30058 Federal Register / Vol. 65, No. 91 / Wednesday, May 10, 2000 / Notices

1The petitioners in this proceeding are Heyco

Metals, Inc., Olin Corporation, PMX Industries, Inc.,

Revere Copper Products, Inc., International

Association of Machinists and Aerospace Workers,

United Auto Workers (Local 2367), and the United

Steelworkers of America (AFL–CIO/CLC).

2Section A of the questionnaire requests general

information concerning a company’s corporate

structure and business practices, the subject

merchandise under review, and the sales of the

foreign like product in all of its markets. Sections

B and C of the questionnaire request comparison

market sales listings and U.S. sales listings,

respectively. Section D requests additional

information about the cost of production of the

foreign like product and constructed value of the

merchandise under review.

U.S. Department of Commerce, Export

Assistance Center, 250 Montgomery

Street, 14th Floor, San Francisco, CA

94104–3406

Office of the Executive Secretary,

Foreign-Trade Zones Board, Room

4008, U.S. Department of Commerce,

14th & Pennsylvania Avenue, NW.,

Washington, DC 20230

Dated: May 1, 2000.

Dennis Puccinelli,

Acting Executive Secretary.

[FR Doc. 00–11738 Filed 5–9–00; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

INTERNATIONAL TRADE

ADMINISTRATION

(A–421–701)

Notice of Preliminary Results of

Antidumping Duty Administrative

Review: Brass Sheet and Strip From

the Netherlands

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of

antidumping duty administrative

review.

SUMMARY: The Department of Commerce

(the Department) is conducting an

administrative review of the

antidumping duty order on brass sheet

and strip from the Netherlands. This

review covers imports of brass sheet and

strip from one producer/exporter during

the period of review (POR), August 1,

1998 through July 31, 1999.

We preliminarily determine that sales

of the subject merchandise have not

been made below normal value (NV). If

these preliminary results are adopted in

the final results, we will instruct the

U.S. Customs Service not to assess

antidumping duties on the subject

merchandise exported by this company.

EFFECTIVE DATE: May 10, 2000.

FOR FURTHER INFORMATION CONTACT: John

Brinkmann or Jarrod Goldfeder, AD/

CVD Enforcement, Office 6, Group II,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW, Washington,

DC 20230; telephone: (202) 482–4126 or

(202) 482–2305, 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.

In addition, unless otherwise indicated,

all citations to the Department’s

regulations refer to the regulations

codified at 19 CFR Part 351 (1999).

Background

On August 12, 1988, the Department

published in the Federal Register the

antidumping duty order on brass sheet

and strip from the Netherlands (53 FR

30455). On August 11, 1999, we

published in the Federal Register the

notice of ‘‘Opportunity to Request an

Administrative Review’’ of this order,

for the period August 1, 1998 through

July 31, 1999 (64 FR 43649). On August

31, 1999, in accordance with 19 CFR

351.213(b), Outokumpu Copper Strip

B.V. (OBV), the sole producer/exporter,

and the petitioners 1 requested an

administrative review of OBV’s exports

of the subject merchandise to the United

States during this POR. OBV also

requested that the Department revoke

the antidumping duty order against

brass sheet and strip from the

Netherlands, pursuant to 19 CFR

351.222(b), based on the absence of

dumping and the fact that OBV is not

likely to sell the subject merchandise at

less than NV in the future. OBV

subsequently withdrew its revocation

request on April 4, 2000. On September

24, 1999, in accordance with 19 CFR

351.221(b), the Department initiated this

administrative review (see Initiation of

Antidumping and Countervailing Duty

Administrative Reviews and Requests

for Revocation in Part, 64 FR 53318

(October 1, 1999)).

On October 4, 1999, the Department

issued an antidumping questionnaire 2

to OBV. OBV submitted its response to

sections A, B, and C in November 1999.

