Brass Sheet and Strip from Canada: Preliminary Results of Antidumping Duty Administrative Review, Intent Not To Revoke Order in Part, and Extension of Time Limit

DEPARTMENT OF COMMERCE

INTERNATIONAL TRADE ADMINISTRATION

[A-122-601]

Brass Sheet and Strip from Canada: Preliminary Results of

Antidumping Duty Administrative Review, Intent Not To Revoke Order in

Part, and Extension of Time Limit

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review, intent not to revoke order in part, and

extension of time limit.

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SUMMARY: In response to separate requests by Wolverine Tube (Canada),

Inc. (Wolverine), the respondent, and by Hussey Copper, Ltd,; The

Miller Company; Olin Corporation; Revere Copper Products, Inc,;

International Association of Machinists and Aerospace Workers;

International Union, Allied Industrial Workers of America (AFL-CIO);

Mechanics Educational Society of America, and United Steelworkers of

America (AFL-CIO), collectively, the petitioner, the Department of

Commerce (the Department) is conducting an administrative review of the

antidumping duty order on brass sheet and strip from Canada. The review

covers one manufacturer/exporter of this merchandise to the United

States, Wolverine. The period covered is January 1, 1997 through

December 31, 1997. As a result of the review, the Department has

preliminarily determined that no dumping margins exist for his

respondent for the covered period. However, we do not intend to revoke

the order with respect to brass sheet and strip from Canada

manufactured by Wolverine, since we found in our final results covering

the 1996 period of review that sales made during that period were made

below normal value.

We invite interested parties to comment on these preliminary

results. Parties who submit argument in this proceeding are requested

to submit with the argument (1) a statement of issue and (2) a brief

summary of the argument.

EFFECTIVE DATE: February 8, 1999.

FOR FURTHER INFORMATION CONTACT: Paul Stolz or James Terpstra, Office

of Antidumping/Countervailing Duty Enforcement, Import Administration,

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

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

(202) 482-4474 or 482-3965, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

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 (URAA). In addition, unless otherwise

indicated, all citations to the Department's regulations refer to the

regulations codified at 19 CFR Part 351 (1998).

Background

The Department published an antidumping duty order on brass sheet

and strip from Canada on January 12, 1987 (52 FR 1217). On January 12,

1998, the Department published a notice of ``Opportunity to Request an

Administrative Review'' of the antidumping duty order on brass sheet

and strip from Canada (63 FR 1820). On January 30, 1998, a

manufacturer/exporter, Wolverine, requested an administrative review of

its exports of the subject merchandise to the United States for the

period of review (POR), January 1, 1997, through December 31, 1997. In

accordance with 19 CFR 351.213 we published a notice of initiation of

administrative review on February 27, 1998 (63 FR 10002). The

Department is now conducting this administrative review in accordance

with section 751 of the Act.

Scope of Review

Imports covered by this review are shipments of brass sheet and

strip (BSS), other than leaded and tinned BSS. The chemical composition

of the covered products is currently defined in the Copper Development

Association (C.D.A.) 200 Series or the Unified Numbering System

(U.N.S.) C2000. This review does not cover products the chemical

compositions of which are defined by other C.D.A. or U.N.S. series. In

physical dimensions, the products covered by this review have a solid

rectangular cross section over 0.006 inches (0.15 millimeters) through

0.188 inches (4.8 millimeters) in finished thickness or gauge,

regardless of width. Coiled, wound-on-reels (traverse would), and cut-

to-length products are included. The merchandise is currently

classified under Harmonized Tariff Schedule (HTS) item numbers

7409.21.00 and 7409.29.00. Although the HTS item numbers are provided

for convenience and customs purposes, the Department's written

description of the scope of this order remains dispositive. Pursuant to

the final affirmative determination of circumvention of the antidumping

duty order, covering the period September 1, 1990, through September

30, 1991, we determined that brass plate used in the production of BSS

falls within the scope of the antidumping duty order on BSS from

Canada. See Brass Sheet and Strip from Canada: Final Affirmative

Determination of Circumvention of Antidumping Duty Order, 58 FR 33610

(June 18, 1993).

The POR is January 1, 1997 through December 31, 1997. The review

involves one manufacturer/exporter, Wolverine.

