[Federal Register Volume 62, Number 139 (Monday, July 21, 1997)]
[Notices]
[Pages 38976-38980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19120]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-808]
Certain Stainless Steel Wire Rod From India; Final Results of New
Shipper Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of new shipper antidumping duty
administrative review; Certain Stainless Steel Wire Rod from India.
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SUMMARY: On February 11, 1997, the Department of Commerce (the
Department) published the preliminary results of the new shipper
administrative review of the antidumping duty order on certain
stainless steel wire rod (SSWR) from India (62 FR 6171). This review
covers one manufacturer/exporter of the subject merchandise to the
United States, Isibars Limited (Isibars), and the period January 1,
1996 through June 30, 1996. We gave interested parties an opportunity
to comment on our preliminary results. Based upon our analysis of the
comments received, we have not changed the results from those presented
in the preliminary results of review.
We determine that sales have not been made below normal value (NV).
Thus, we will instruct the U.S. Customs Service to liquidate subject
entries without regard to antidumping duties.
EFFECTIVE DATE: July 21, 1997.
FOR FURTHER INFORMATION CONTACT: Donald Little or Maureen Flannery,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone (202) 482-4733.
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 are to the
regulations as amended by the interim regulations published in the
Federal Register on May 11, 1995 (60 FR 25130).
SUPPLEMENTARY INFORMATION:
Background
On February 11, 1997, the Department published in the Federal
Register (62 FR 6171) the preliminary results of its new shipper
administrative review of the antidumping duty order on SSWR from India.
Under the Act, the Department may extend the deadline for
completion of new shipper administrative reviews if it determines that
it is not practicable to complete the review within the statutory time
limit of 270 days. On May 19, 1997, the Department extended the time
limit for the final results in this case. See Certain Stainless Steel
Wire Rod from India: Extension of Time Limit for Antidumping Duty
Administrative Review, 62 FR 27236 (May 19, 1997).
We have now completed the new shipper administrative review in
accordance with section 751 of the Act.
Scope of Review
The products covered by the order are SSWR which are hot-rolled or
hot-rolled annealed and/or pickled rounds, squares, octagons, hexagons
or other
[[Page 38977]]
shapes, in coils. SSWR are made of alloy steels containing, by weight,
1.2 percent or less of carbon and 10.5 percent or more of chromium,
with or without other elements. These products are only manufactured by
hot-rolling and are normally sold in coiled form, and are of solid
cross section. The majority of SSWR sold in the United States are round
in cross-section shape, annealed and pickled. The most common size is
5.5 millimeters in diameter.
The SSWR subject to this review is currently classifiable under
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0020, 7221.00.0030,
7221.00.0040, 7221.00.0045, 7221.00.0060, 7221.00.0075, and
7221.00.0080 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheading is provided for convenience and
customs purposes, the written description of the scope of this order is
dispositive.
This review covers one manufacturer/exporter, Isibars, and the
period January 1, 1996 through June 30, 1996.
Analysis of Comments Received
We gave interested parties an opportunity to comment on our
preliminary results. We received a case brief on March 3, 1997 from
petitioners (Al Tech Specialty Steel Corp.; Carpenter Technology Corp.;
Republic Engineered Steels; Slater Steels Corporation; Talley Metals
Technology, Inc. and United Steel Workers of America AFL-CIO), and a
rebuttal brief on March 10, 1997 from Isibars. On April 9, 1997, the
Department requested additional comments from petitioners and Isibars;
these comments were received on April 21, 1997.
Comment 1: Petitioners argue that the record evidence in this new
shipper review demonstrates that, through different movements in
certain third-country (Philippine) prices of the subject merchandise,
Isibars has established a fictitious market within the meaning of
section 773(a)(2) of the Act. Petitioners argue that certain third-
country sales should not be taken into account in determining NV
because it appears they were intended to artificially reduce the NV of
the subject merchandise.
Petitioners assert that the statute in this regard is clear:
The occurrence of different movements in the prices at which
different forms of the foreign like product are sold * * * after the
issuance of an antidumping duty order may be considered by the
administering authority as evidence of the establishment of a
fictitious market for the foreign like product if the movement in
such prices appears to reduce the amount by which normal value
exceeds export price (or constructed export price) of the subject
merchandise.
