesa made sales below cost in its home

market during the POR.

Comment 4: Whether the Department Should Summarily Reject All of the

Petitioner's Contentions

In its rebuttal brief, Camesa argues that the petitioner did not

raise its objections in a timely manner. Camesa notes that the

petitioner did not submit comments on any of Camesa's questionnaire

responses, and did not, until after publication of our preliminary

results of review, indicate it had concerns with the bona fide nature

of Camesa's sales to the United States or with the suitability of

Camesa's home market data for review.

DOC Position: The Department disagrees with Camesa. Section

351.309(b) of the Department's regulations states that the Department

will consider case and rebuttal briefs filed within stated time limits.

An interested party is under no burden to provide another party with

advance warning of the issues it plans to raise in its case brief. In

fact, an interested party might very well have no idea what arguments

it will need to make until the Department has issued its preliminary

results of review. In this case, for example, the petitioner had no

advance

[[Page 40553]]

warning that the Department would reject Camesa's second submission of

home market sales data (see the above discussion of Comment 2) until

our preliminary results were issued.

Interested parties were given five days after the filing of case

briefs in which to respond to the arguments of other parties, in

accordance with Sec. 351.309(d) of the Department's regulations.

Finally, the petitioner's comments did not raise unusually complex

issues. Camesa did not indicate to the Department, prior to its April

13th submission, that it was having difficulty responding to the

petitioner's arguments within the allotted time period, nor has it

explained how in particular it was overburdened or denied a reasonable

opportunity for responding.

We determine that the following dumping margins exist:

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

Margin

Manufacturer/exporter Period (percent)

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Aceros Camesa, S.A. de C.V................ 3/1/97-2/28/98 0.00

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The Department shall determine, and the customs service shall

assess, antidumping duties on all appropriate entries. We will instruct

customs to liquidate the entries made during the POR without regard to

antidumping duties since no margins were determined to exist in this

review. The Department will issue appraisement instructions directly to

the U.S. Customs Service.

Furthermore, the following deposit requirements will be effective,

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

shipments of steel wire rope from Mexico 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 Camesa will be the rate stated above; (2) for previously

investigated 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 this review, or

the original investigation, 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) the cash deposit rate for all

other manufacturers or exporters will continue to be 111.68 percent,

the all others rate established in the less-than-fair-value (LTFV)

investigation.

These 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 351.402(f) 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 the only 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. 351.306 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

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)), section 771(i) of

the Act (19 U.S.C. 1677f(i)), and 19 CFR 351.213.

Dated: July 6, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-19166 Filed 7-26-99; 8:45 am]

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