Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From the United Kingdom: Final Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-412-810]

Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From

the United Kingdom: Final Results of Antidumping 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 April 6, 1999, the Department of Commerce published the

preliminary results of the administrative review of the antidumping

duty order on certain hot-rolled lead and bismuth carbon steel products

from the United Kingdom (64 FR 16699). This review covers British Steel

Engineering Steels Limited, a manufacturer/exporter of the subject

merchandise to the United States, and the period March 1, 1997, through

February 28, 1998. We gave interested parties an opportunity to comment

on the preliminary results. Based on our analysis of the comments

received and the correction of certain data, the final results differ

from the preliminary results. The final results are listed below in the

``Final Results of Review'' section of this notice.

EFFECTIVE DATE: August 9, 1999.

FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or Kate Johnson,

Office 2, AD/CVD Enforcement Group I, Import Administration, Room B099,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW, Washington DC 20230; telephone

(202) 482-4007, or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION:

Background

On April 6, 1999, the Department of Commerce (the Department)

published in the Federal Register the preliminary results of the 1997-

1998 administrative review of the antidumping duty order on certain

hot-rolled lead and bismuth carbon steel products from the United

Kingdom (64 FR 16699) (Preliminary Results). On June 15, 1999, British

Steel Engineering Steels Limited (BSES) submitted its case brief. On

June 23, 1999, Ispat Inland Inc. and USS/KOBE Steel Co. (the

petitioners), submitted their rebuttal brief. The Department held a

hearing on June 25, 1999. The Department has now completed its

administrative review in accordance

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with section 751 of the Tariff Act of 1930, as amended (the Act).

Applicable Statute and Regulations

Unless otherwise indicated, all citations to 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 to the regulations at 19 CFR part 351

(1998).

Scope of the Review

The products covered by this review are hot-rolled bars and rods of

nonalloy or other alloy steel, whether or not descaled, containing by

weight 0.03 percent or more of lead or 0.05 percent or more of bismuth,

in coils or cut lengths, and in numerous shapes and sizes. Excluded

from the scope of this review are other alloy steels (as defined by the

Harmonized Tariff Schedule of the United States (HTSUS) Chapter 72,

note 1 (f)), except steels classified as other alloy steels by reason

of containing by weight 0.4 percent or more of lead, or 0.1 percent or

more of bismuth, tellurium, or selenium. Also excluded are semi-

finished steels and flat-rolled products. Most of the products covered

in this review are provided for under subheadings 7213.20.00.00 and

7214.30.00.00 of the HTSUS. Small quantities of these products may also

enter the United States under the following HTSUS subheadings:

7213.31.30.00; 7213.31.60.00; 7213.39.00.30; 7213.39.00.60;

7213.39.00.90; 7213.91.30.00; 7213.91.45.00; 7213.91.60.00; 7213.99.00;

7214.40.00.10, 7214.40.00.30, 7214.40.00.50; 7214.50.00.10;

7214.50.00.30, 7214.50.00.50; 7214.60.00.10; 7214.60.00.30;

7214.60.00.50; 7214.91.00; 7214.99.00; 7228.30.80.00; and

7228.30.80.50. HTSUS subheadings are provided for convenience and

customs purposes. The written description of the scope of this

proceeding is dispositive.

Duty Absorption

On April 28, 1998, the petitioners requested that the Department

determine whether antidumping duties had been absorbed by BSES during

the period of review (POR), pursuant to section 751(a)(4) of the Act.

Section 751(a)(4) of the Act provides that the Department, if

requested, will determine during an administrative review initiated two

years or four years after publication of the order whether antidumping

duties have been absorbed by a foreign producer or exporter subject to

the order if the subject merchandise is sold in the United States

through an importer who is affiliated with such foreign producer or

exporter. In this case, BSES sold to the United States through an

importer that is affiliated within the meaning of section 751(a)(4) of

the Act.

Section 351.213(j)(2) of the Department's regulations provides

that, for transition orders as defined in section 751(c)(6)(C) of the

Act, i.e., orders in effect on January 1, 1995, the Department will

make a duty absorption determination upon request in administrative

reviews initiated in 1996 or 1998. See Antidumping Duties;

Countervailing Duties: Final Rule, 62 FR 27296, 27394, May 19, 1997.