The Section D questionnaire response

was received in December 1999. The

Department issued Section A, B, and C

supplemental questionnaires in

February 2000 and received responses

in March 2000. The Department issued

and received a response to the Section

D supplemental questionnaire in April

2000.

Scope of Review

Imports covered by this review are

brass sheet and strip, other than leaded

and tin brass sheet and strip, from the

Netherlands. The chemical composition

of the products under review is

currently defined in the Copper

Development Association (CDA) 200

Series or the Unified Numbering System

(UNS) C2000 series. This review does

not cover products the chemical

compositions of which are defined by

other CDA or UNS series. The physical

dimensions of the products covered by

this review are brass sheet and strip of

solid rectangular cross section over

0.006 inch (0.15 millimeter) through

0.188 inch (4.8 millimeters) in gauge,

regardless of width. Included in the

scope are coiled, wound-on-reels

(traverse wound), and cut-to-length

products. The merchandise under

review is currently classifiable under

item 7409.21.00 and 7409.29.20 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 merchandise

under review is dispositive.

Product Comparisons

In accordance with section 771(16) of

the Act, the Department first attempted

to match contemporaneous sales of

products sold in the U.S. and home

markets that were identical with respect

to the following characteristics: (1) Type

(alloy); (2) gauge (thickness); (3) width;

(4) temper; (5) coating; and (6) packed

form. Where there were no sales of

identical merchandise in the home

market to compare with U.S. sales, we

compared U.S. sales with the most

similar product based on the

characteristics listed above, in

descending order of priority.

For purposes of the preliminary

results, we have calculated the

adjustment for differences in

merchandise based on the difference in

the variable cost of manufacturing

between each U.S. model and the most

similar home market model selected for

comparison.

Comparisons to Normal Value

To determine whether OBV’s sales of

brass sheet and strip were made to the

United States at less than NV, the

Department compared the export price

(EP) to the NV, as described in the

‘‘Export Price’’ and ‘‘Normal Value’’

sections of this notice. In accordance

with section 777A(d)(2) of the Act, the

Department calculated monthly

Federal Register / Vol. 65, No. 91 / Wednesday, May 10, 2000 / Notices 30059

3 In the immediately preceding review, we found

that in the ordinary course of business, OBV

accounts for metal as a pass-through item.

Specifically, OBV requires its customers to

purchase the metal inputs prior to fabrication. As

a service to its customers, OBV purchases the

metals on the customer’s behalf. OBV then bills the

customer for the cost of metals, the terms of which

are set forth on the finished brass sales invoice. The

parties determine the price of the metals at a metal

fix date, which occurs prior to the invoice dates for

sales of finished brass. Since OBV purchases the

metal and then passes on the cost of the metal to

the customer, the company records and recognizes

the cost of this purchased metal in its accounting

system. See Brass 97/98 Final Results, 65 FR at 747.

4Originally, OBV reported costs on a quarterly

basis. See OBV’s Section D questionnaire response,

dated December 1, 1999. Based on our request in

a supplemental cost questionnaire, OBV provided

cost data files that had costs reported on both a

quarterly and a monthly basis.

weighted-average prices for NV and

compared these to individual U.S.

transactions.

Export Price

For the price to the United States, we

used EP in accordance with section

772(a) of the Act, because the subject

merchandise was sold to an unaffiliated

U.S. purchaser prior to the date of

importation and CEP methodology was

not otherwise warranted.

We calculated EP based on the

packed, delivered prices to unaffiliated

purchasers in the United States. In

accordance with section 772(c)(2) of the

Act, where appropriate, we deducted

from the starting price international

freight expense, marine insurance, U.S.

brokerage and handling expenses, and

U.S. Customs duties.

Normal Value

A. Selection of Comparison Market

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 OBV’s

volume of home market sales of the

foreign like product to the volume of its

U.S. sales of the subject merchandise.

Since OBV’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 was viable

pursuant to section 773(a) of the Act.