Export Price

We used export price (EP), as defined in section 772 of the Act,

because the merchandise was sold to unaffiliated U.S. purchasers prior

to the date of importation and because no other circumstances indicated

that constructed export price was appropriate. We calculated EP based

on delivered prices. In accordance with section 772(c)(1) of the Act,

we adjusted EP for brokerage and handling, foreign and U.S. inland

freight, and customs duty. We also recalculated imputed credit expenses

for U.S. sales based on the U.S. prime interest rate. See ``Further

Developments'' as described below. No other adjustments to EP were

claimed or allowed.

Normal Value (NV)

A. Viability

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating NV,

we compared Wolverine's volume of home market sales of the foreign like

product to the volume of U.S. sales of the subject merchandise, in

accordance with section 773(a)(1)(C) of the Act. Because of Wolverine's

aggregate volume of home market sales of the foreign like product was

greater than five percent of its aggregate volume of U.S. sales of the

subject merchandise, we determined that the home market provides a

viable basis for calculating NV for Wolverine.

B. Below Cost of Production Test

Because we disregarded sales below the cost of production in the

1996 POR, the most-recently completed segment of this proceeding, we

have reasonable grounds to believe or suspect that sales of the foreign

like product under consideration for determining NV in this review may

have been at prices below the cost of production (COP), within the

meaning of section

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773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 773(b)(1)

of the Act, we initiated a COP investigation of sales by Wolverine (see

Memorandum to the File, dated March 31, 1998, available in Room B-099

of the Main Commerce Building). In accordance with section 773(b)(3) of

the Act, we calculated COP based on the sum of materials and

fabrication employed in producing the foreign like product, plus

selling, general, and administrative expenses (SG&A) and the cost of

all expenses incidental to placing the foreign like product in

condition packed ready for shipment. We relied on the home market sales

and COP information Wolverine provided in its questionnaire responses.

After calculating COP, we tested whether home market sales of subject

BSS were made at prices below COP within an extended period of time in

substantial quantities, and whether such prices permitted the recovery

of all costs within a reasonable period to time. We compared model-

specific COPs to the reported home market prices less any applicable

movement charges, direct selling expenses, and packing expenses.

Pursuant to section 773(b)(2)(C) of the Act, where less than twenty

percent of Wolverine's home market sales for a model were at prices

less than the COP, we did not disregard any below-cost sales of that

model because we determined that the below-cost sales were not made

within an extended period of time in ``substantial quantities.'' Where

twenty percent or more of Wolverine's home market sales were at prices

less than the COP, we determined that such sales were made within an

extended period of time in substantial quantities in accordance with

section 773(b)(2) (B) and (C) of the Act. To determine whether such

sales were at prices which would not permit the full recovery of all

costs within a reasonable period of time, in accordance with section

773(b)(2)(D) of the Act, we compared home market prices to the

weighted-average COPs for the POR. The results of our cost test for

Wolverine indicated that for certain home market models less than

twenty percent of the sales of the model were at prices below COP. We

therefore retained all sales of these models in our analysis and used

them as the basis for determining NV. Our cost test for Wolverine also

indicated that for certain other home market models more than twenty

percent of the home market sales within an extended period of time were

at prices below COP and would not permit the full recovery of all costs

within a reasonable period of time. In accordance with section

773(b)(1) of the Act, we therefore excluded the below-cost sales of

these models from our analysis and used the remaining above-cost sales

as the basis for determining NV.

C. Model-Matching

We calculated NV using prices of BSS products having the same

characteristics as to form, gauge, width, and alloy. We used the same

gauge and width groupings and the same model-match methodology in this

review as in the last completed administrative review (1996). As in the

1995 and 1996 reviews, we did not rely on ``source'' designations in

the product codes for model matching purposes since the ``source''

(i.e., whether reroll or nonreroll brass is used to make the product)

does not appear to describe physical characteristics of the resulting

subject merchandise itself; nor has Wolverine demonstrated that this is

an appropriate matching criterion. Wolverine claimed in its response

that the grain density of the reroll material obtained from outside

suppliers was higher than that of its own cast material. Although this

may be the case, respondent's claim has not been substantiated on the

record of this review.

In addition, we noted in this review that the coding Wolverine

reported for the ``temper'' matching characteristic included a

secondary characteristic for ``finish.'' This characteristic had not

previously been identified by the Department, nor has Wolverine

adequately demonstrated that it is appropriate to use in model

matching. Moreover, it is no longer clear whether Wolverine's reported

temper codes are correct. Therefore, for the preliminary results of

this review we are not considering ``finish'' or reported temper codes

as matching characteristics and have adjusted our computer program

accordingly. We will seek additional information on these issues

following the preliminary results of this administrative review and

will incorporate our findings into our analysis for the final results

of this review. See ``Further Developments'' as described below.