This approach ensures that interested parties will have the opportunity

to request a duty absorption determination prior to sunset reviews for

entries for which the second and fourth years following an order have

already passed. Because the order on certain hot-rolled lead and

bismuth carbon steel products from the United Kingdom has been in

effect since 1993, this is a transition order within the meaning of

section 751(c)(6)(C) of the Act. Thus, as there has been a request for

an absorption determination in this review (initiated in 1998), we are

making a duty-absorption determination.

On January 29, 1999, the Department requested proof that

unaffiliated purchasers will ultimately pay the antidumping duties to

be assessed on entries during the review period. BSES did not respond

to the Department's request for information. Accordingly, based on the

record, we cannot conclude that the unaffiliated purchaser in the

United States will pay the ultimately assessed duty. Therefore, we find

that antidumping duties have been absorbed by the producer or exporter

during the POR.

We have determined that there is a dumping margin on 63.37 percent

of BSES's U.S. sales during the POR. Under these circumstances,

therefore, we find that antidumping duties have been absorbed by BSES

on 63.37 percent of its U.S. sales of subject merchandise.

Interested Party Comments

Comment 1: Model Matching Methodology

BSES argues that the Department should use dimension ranges rather

than exact sizes to match products in this review. According to BSES,

matching by size range has the advantage of including more home market

sales in normal value (NV), which lessens the possibility that NV will

be based on small quantities of non-representative sales. BSES further

states that there is an objective and relevant system of dimension

ranges inherent in its published price list. Moreover, because the

Department has decided to employ dimension ranges in the matching

methodology in future reviews, BSES asserts that such ranges should

also be used in the present review. BSES adds that the petitioners

supported matching dimension ranges in past reviews.

BSES also suggests that in order to decrease distortion and improve

its matching methodology, the Department should place the product

characteristic that identifies whether the product is in coils or

straight (cut) ahead of the product characteristic that identifies the

cross-sectional shape of the steel (shape). BSES argues that, because

shape is preferred under the Department's current methodology, the

Department might match, for example, a hexagonal bar in coil to a

hexagonal straight bar, even though coiled bar has different costs, and

thus prices, than straight bar of the same diameter and shape.

Accordingly, BSES contends that it is important to match coiled bar to

coiled bar, and straight bar to straight bar.

The petitioners argue that the Department should not change its

model matching methodology at this late point in the current

administrative review. The petitioners assert that the Department

apparently has not yet decided whether to use actual sizes or size

ranges in the 1998-1999 review, nor has it had the opportunity to test

the suggested size ranges during a review, such as at a verification.

Accordingly, the petitioners urge the Department to reject BSES's

request and to continue to use actual size rather than size ranges for

model matching purposes in this review.

Furthermore, the petitioners argue that the Department should

reject BSES's proposed ranking of cut over shape in the model matching

methodology. The petitioners claim that shape is a much more

significant matching characteristic than cut, because any shape other

than round requires a significant slowdown of the mill, which greatly

increases production costs. The petitioners contend that this cost

increase is a much more significant cost difference than that involved

in the production of coiled versus straight bar. Finally, the

petitioners argue that the Department apparently has rejected any

revised ranking of cut and shape for purposes of the 1998-1999 review.

Therefore, according to the petitioners,

[[Page 43151]]

the Department should maintain its ranking of shape before cut in the

model matching hierarchy.

DOC Position: In the preliminary results of this review, we matched

products by exact size rather than by dimension range, and prioritized

cut before shape in the model match hierarchy, as we have done

throughout the history of this case. The issue of revising the model

matching methodology was first raised during the briefing stage of this

administrative review, and was precipitated by our solicitation of

comments on model matching for the purposes of the 1998-1999 review,

and our issuance of a questionnaire for that review period. (See

Letters from Irene Darzenta Tzafolias dated April 14, 1999 and June 10,

1999, placed on the record of the 1998-1999 administrative review.)

Although we have requested dimension range information for purposes of

the 1998-1999 review, we have not yet received and analyzed such

information. Furthermore, there is insufficient information on the

record of the 1997-1998 review with respect to cut and shape to compel

us to change the established matching hierarchy at this late stage of

the review. Therefore, we have not revised the model matching

methodology in these final results.