Section 773(a)(2) of the Act.
Petitioners argue that all sales to the Philippines--those both
inside and outside the 90/60-day window for selecting comparison sales
in the third country--share the same terms and conditions of sale,
delivery, and payment. 1 Petitioners argue that Isibars knew
precisely at which price it must sell comparable merchandise in the
Philippines in order to eliminate artificially any dumping margins
because the comparison sale occurred after the U.S. sale. Petitioners
claim that the sharply different movements in prices for the subject
merchandise are themselves dispositive of a fictitious market, and the
Department should not consider the sales in question in its
determination of NV.
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\1\ Although petitioners refer to the ``90/60 window,'' the
Department in fact has a practice of choosing its comparison sales
in the home market or third country from a window that begins three
months prior to the month of the U.S. sale, and ends two months
after the month of the U.S. sale.
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Isibars claims that petitioners miscite the statutory provision on
fictitious markets and that the statutory provision is concerned with
the change in relative prices from before the issuance of an
antidumping order to after the issuance of the order. Isibars asserts
that the prices were lower during the relevant 90/60-day period only
because that period was at the end of the period of review (POR), and
prices declined over the POR. Isibars argues that, as a general matter,
it sold to only a few customers in small quantities and sold to them
only at certain times during the POR. Isibars claims that there is
nothing unusual in that regard with respect to the particular
comparison market sale. Isibars also maintains that there is nothing
unusual in the fact that the comparison market sale occurred after the
U.S. sale. Isibars claims that the petitioners want the Department to
use sales outside the 90/60-day window, which would be contrary to
Department practice.
Department Position: We agree with Isibars that the limited number
of sales to a few customers does not provide sufficient support for
finding the requisite pricing pattern during the POR. To the contrary,
the record evidence of pricing supports Isibars' argument that prices
declined throughout the POR. Also, we agree with Isibars that there is
nothing unusual in a comparison market sale that was made after the
U.S. sale; the Department's practice allows for comparison of U.S.
prices to home market or third-country sales made up to two months
after the U.S. sale. We therefore conclude that Isibars' third-country
sales within the comparison window do not constitute a fictitious
market. For additional discussion, see the proprietary memorandum from
Joseph A. Spetrini dated July 10, 1997.
Comment 2: Petitioners argue that certain sales in the comparison
market are aberrant and should be disregarded as outside the ordinary
course of trade, as defined in section 771(15) of the Act. Petitioners
assert that, in determining whether a sale is outside the ordinary
course of trade, the Department does not rely on one factor taken in
isolation, but rather considers all of the circumstances particular to
the sale in question. See Final Determination of Sales at Less than
Fair Value: Canned Pineapple Fruit From Thailand, 60 FR 29553 (June 5,
1995). Petitioners contend that the Department's analysis of these
factors is guided by the purpose of the ordinary course of trade
provision which is to prevent dumping margins from being based on sales
that are not representative of home market or third-country sales. See
Monsanto Co. v. United States, 698 F. Supp. 275, 278 (CIT 1988).
Petitioners argue that Isibars realized a low profit on the third-
country comparison sale and that the prices were lower than those of
other POR sales. Petitioners assert that the Department's preliminary
determination in this review does the opposite of what was intended by
the ordinary course of trade provision and calculates a negative
dumping margin based on sales that are not representative of third-
country sales.
Isibars argues that its prices were reflective of general price
trends and that petitioners' argument that the Department should
compare the U.S. sale to a comparison market sale outside the 90/60-day
window is contrary to Department practice and the common sense notion
that contemporaneous sales should be compared for a fair, apples-to-
apples comparison. Isibars argues that market conditions have changed
over time, and that dumping would be shown if the Department used the
comparison sales advocated by petitioners because noncontemporaneous
(non-comparable) sales would in fact be compared. Isibars claims that
there is no record support for petitioners' claim that the particular
third-country sale chosen for comparison by the Department had a lower
profit than other sales in the Philippines. Isibars argues that
profitability would depend on the cost of raw materials used to make
the sale as opposed to sales at other points in time. Isibars argues
that, even if the sale
[[Page 38978]]
was at a lower profit, lower profit, or any other factor mentioned by
petitioners, has never been found sufficient, in and of itself, to
regard a sale as outside the ordinary course of trade.
