[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Notices]
[Pages 20225-20227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11248]



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DEPARTMENT OF COMMERCE
[A-412-810]


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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review; Certain Hot-Rolled Lead and Bismuth Carbon Steel 
Products from the United Kingdom.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain hot-
rolled lead and bismuth carbon steel products from the United Kingdom 
in response to requests by respondent, United Engineering Steels 
Limited (UES), and petitioner, Inland Steel Bar Company. This review 
covers the period March 1, 1994 through February 28, 1995.
    We have preliminarily determined that sales have been made below 
normal value (NV). Interested parties are invited to comment on these 
preliminary results. Parties who submit comments are requested to 
submit with each comment (1) a statement of the issue and (2) a brief 
summary of the comment.

EFFECTIVE DATE: May 6, 1996.

FOR FURTHER INFORMATION CONTACT: G. Leon McNeill or Maureen Flannery, 
Office of Antidumping Compliance, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4733.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

SUPPLEMENTAL INFORMATION:

Background

    The Department published in the Federal Register the antidumping 
duty order on certain hot-rolled lead and bismuth carbon steel products 
from the United Kingdom on March 22, 1993 (58 FR 15324). On March 7, 
1995, we published in the Federal Register (60 FR 12540) a notice of 
opportunity to request an administrative review of the antidumping duty 
order on certain hot-rolled lead and bismuth carbon steel products from 
the United Kingdom covering the period March 1, 1994 through February 
28, 1995.
    In accordance with 19 CFR 353.22(a)(1), UES and the petitioner 
requested that we conduct an administrative review of UES's sales. We 
published a notice of initiation of this antidumping duty 
administrative review on April 14, 1995 (60 FR 19017). The Department 
is conducting this administrative review in accordance with section 751 
of the Act.

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 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 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, 60.00; 7213.39.00.30, 00.60, 00.90; 7214.40.00.10, 
00.30, 00.50; 7214.50.00.10, 00.30, 00.50; 7214.60.00.10, 00.30, 00.50; 
and 7228.30.80.00. HTSUS subheadings are provided for convenience and 
Customs purposes. The written description of the scope of this order 
remains dispositive.
    This review covers the subject merchandise manufactured by UES, and 
the period March 1, 1994 through February 28, 1995.

United States Price

    We used export price (EP) for sales to the United States, as 
defined in section 772(a) of the Act, because the merchandise was sold 
to unaffiliated U.S. purchasers prior to the date of importation. UES 
reported that EP was based on packed, delivered prices to customers in 
the United States. We made deductions, where applicable, for cash 
discounts, foreign inland freight, FOB charges in the United Kingdom,

[[Page 20226]]

ocean freight, marine insurance, U.S. Customs duties, brokerage and 
handling charges, and U.S. inland freight charges, in accordance with 
19 CFR 353.41(d). We also made an adjustment for invoice corrections 
(billing adjustments) made after shipment. Because there is a 
concurrent review of the countervailing duty order on the subject 
merchandise, final assessments for UES will reflect the final results 
of the countervailing duty administrative review in accordance with 19 
CFR 353.41(d)(iv).
    UES's sales in the United Kingdom and to the United States were 
made in quantities of less than 25 metric tons and more than 25 metric 
tons. As we have done in all prior segments of the proceeding (see 
Final Determination of Sales at Less Than Value; Certain Hot-Rolled 
Lead and Bismuth Carbon Steel Products, 58 FR 6207, January 27, 1993, 
and Preliminary Results of Antidumping Duty Administrative Review; 
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from the 
United Kingdom, 50 FR 10063, February 23, 1995), the Department, where 
possible, matched U.S. and U.K. sales within two quantity groups: one 
of 25 tons or more, and one of less than 25 tons.
    No other adjustments to EP were claimed or allowed.