Comment 2: Arm's -Length Test

BSES argues that the Department's arm's-length test program ignores

the levels of trade that the Department identified in the preliminary

results, comparing prices between affiliated and unaffiliated customers

regardless of level of trade. In so doing, BSES claims that the program

erroneously causes some customers to fail the arm's-length test. BSES

states that the Department has accounted for the effect of level of

trade on price, and has performed the arm's-length test by level of

trade in other recent cases, such as Final Results and Partial

Rescission of Antidumping Duty Administrative Review: Certain Pasta

From Turkey, 63 FR 68429, 68432, December 11, 1998 (Pasta from Turkey).

BSES adds that, by comparing sales prices to unaffiliated customers

with sales prices to affiliated customers at the same level of trade,

the arm's-length test is not distorted by comparing prices at different

levels of trade. Accordingly, BSES asserts, the Department should

follow its standard practice in the final results, and account for

level of trade in performing the arm's-length test. BSES submits

computer programming language to accomplish this change.

BSES also argues that the preliminary margin program contains a

clerical error that caused the inadvertent exclusion of customers from

the arm's-length test before the price comparisons were complete.

Specifically, when the program failed to find an unaffiliated product

match for an affiliated customer, it disqualified that affiliated

customer from the test before testing whether the other products sold

to that affiliated customer are also sold to unaffiliated customers.

BSES contends that if the test is performed correctly, additional

affiliated customers pass the arm's-length test. Accordingly, BSES

argues, the Department should correct this clerical error for purposes

of the final results. BSES submits computer programming language that

would correct this error.

The petitioners argue that BSES's suggested computer programming

language incorporating level of trade into the arm's-length test

appears to be incomplete, because it does not allow for price

comparisons at different levels of trade if no product match can be

found at the same level of trade. Accordingly, the petitioners contend

that the Department should not implement BSES'' suggested programming

language.

With regard to the clerical error that BSES alleges erroneously

excludes customers from the data base before completion of the arm's-

length test on all sales to those customers, the petitioners do not

object to the correction of this error.

DOC Position: We agree with BSES that the preliminary arm's-length

test should have accounted for level of trade in making affiliated to

unaffiliated price comparisons, in accordance with the Department's

practice. See Pasta from Turkey at 63 FR at 68432. We also agree with

BSES'' suggested programming language in this regard, and have changed

the arm's-length test program accordingly in the final results.

We disagree with the petitioners that BSES's suggested programming

language is incomplete because it does not allow for price comparisons

at different levels of trade if no product match can be found at the

same level of trade. The purpose of the methodology employed in the

Department's arm's-length test is to compare sales prices to

unaffiliated customers to sales prices to affiliated customers at the

same level of trade. See Pasta from Turkey. As BSES points out in its

case brief, in this way the arm's-length test measures the true

relationship between these prices and is not distorted by price

differences attributable to differentiation in levels of trade.

Therefore, we have used only those sales of identical products at the

same level of trade in making the arm's-length price comparisons.

Finally, we agree with BSES that a clerical error in the arm's-

length test prevented the program from performing a complete comparison

of affiliated to unaffiliated customer prices. We concur with BSES''

suggested programming language in this regard, and have made the

necessary corrections to the computer program for the final results.

Final Results of the Review

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

margin exists for the period March 1, 1997 through February 28, 1998:

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

Margin

Manufacturer/exporter Period (percent)

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BSES.................................... 3/1/97-2/28/98 6.17

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

assess, antidumping duties on all appropriate entries. We have

calculated an importer-specific assessment rate by aggregating the

dumping margins calculated for all examined sales and dividing this

amount by the total quantity sold. 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 the Customs

Service.

Further, the following deposit requirements shall be effective for

all shipments of the subject merchandise from the United Kingdom that

are entered, or withdrawn from warehouse, for consumption on or after

the publication date of the final results of this administrative

review, as provided for by section 751(a)(1) of the Act: (1) The cash

deposit rate for BSES will be the rate established above in the ``Final

Results of Review'' section; (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 of this merchandise will continue to be

25.82 percent, the all others rate established in the final

determination of the less-than-fair-value investigation (58 FR 15324,

March 22, 1993). 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

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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 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 19 CFR 353.34(d). Timely written notification of

return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulation and the terms of an APO is a sanctionable violation.

This administrative review and notice are issued and published in

accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR

351.221.

Dated: July 30, 1999.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-20450 Filed 8-6-99; 8:45 am]

BILLING CODE 3510-DS-P