Therefore, in accordance with section

773(a)(1)(B)(i) of the Act, we based NV

on the price at which the foreign like

products were first sold in the home

market, in the usual commercial

quantities and in the ordinary course of

trade.

B. Cost of Production Analysis

Because we disregarded sales that

failed the cost test in the most recently

completed review, we had reasonable

grounds to believe or suspect that sales

of the foreign like product under

consideration for determining NV in

this review may have been made at

prices below the cost of production

(COP), as provided in section

773(b)(2)(A)(ii) of the Act. See Notice of

Final Results of Antidumping Duty

Administrative Review and

Determination Not to Revoke the

Antidumping Duty Order: Brass Sheet

and Strip from the Netherlands, 65 FR

742, 743 (January 6, 2000) (Brass 97/98

Final Results). Therefore, pursuant to

section 773(b)(1) of the Act, we initiated

a COP investigation of sales by OBV.

1. Calculation of COP

In accordance with section 773(b)(3)

of the Act, we calculated COP based on

the sum of the respondent’s cost of

materials and fabrication employed in

producing the foreign like product, plus

the costs for selling, general, and

administrative expenses (SG&A),

including interest expense, and packing

costs.

We relied on the home market sales

and COP information that OBV

provided in its questionnaire responses.

Furthermore, we have calculated

weighted-average monthly metal costs

based on ‘‘metal fix prices.’’ 3 For

fabrication costs, we have used

weighted-average annual costs. In

addition, we computed SG&A on an

annual basis as a ratio of the total SG&A

expenses divided by the cost of sales.

Use of Monthly Metal Cost Data. OBV

calculated and reported monthly perunit manufacturing costs for metal

because of the significant fluctuation in

metal input prices (i.e., copper and zinc)

throughout the POR. 4 In the

immediately preceding review, the

Department calculated weighted-average

monthly metal costs based on metal fix

prices, and used weighted-average

annual fabrication costs to calculate

COP and constructed value (CV). See

Brass 97/98 Final Results, 65 FR at 743.

We explained in that review that OBV’s

reported metal costs make up a

significant portion of the total cost of

manufacturing brass sheet and strip, and

that the market values of these inputs

fluctuated sharply from the beginning to

the end of the POR.

Our normal practice for a respondent

in a country that is not experiencing

high inflation is to calculate a single

weighted-average cost for the entire POR

except in unusual cases where this

preferred method would not yield an

appropriate comparison. See, e.g., Final

Determination of Sales at Less than Fair

Value: Brass Sheet and Strip From

Netherlands, 53 FR 23431, 23432 (June

22, 1988) (Brass LTFV Final

Determination) (dividing the period of

investigation into three periods because

of the significant metal price

fluctuations during that period); Final

Results of Antidumping Administrative

Review: Brass Sheet and Strip from

Italy, 52 FR 9235, 9236 (March 17, 1992)

(Brass Sheet and Strip from Italy) (using

monthly costs to resolve the distortive

effects the fluctuating metal prices had

on the margin calculations); Final

Determination of Sales at Less than Fair

Value: Static Random Access Memory

Semiconductors from Taiwan, 63 FR

8909, 8925 (February 23, 1998) (the

Department will utilize shorter cost

periods if markets experience significant

and consistent price declines); Final

Determination of Sales at Less than Fair

Value: Dynamic Random Access

Memory Semiconductors of One

Megabit and Above from the Republic of

Korea, 58 FR 15467, 15476 (March 23,

1993) (determining that the Department

may use weighted-average costs of

shorter periods where there exists a

consistent downward trend in both U.S.

and home market prices during the

period); Final Determination of Sales at

Less than Fair Value: Erasable

Programable Read Only Memories from

Japan, 51 FR 39680, 39682 (October 30,

1986) (finding that significant changes

in the COP during a short period of time

due to technological advancements and

changes in production process justified

the use of weighted-average costs of less

than a year); and Final Results of

Antidumping Duty Administrative

Review of Brass Sheet and Strip from

Canada and Revocation, in Part, of the

Antidumping Duty Order, 56 FR 57317,

57318 (November 8, 1991) (using

monthly metal costs to calculate

differences in merchandise

adjustments).