Department Position: Section 771(15) of the Act states that the
term ``ordinary course of trade'' means the conditions and practices
which, for a reasonable time prior to the exportation of the subject
merchandise, have been normal in the trade under consideration with
respect to merchandise of the same class or kind. The statute notes
that sales and transactions disregarded under 773(b)(1) (below-cost
sales) and under 773(f)(2) (affiliated transactions), among others,
shall be considered outside the ordinary course of trade.
The facts and circumstances of this review do not support the
argument that the comparison sale used in the preliminary results was
outside the ordinary course of trade. The comparison sale is the same
type of wire rod sold throughout the POR in the Philippines and in the
United States and, as noted above, Isibars sold to this customer at
other times during and before the POR. The sales quantity of the
comparison sale was similar to the quantities of other sales during the
POR. Also, this sale was not made pursuant to a long-term contract as
petitioners contend. Furthermore, there is no basis for petitioners'
argument that Isibars realized a low profit on the third-country
comparison sale. Because there was no cost allegation in this review,
cost data was not provided. Therefore, we do not have information to
determine the profit realized on these sales, nor can we determine
whether this sale was made below the cost of production. For additional
discussion, see the proprietary memorandum from Joseph A. Spetrini
dated July 10, 1997.
Comment 3: Petitioners claim that the date of sale methodology for
the U.S. and third-country sales is improper. Petitioners note that
Isibars claims that the appropriate date of sale for its third-country
and U.S. sales is the invoice date. Petitioners note that Isibars
states that the sales documents demonstrate that the prices and
quantities in the purchase order can change up to the time of the
invoice. Petitioners argue that it is important to note that the
Department's questionnaire does not instruct respondents to report the
invoice date as that date of sale, but states:
Because the Department attempts to compare sales made at the
same time, establishing the date of sale is an important part of the
dumping analysis. Normally, the date of sale is the date of invoice.
However, for long term contracts, the date of sale generally is the
date of contract.
See Appendix I, Glossary of Terms at I-4, Antidumping Questionnaire
dated August 19, 1996 (emphasis added).
Petitioners contend that reporting of the invoice date as date of
sale violates the Department's stated practice to ``compare sales made
at the same time.'' Petitioners contend that Department's verification
exhibits demonstrate that the reported date of sale for certain third-
country sales is not correct.
Petitioners contend that the proper date of sale for the U.S. sale
is the date of order confirmation. Petitioners maintain that, when the
significance of the timing of the single U.S. sale is considered in the
context of this antidumping proceeding, it appears that Isibars has
manipulated the date of sale to avoid comparisons that would yield a
positive margin. Petitioners argue that the order confirmation date is
the point at which Isibars and the U.S. customer agreed to the terms of
sale, and that it was at that point that the U.S. industry lost the
opportunity to sell to the U.S. customer.
Petitioners argue that Isibars has manipulated the date of sale to
suit its particular needs in different administrative reviews.
Petitioners state that, in the first administrative review of the
antidumping duty order on stainless steel bar from India (bar), Isibars
claims that the proper date of sale is the date of the first written
evidence of agreement on price and quantity, and that the U.S. date of
sale is the order date. Petitioners argue that Isibars cannot have it
both ways.
Petitioners also state that Isibars requested a new shipper review
of the antidumping duty order on stainless steel flanges from India
(flanges) where it argued that purchase order was the appropriate date
of sale. Petitioners argue that the Department accepted Isibars'
conflicting date of sale methodologies and calculated zero margins in
all three preliminary results (for wire rod, flanges, and bar).
Petitioners argue that when the dates of sale are corrected so that
they are in line with the Department's normal, long-standing practice,
the results change.
Petitioners argue that the wire rod and flanges new shipper reviews
should use the same date of sale methodology because, they claim the
facts related to the date of sale in both cases are identical.
Petitioners assert that even though these two new shipper reviews were
initiated within months of each other, both after the Department's
implementation of its new date-of-invoice policy, Isibars used
different date of sales methodologies in its responses. Petitioners
contend that, in flanges, Isibars argued in direct contradiction to its
argument on the record of this review of wire rod. Petitioners assert
that in flanges Isibars argued:
The Department's draft proposed new dumping regulations on the
date of sale have not yet been implemented and thus do not affect
the timeliness of Isibars' review request.