Normal Value

    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 UES'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)(B) of the Act. Because UES'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 UES, pursuant to section 
773(a)(1)(B) of the Act.
    Many of UES's home market sales were made to affiliated original 
equipment manufacturers (OEMs). It is the Department's practice, in 
situations where home market sales are made to affiliated parties, to 
determine whether sales to affiliated parties might be appropriate to 
use as the basis of NV by comparing prices of those sales to prices of 
sales to unaffiliated parties, on a model-by-model basis. Because UES 
made home market sales to affiliated OEMs during the POR, we tested 
these OEM sales to ensure that, on average, the affiliated-party sales 
were made at arm's length. To conduct this test, we compared the gross 
unit prices of sales to affiliated and unaffiliated customers net of 
all movement charges, direct selling expenses, invoice corrections, 
rebates and packing. As a result of our arm's-length test, we 
disregarded sales to the affiliated OEM customers in the home market. 
We did not require respondent to provide downstream sales by these 
customers because these customers manufactured the subject merchandise 
into merchandise not comparable to the merchandise covered by the 
order. UES also sold through affiliated resellers to unaffiliated 
customers and reported these unaffiliated-customer transactions. We 
used these unaffiliated transactions in our determination of NV.

Cost of Production Analysis

    In the prior administrative review of UES, we disregarded from our 
calculations UES's home market sales found to be below the cost of 
production (COP). Therefore, in accordance with section 
773(b)(2)(A)(ii) of the Act, the Department has reasonable grounds to 
believe or suspect that sales below the COP may have occurred during 
this review period. Thus, pursuant to section 773(b) of the Act, in 
this review we initiated a COP investigation of UES.
    Before making any fair value comparisons, we conducted the COP 
analysis described below.
A. Calculation of COP
    We calculated the COP based on the sum of UES's cost of materials 
and fabrication employed in producing the foreign like product, plus 
amounts for home market selling, general, and administrative expenses 
(SG&A) and packing costs in accordance with section 773(b)(3) of the 
Act. We relied on the home market sales and COP information provided by 
UES in its questionnaire responses.
B. Test of Home Market Prices
    After calculating COP, we tested whether home market sales of lead 
and bismuth steel were made at prices below COP within an extended 
period of time in substantial quantities, and whether such prices 
permit recovery of all costs within a reasonable period of time. We 
compared model-specific COP to the reported home market prices less any 
applicable movement charges, rebates, and direct and indirect selling 
expenses.
C. Results of COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of 
respondent's sales of a given product were at prices less than COP, we 
did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product during the period of review (POR) were at prices less 
than the COP, we disregarded the below-cost sales because we determined 
that the below-cost sales were made within an extended period of time 
in ``substantial quantities'' in accordance with sections 773(b)(2) (B) 
and (C) of the Act, and because we determined that the below-cost sales 
of the product were at prices which would not permit recovery of all 
costs within a reasonable period of time, as defined in section 
773(b)(2)(D) of the Act. Where all sales of a specific product were at 
prices below the COP, we disregarded all sales of that product, and 
calculated NV based on constructed value (CV), in accordance with 
section 773(b)(1) of the Act.

Price-to-Price Comparisons

    Pursuant to section 777A(d)(2), we compared the EPs of individual 
transactions to the monthly weighted-average price of sales of the 
foreign like product where there were sales at prices above COP, as 
discussed above. We based NV on packed, delivered prices to 
unaffiliated purchasers in the home market. We made adjustments, where 
applicable, in accordance with section 773(a)(6) of the Act. Where 
applicable, we made adjustments to home market price for invoice 
corrections, rebates, and inland freight. We also made a circumstance-
of-sale adjustment for differences in credit insurance and product 
liability insurance expenses pursuant to section 773(1)(6)(iii) of the 
Act. Respondent claimed home market credit insurance expenses and 
product liability insurance as direct adjustments to normal value. 
However, respondent did not identify, as the Department's questionnaire 
requested, how these expenses were directly related to sales of the 
foreign like product. Therefore, consistent with our previous decisions 
on this issue (see Final Determination of Sales at Less than Fair 
Value; Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from 
the United Kingdom, 58 FR 6207, January 27, 1993, and Preliminary 
Results of Antidumping Duty Administrative Review; Certain Hot-Rolled 
Lead and Bismuth Carbon Steel Products from the United Kingdom, 60 FR 
10063, February 23, 1995), we have treated these home market expenses 
as indirect selling expenses. Accordingly, we made the circumstance-of-
sale adjustments for indirect expenses by adding the amounts of credit 
insurance and the product liability insurance for each U.S. sale to the 
NV. In order to adjust for