We have reviewed the information on

the record of this review and find that

both OBV’s sales prices for the subject

merchandise and the cost of metal used

in the manufacture of this merchandise

displayed an overall pattern of

significant and consistent decline

during the first half of the POR and a

pattern of overall significant and sharp

incline during the second half of the

POR. As in the immediately preceding

review, we believe that computing a

single annual weighted-average cost

under these circumstances would

distort the results of the cost test since

(1) the metal costs represent a

significant percentage of the total cost of

producing brass sheet and strip; (2) the

cost of the metal fluctuated significantly

30060 Federal Register / Vol. 65, No. 91 / Wednesday, May 10, 2000 / Notices

throughout the POR; and (3) those metal

costs are treated as pass-through items

when brass is sold to customers. In

order to avoid this distortion, we have

preliminarily relied upon the submitted

monthly weighted-average metal costs

rather than calculating single weightedaverage annual costs.

We find that using monthly weightedaverage metal costs, rather than

quarterly or annual weighted-average

costs, is the most appropriate method in

this proceeding for several reasons.

First, the record indicates that the price

of metal fluctuated sharply on a

monthly basis. See the proprietary

memorandum from Geoffrey Craig to

John Brinkmann, ‘‘Analysis of Metal

Costs,’’ dated May 2, 2000, on file in the

Central Records Unit (CRU), Room B–

099 of the Main Commerce Building. In

this regard, by using the weightedaverage monthly metal fix cost based on

the company’s metal fix date, we are

able to make a contemporaneous

comparison of metal values which

results in a more accurate calculation of

the margin of dumping in this case than

using either quarterly or annual

weighted-average costs. We also note

that this method conforms with the

manner in which OBV accounts for its

metal transactions in its normal

accounting records, which are kept in

accordance with home market generally

accepted accounting principles (GAAP).

Specifically, the company records metal

costs in its accounting system on the

date on which the price of metal is

fixed. This is consistent with section

773(f)(1)(A) of the Act, which provides

that the Department normally calculates

costs based on the exporter’s or

producer’s records, as long as such

records are kept in accordance with the

GAAP of the exporting (or producing)

country and reasonably reflect the costs

associated with the production and sale

of the merchandise.

Therefore, we compared monthly

weighted-average COP figures for OBV,

adjusted where appropriate, to home

market sales of the foreign like product

in the same month in which the metal

price was fixed in order to determine

whether these sales had been made at

prices below the COP.

Startup Adjustment.—OBV claimed a

startup adjustment to costs pursuant to

section 773(f)(1)(C) of the Act, covering

a nine-month startup period from

January 1998 through September 1998

for its new continuous strip casting line,

which replaced OBV’s ring casting mill.

In the preceding review, we determined

that the start-up period ended on May

31, 1998, based upon evidence that OBV

reached commercial production levels

as of that date. See Brass 97/98 Final

Results, 65 FR at 744–45. During the

course of this review we have not

received any new evidence, nor has

OBV made any new arguments, that

would persuade us to change our prior

determination on this issue.

Accordingly, in the current review, we

preliminarily determine that OBV is not

entitled to a start-up adjustment because

we continue to find that the start-up

period ended on May 31, 1998, a date

which is prior to the start of the current

review period. See the proprietary

Memorandum from Stan Bowen to the

File, ‘‘Analysis of Start-up Period,’’

dated May 2, 2000, on file in the CRU.

Consistent with the previous review, we

have continued to amortize the

capitalized startup costs and included a

portion of the amortized costs in the

calculation of COP. See Brass 97/98

Final Results, 65 FR at 743.