April 12, 1996 letter from Isibars to the Department in the review of
flanges.
Petitioners contend that Isibars acknowledged the existence of the
Department's proposed regulations and the new language regarding date
of sale. Petitioners assert that, despite this, Isibars contended that
the proposed regulations regarding date of sale did not apply to
Isibars, and that therefore the Department should use purchase order as
the proper date of sale. Petitioners argue that the Department agreed
with Isibars and used the purchase order as the date of sale for U.S.
sales.
Petitioners maintain that the date-of-invoice policy covered the
reviews of both flanges and wire rod. Petitioners argue that the
exception in flanges to the Department's new policy of normally using
invoice date as the date of sale was granted to Isibars despite the
Department's decision to implement the date of sale methodology for all
reviews initiated after April 1, 1996. Petitioners contend that Isibars
argued for, and the Department granted, an exception to this new policy
because Isibars ``provided clear evidence that sale terms were agreed
to in writing in the purchase order.'' See Certain Forged Stainless
Steel Flanges from India; Preliminary Results of Antidumping Duty New
Shipper Reviews, 61 FR 59861 (November 25, 1996).
Petitioners argue that, although the same fact pattern exists with
respect to this new shipper review on wire rod for Isibars, Isibars
argues that the Department should now apply its date-of-invoice policy.
Petitioners argue that Isibars claimed that the purchase order was the
date of sale in flanges because Isibars issued the invoice almost four
months after the POR. Petitioners argue that if the Department applied
its normal date-of-invoice policy (effective at the time of the flanges
review was initiated) to Isibars sales data, the new shipper review for
Isibars would have been terminated. Petitioners argue that while the
bar review preceded the Department's implementation of its new date of
invoice policy, the position Isibars took in the flanges review
[[Page 38979]]
followed the implementation by one month. Petitioners contend that,
despite the Department's stated change in policy regarding date of
invoice, Isibars continued to argue that purchase order was the
appropriate date of sale.
Petitioners state that, in response to its claim that the purchase
order is the proper date of sale in this review, Isibars argues that
the invoice date is the date of sale since the quantity changed up to
the time of invoice date. Petitioners contend that the ``change'' in
quantity referred to by Isibars is not a change in quantity but a
normal quantity tolerance.
Petitioners contend that the Department recognizes that its new
invoice date policy ``still provides the Department with flexibility *
* *.'' See Notice of Preliminary Determination of Sales at Less Than
Fair Value and Postponement of Final Determination: Open-End Spun Rayon
Singles Yarn from Austria, 62 FR 14400 (March 26, 1997). Petitioners
argue that in the flanges review for Isibars (which was initiated after
the Department implemented its new date-of-invoice policy), the
Department exercised its flexibility, and based date of sale on the
date of the purchase order. Petitioners argue that there is nothing
different in this review from the flanges review which would justify
switching from one methodology to another where the fact pattern is
identical. Petitioners argue that the Department's stated policy
remains that it will compare sales made at the same time. Petitioners
argue that, because establishing the proper date of sale is such a
critical part of any dumping analysis, the Department has qualified its
new date-of-invoice policy. Petitioners point out that, in the preamble
to the proposed regulations (61 FR 7308), in response to one
commentator's concerns that the use of the respondent's invoice date
could make the date of sale subject to manipulation, the Department
responded that it normally will use the date of invoice as the date of
sale, but that ``this date may not be appropriate in some circumstances
* * *.'' Antidumping Duties; Countervailing Duties; Proposed Rule, 61
FR 7308, 7330 (February 27, 1996). Petitioners also maintain that the
Department noted that, particularly during administrative reviews, it
will ``carefully scrutinize any change in record keeping'' that could
change the date of sale. Id. at 7331.
Isibars claims that the Department initiated this new shipper
review under the new date of sale methodology relying on the invoice
date and that the Department requested in its questionnaire that
Isibars use invoice date as the date of sale. Isibars argues that it
records the date of shipment as the date of sale for financial
reporting and internal purposes, and that it records sales transactions
as complete upon shipment. Isibars also asserts that the record
indicates that there are differences between ordered and shipped
quantities. Isibars maintains that the Department found no problems
with Isibars' reported dates of sale during verification.