[[Page 20227]]

differences in packing between the two markets, we increased home 
market price by U.S. packing costs and reduced it by home market 
packing costs. Prices were reported net of value added taxes (VAT) and, 
therefore, no deduction for VAT was necessary. We made adjustments, 
where appropriate, for physical differences in merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act.

Constructed Value

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of UES's cost of materials and fabrication employed in 
producing the subject merchandise, SG&A and profit incurred and 
realized in connection with production and sale of the foreign like 
product, and U.S. packing costs. In accordance with section 
773(e)(2)(A), we based SG&A and profit on the amounts incurred and 
realized by UES in connection with the production and sale of the 
foreign like product in the ordinary course of trade, for consumption 
in the foreign country. We used the costs of materials, fabrication, 
and general and administrative expenses as reported in the CV portion 
of UES's questionnaire response. We used the U.S. packing costs as 
reported in the U.S. sales portion of UES's questionnaire response. We 
based selling expenses and profit on the information reported in the 
home market sales portion of UES's questionnaire response. See Certain 
Pasta from Italy; Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination, 61 FR 1344, 
1349 (January 19, 1996). For selling expenses, we used the average per-
unit home market selling expenses of above-cost sales weighted by the 
total quantity sold. For actual profit, we first calculated the 
difference between the home market sales value and home market COP, for 
all above-cost home market sales, and divided the sum of these 
differences by the total home market COP for these sales. We then 
multiplied this percentage by the COP for each U.S. model to derive an 
actual profit.

Commission Offset

    Because there are commissions on U.S. sales and not on home market 
sales, we made an adjustment for indirect selling expenses in the home 
market to offset the U.S. commissions. We applied the offset to NV or 
CV, as appropriate, in accordance with 19 CFR 353.56(b)(1).
    We based the commission offset amount on the amount of the home 
market indirect selling expenses. We limited the home market indirect 
selling expense deduction by the amount of the commissions incurred on 
sales to the United States.

Preliminary Results of the Review

    As a result of our comparison of EP and NV, we preliminarily 
determine that the following weighted-average dumping margin exists:

----------------------------------------------------------------------------------------------------------------
                                                                                                        Margin  
                             Manufacturer/Exporter                                     Period         (percent) 
----------------------------------------------------------------------------------------------------------------
United Engineering Steels, Limited (UES), (now British Steel, Engineering                                       
 Steels Limited)...............................................................      3/1/94-2/28/95         1.26
----------------------------------------------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within 5 days of 
the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held 44 days after the publication of this notice, 
or the first workday thereafter. Interested parties may submit case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 37 days after the date of 
publication. Parties who submit comments are requested to submit with 
their comments (1) a statement of the issue and (2) a brief summary of 
the comment. The Department will publish a notice of final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such comments.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between EP and NV may vary from the percentage stated 
above. Upon completion of this review, the Department will issue 
appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of the final results of this administrative review for all 
shipments of certain hot-rolled lead and bismuth carbon steel products 
from the United Kingdom entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a)(2)(c) of the Act: (1) The cash deposit rate for the 
reviewed company will be the rate established in the final results of 
this review; (2) for merchandise exported by manufacturers or exporters 
not covered in these reviews but covered in the original less-than-
fair-value (LTFV) investigation or a previous review, the cash deposit 
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 or a 
previous review, or the original LTFV 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) 
for all other producers and/or exporters of this merchandise, the cash 
deposit rate shall be 25.82 percent, the ``all others'' rate 
established in the LTFV investigation.
    These deposit rates, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26 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 notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)) and 19 CFR 353.22.

    Dated: April 26, 1996.
Paul L. Joffe,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 96-11248 Filed 5-3-96; 8:45 am]
BILLING CODE 3510-DS-P