2. Test of Home Market Prices

After calculating COP, we tested to

see whether home market sales of

subject brass sheet and strip 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 of time. We compared modelspecific COP to the reported home

market prices less any applicable

movement charges, discounts and

rebates, where appropriate.

3. Results of COP Test

Pursuant to section 773(b)(2)(C) of the

Act, where less than 20 percent of

OBV’s home market sales for a model

were at prices less than the COP, we did

not disregard below-cost sales of that

model because the Department

determined that the below cost sales

were not made within an extended

period of time in ‘‘substantial

quantities.’’ Where 20 percent or more

of OBV’s home market sales of a given

product 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)(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 COP for

the POR. When we found that belowcost sales had been made in ‘‘substantial

quantities’’ and were not at prices

which would permit recovery of all

costs within a reasonable period of time,

we disregarded the below-cost sales in

accordance with section 773(b)(1) of the

Act.

While we disregarded some belowcost sales, sufficient sales remained that

passed the cost test in the current

review. Therefore, it was unnecessary to

calculate CV in this case.

C. Level of Trade (LOT)

In accordance with section

773(a)(1)(B) of the Act, to the extent

practicable, the Department determines

NV based on sales in the comparison

market at the same LOT as the EP

transaction or, if applicable, 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 SG&A

and profit. For EP, the U.S. LOT is also

the level of the starting-price sale,

which is usually from the exporter to

the importer.

To determine whether comparison

market sales are at different LOTs than

EP or CEP sales, the Department

examines stages in the marketing

process and selling functions along the

chain of distribution between the

producer and the unaffiliated (or arm’s

length) customers. If the comparisonmarket sales are at a different LOT, and

the differences affect 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, the

Department makes a LOT adjustment

under section 773(a)(7)(A) of the Act.

In this review, all of OBV’s U.S. sales

have been categorized as EP sales. OBV

claims that the Department can match

U.S. sales to identical sales at the same

LOT in the home market and therefore

a LOT adjustment is not necessary. OBV

manufactures to order and ships directly

to original equipment manufacturers

(OEMs) in the United States and home

market, and also ships directly to a

home market trading company. In order

to determine (1) whether the two home

market customer categories constituted

one LOT or distinct LOTs, and (2)

whether U.S. sales were made at the

same LOT as sales in the home market,

we examined OBV’s questionnaire

responses with regard to its distribution

system, including selling functions,

class of customer and selling expenses.

To determine whether there was more

than one LOT in the home market, we

examined the chain of distribution and

the selling activities associated with

sales reported by OBV to its two home

market customer categories (i.e., OEMs

and trading company). We found that

the two home market customer

categories did not differ significantly

from each other with respect to selling

activities, although there were slight

Federal Register / Vol. 65, No. 91 / Wednesday, May 10, 2000 / Notices 30061

differences between them for sales

process/marketing support and freight

and delivery. Based on our analysis, we

found that the two home market

categories constituted one LOT.

OBV reported EP sales to its

unaffiliated U.S. customers in one

customer category, OEMs, which we

determined to constitute one LOT. To

determine whether U.S. sales were

made at the same LOT as sales in the

home market, we compared the channel

of distribution and the selling activities

associated with sales reported by OBV

to the single LOT in the Netherlands

and that in the United States, and found

that the LOT in these two markets were

the same. Therefore, all price

comparisons are at the same LOT and a

LOT adjustment pursuant to section

773(a)(7)(A) of the Act is unwarranted.

D. Calculation of Normal Value Based

on Home-Market Prices

Where appropriate, we deducted

early-payment discounts, rebates, inland

freight expense (plant-to-customer),

inland insurance, and packing expense

from the home market price in

accordance with section 773(a)(6)(B) of

the Act. We made adjustments, where

appropriate, for differences in credit

expenses between the U.S. and home

market sales in accordance with section

773(a)(6)(C)(iii) of the Act.