Isibars argues that, in the bar and flanges reviews, the
Department's questionnaires instructed Isibars to report date of sale
based on order date. Isibars argues that therefore the bar and flanges
cases are not applicable to this case. Isibars claims that the contract
(order) date is not important under the invoice date methodology,
except in the case of certain long-term contracts. Isibars maintains
that the U.S. sale was not made pursuant to a long-term contract,
meaning that the invoice date is the proper date of sale even under the
legal authority petitioners cite.
Department Position: We agree with Isibars. Section 351.401(i) of
the proposed regulations (61 FR 7308) states that the Department will
normally use the date of invoice, as recorded in the exporter's or
producer's records kept in the ordinary course of business, as the date
of sale. However, the preamble to the proposed regulation indicates
that the Department has flexibility in cases in which the date of
invoice is not appropriate as the date of sale, such as situations
involving certain long-term contracts or situations in which there is
an exceptionally long lag time between the date of invoice and the date
of shipment.
On March 29, 1996, the Department implemented a new date of sale
policy based on the methodology outlined in the proposed regulations.
The new policy applied to all investigations initiated after February
1, 1996, and all reviews initiated after April 1, 1996. (See memorandum
from Susan G. Esserman dated March 29, 1996, ``Date of Sale Methodology
Under New Regulations.'') This new shipper review was initiated on
August 6, 1996, and, therefore, the invoice date of sale methodology
applies. We requested that Isibars report the invoice date as the date
of sale in our questionnaire.
As stated above, the invoice date of sale methodology provides for
changes in the date of sale in situations involving certain long-term
contracts or situations in which there is an exceptionally long lag
time between date of invoice and shipment date. Our review of the sales
process for Isibars sales indicates that there is no long-term contract
and that sales are made using only purchase orders. The lag between
purchase orders and invoices during the POR is not considered
exceptionally long. We also have found that there is little lag time
between the date of invoice and date of shipment. There are no other
circumstances present to warrant making an exception to the general
rule of using the date of invoice as the date of sale for this review.
With respect to petitioners' references to the bar and flanges
reviews, we note that each proceeding and each segment thereof is based
on the facts particular to that segment. Applying the facts of this
wire rod review to our date of sale methodology, we determine that
invoice date is the proper date of sale. For additional discussion, see
the memorandum from Joseph A. Spetrini dated July 10, 1997.
Final Results of the Review
As a result of our comparison of export price and NV, we determine
that the following weighted-average dumping margin exists:
------------------------------------------------------------------------
Manufacturer/exporter Period Margin
------------------------------------------------------------------------
Isibars..................................... 1/1/96-6/30/96 0.00
------------------------------------------------------------------------
The Department shall instruct the Customs Service to liquidate all
appropriate entries without regard to antidumping duties.
Furthermore, the following deposit requirements will be effective
for all shipments of subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of these
final results, as provided for by section 751(a)(2)(C) of the Act: (1)
The rate for the reviewed firm will be as listed above; (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 (LTFV) investigation, but the manufacturer is, the cash deposit
rate will be that rate established for the manufacturer of the
merchandise in earlier reviews or the original investigation, whichever
is the most recent; and (4) if neither the exporter nor the
manufacturer is a firm covered in this or any previous review conducted
by the Department, the cash deposit rate shall be 48.80 percent, the
``All Others'' rate established in the LTFV investigation.
This notice also serves as a final reminder to importers of their
[[Page 38980]]
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during the review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR Sec. 353.34(d). Timely written
notification of the return/destruction of APO materials or conversion
to judicial protective order is hereby requested.
Failure to comply with the regulations and terms of an APO is a
violation which is subject to sanction.
This administrative review and this notice are in accordance with
section 751(a)(2)(B) of the Act (19 U.S.C. 1675(a)(2)(B)) and 19 CFR
Sec. 353.22(h).
Dated: July 10, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-19120 Filed 7-18-97; 8:45 am]
BILLING CODE 3510-DS-P