We calculated NV using monthly weighted-average prices of BSS

having the same characteristics as to form, gauge, width, and alloy. We

based NV on the price at which the foreign like product is first sold

for consumption in the exporting country, in the usual commercial

quantities and in the ordinary course of trade, and at the same level

of trade as the export price, in accordance with section

773(a)(1)(B)(i) of the Act.

We reduced NV for home market credit and warranty expenses, and

increased NV for U.S. credit expenses and U.S. warranty expenses in

accordance with section 773(a)(6)(C)(iii), due to differences in

circumstances of sale. We reduced NV for home market movement expenses,

in accordance with section 773(a)(6)(B)(ii); and for packing costs

incurred in the home market, in accordance with section

773(a)(6)(B)(i); and increased NV to account for U.S. packing expenses.

Wolverine reported ``quantity adders'' as a circumstance of sale

adjustment. However, we have not made corresponding adjustments in this

review. Wolverine failed to provide sufficient information to determine

whether this adjustment should be made. Moreover, in the event that the

Department determines that an adjustment is appropriate, it is not

clear that Wolverine has properly quantified sales in both the home and

U.S. markets. Accordingly, we have determined that the administrative

record is incomplete with respect to this item and have made no

corresponding adjustments. See ``Further Developments'' as described

below.

Level of Trade

In accordance with section 773(a)(1)(B) 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, the U.S.

LOT is also the level of the starting-price sale, which is usually from

the exporter to an unaffiliated U.S. customer. For CEP, it is the level

of the constructed sale from the exporter to an affiliated importer,

after the deductions required under section 772(d) of the Act. To

determine whether NV sales are at a different LOT than EP or CEP, we

examine stages in the marketing process and selling functions along 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 an 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

[[Page 6041]]

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).

In this review, Wolverine stated in its questionnaire response that

it was not requesting a LOT adjustment and therefore did not include

the corresponding field ``LOTADJH'' in its reported home market sales

list. Although Wolverine claimed that one of its two customer

categories required a higher level of support than the other, it did

not place information on the record in order to detail or quantify any

possible resulting differences in selling functions which could

potentially constitute different LOTs. Nor did we request additional

information with respect to this issue.

Because the record does not show that Wolverine performed different

selling functions with respect to different channels of distribution,

we have preliminarily determined that there is only one LOT in the home

market. Furthermore, since the record does not indicate differences in

selling functions between the home market and the U.S. market, we have

preliminarily determined that no level of trade adjustments under

section 773(a)(7)(A) of the Act are warranted. However, we will

reexamine this issue for the final results.

Further Developments

Both petitioner and respondent have submitted comments regarding

the calculation of the preliminary results of this review. Submissions

by both parties included untimely submitted new factual information.

Therefore, the Department has required deletion of this information.

However, in reaching its preliminary results, the Department has taken

note of the portions of these submissions which contained relevant

argument not based on new factual information. As a result, the

Department has decided not to make adjustments in these preliminary

results to the submitted prices for ``adders'' (surcharges on certain

small quantity orders) and to disregard ``temper'' and ``finish'' as a

matching characteristics, as described above. In addition, the

Department has recalculated imputed credit expenses reported for U.S.

sales. This recalculation was done since Wolverine reported imputed

credit expenses for U.S. sales based on its home market interest rate.

Sales to the U.S. market had been made in U.S. dollars, and therefore,

in accordance with Department policy, imputed credit expenses for these

sales should have been reported based on the company's U.S. interest

rate or other applicable U.S. interest rate.

Moreover, petitioner has requested that we resort to facts

available with respect to certain portions of the submitted data.

However, there is insufficient basis on which to make such a

determination at this time. In order to resolve these issues and

certain other issues raised by petitioner's and respondent's comments,

and to determine whether the application of facts available is

appropriate, the Department has decided that additional information and

further analysis is necessary. Therefore, following publication of

these preliminary results, the Department will request additional

information on ``interest'', ``general and administrative expenses'',

``finish'', ``temper'', ``packing'', and ``adders'' for use in its

analysis for the final results of this review. Moreover, since the

Department will collect and analyze additional information, the

Department has determined that it is not practicable to complete the

final results of this administrative review within the original time

limit, and is therefore extending the due date for the final results of

this review, pursuant to section 351.213(h)(2) of the Department's

regulations, until 180 days from publication of these preliminary

results.