We increased NV by U.S. packing

expenses in accordance with section

773(a)(6)(A) of the Act. To the extent

there were comparisons of U.S.

merchandise to home market

merchandise that were not identical but

similar, the Department made

adjustments to NV for differences in

physical characteristics of the

merchandise pursuant to section

773(a)(6)(C)(ii) of the Act.

Currency Conversion

For purposes of these preliminary

results, we made currency conversions

in accordance with section 773A(a) of

the Act, based on the official exchange

rates published by the Federal Reserve.

Section 773A(a) of the Act directs the

Department to use a daily exchange rate

in order to convert foreign currencies

into U.S. dollars, unless the daily rate

involves a ‘‘fluctuation.’’ In accordance

with the Department’s practice, we have

determined as a general matter that a

fluctuation exists when the daily

exchange rate differs from a benchmark

by 2.25 percent. The benchmark is

defined as the rolling average of rates for

the past 40 business days. When we

determine that a fluctuation exists, we

substitute the benchmark for the daily

rate.

Preliminary Results of Review

As a result of our review, we

preliminarily determine that the

following percentage weighted-average

margin exists for the period August 1,

1998 through July 31, 1999:

Manufacturer/exporter Margin

(percent)

OBV ............................................ zero.

We will disclose the calculations used

in our analysis to parties to this

proceeding within five days of the

publication date of this notice. See 19

CFR 351.224(b). Any interested party

may request a hearing within 30 days of

the date of publication of this notice.

See 19 CFR 351.310(c). Any hearing, if

requested, 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 date of

publication of this notice. Parties who

submit case briefs in this proceeding

should provide a summary of the

arguments not to exceed five pages and

a table of statutes, regulations, and cases

cited. Rebuttal briefs, limited to issues

raised in the case briefs, may be filed

not later than 7 days after the date of

filing of case briefs. 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 written

comments or at a hearing, if requested,

within 120 days from the publication of

these preliminary results.

Assessment Rate

Upon completion of this review, the

Department will issue appraisement

instructions to the U.S. Customs

Service. If these preliminary results are

adopted in our final results, we will

instruct the U.S. Customs Service to

liquidate all entries subject to this

review without regard to antidumping

duties.

If these preliminary results are not

adopted in the final results, we will

instruct the U.S. Customs Service to

assess antidumping duties on all

appropriate entries covered by this

review if any importer-specific

assessment rates calculated in the final

results of this review are above de

minimins (i.e., at or above 0.5 percent).

For assessment purposes, we intend to

calculate importer-specific assessment

rates for the subject merchandise by

aggregating the dumping margins for all

U.S. sales to each importer and dividing

the amount by the total entered value of

the sales to that importer.

Cash Deposit Requirements

As a result of a Sunset Review of brass

sheet and strip from the Netherlands,

the Department has revoked the

antidumping duty order for this case,

effective January 1, 2000. See

Revocation of Antidumping Duty

Orders: Brass Sheet and Strip From the

Republic of Korea, the Netherlands, and

Sweden, 65 FR 25305 (May 1, 2000).

Therefore, we have instructed the

Customs Service to terminate

suspension of liquidation for all entries

of subject merchandise made on or after

January 1, 2000. We will issue

additional instructions directing the

Customs Service to liquidate all entries

of brass sheet and strip made on or after

January 1, 2000, without regard to

antidumping duties.

Entries of subject merchandise made

prior to January 1, 2000, will continue

to be subject to suspension of

liquidation and antidumping duty

deposit requirements. The Department

will complete any pending reviews of

this order and will conduct

administrative reviews of subject

merchandise entered prior to the

effective date of revocation in response

to appropriately filed requests for

review.

Notification to Importers

This notice serves as a preliminary

reminder to importers of their

responsibility under 19 CFR 351.402 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 determination is issued and

published in accordance with sections

751(a)(1) and 777(i)(1) of the Act.

Dated: May 2, 2000.

Troy H. Cribb,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 00–11599 Filed 5–9–00; 8:45 am]

BILLING CODE 3510–DS–P