Revocation

On January 30, 1998, Wolverine submitted its request for an

administrative review covering the 1997 POR and, pursuant to 19 CFR

351.222(b), requested revocation of the antidumping duty order with

respect to Wolverine. In its request, Wolverine stated that it expected

to receive a de minimis margin in the final results of the 1996 and

1997 POR reviews. Wolverine noted that these would be the third and

fourth consecutive de minimis margins received, and thus Wolverine

would be eligible for revocation in accordance with 19 CFR

351.222(b)(2), which among other requirements stipulates that the

respondent requesting revocation has sold the subject merchandise at

not less than NV for at least three consecutive administrative reviews

and is not likely to do so in the future. This request was accompanied

by certifications from the firm that it had not sold the relevant class

or kind of merchandise at less than NV for a two-year period and

anticipated receiving a de minimis dumping margin in the 1996 POR and

in the 1997 POR, and would not sell the relevant class or kind of

merchandise at less than NV in the future. Wolverine also agreed to its

immediate reinstatement in the relevant antidumping duty order, as long

as any firm is subject to this order, if the Department concludes under

19 CFR 351.222(b)(2)(iii) that, subsequent to revocation, it sold the

subject merchandise at less than NV.

However, with respect to the 1996 POR, we found in our final

results of that review that sales had been made below NV and,

therefore, the Department's requirements for revocation had not been

met. See Final Results of Administrative Review and Notice of Intent

Not To Revoke Order in Part, Brass Sheet and Strip from Canada, 63 FR

33037 (June 17, 1998). Previously, the Department had found that

Wolverine's sales reviewed during the eighth (1994) and ninth (1995)

reviews and under this order were made at not less than NV. The

Department has also preliminarily determined in this administrative

review, as described below, that sales under this order were not made

at less than NV. Nonetheless, in light of the final results of the

tenth (1996) administrative review, Wolverine is not entitled to

revocation pursuant to 19 CFR 351.222(b).

Preliminary Results of the Review

As a result of our comparison of EP to NV, we preliminarily

determine that a de minimis of (0.39 percent) exists for Wolverine for

the period January 1, 1997 through December 31, 1997, and we determine,

preliminarily, not to revoke the antidumping duty order with respect to

imports of subject merchandise from Wolverine.

Parties to the proceeding may request disclosure within five days

of the date of publication of this notice. Any interested party may

request a hearing within 30 days of publication of this notice. Any

hearing will be held 44 days after the date of publication or the first

workday thereafter. Interested parties may submit case briefs within 30

days of the publication date of this notice. Rebuttal briefs, limited

to issues raised in the case briefs, may be filed not later than 37

days after the date of publication. The Department will publish a

notice of the final results of this administrative review, which will

include the results of its analysis of issues raised in any such case

briefs or at a hearing, within 180 days from publication of these

preliminary results.

The following deposit requirements will be effective for all

shipments of the subject merchandise that are entered, or

[[Page 6042]]

withdrawn from warehouse, for consumption on or after the publication

date of the final results of this administrative review, as provided by

section 751(a)(1) of the Act: (1) the cash deposit rate for Wolverine

will be the rate established in the final results of this review

(except that no deposit rate will be required for zero or de minimis

margins, i.e., margins less than 0.5 percent); (2) for previously

reviewed or 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, a prior review, or the original less-than-fair-value (LFTV)

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) if neither the manufacturer nor the exporter

is a firm covered in this or any previous review, the cash deposit rate

will be 8.10 percent, the ``all others'' rate established in the LTFV

investigation. These deposit requirements, when imposed, shall remain

in effect until publication of the final results of the next

administrative review.

Furthermore, the Department shall determine, and the Customs

Service shall assess, antidumping duties on all appropriate entries.

The Department will issue appraisement instructions directly to the

Customs Service. 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. For Wolverine, for duty assessment purposes, we calculated

importer-specific assessment rates by aggregating the dumping margins

calculated for all U.S. sales to each importer and dividing this amount

by the total entered value of those same sales. This specific rate

calculated for each importer will be used for the assessment of

antidumping duties on the relevant entries of subject merchandise

during the POR. If for the final results of this review we calculate an

assessment rate for Wolverine of less than 0.5 percent ad valorem, we

will instruct Customs to liquidate Wolverine's entries of subject

merchandise during the relevant POR without regard to antidumping

duties.

This notice 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 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 administrative review and this notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.213,

351.221.

Dated: February 1, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-2999 Filed 2-5-99; 8:45 am]

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