Brass Sheet and Strip From Canada: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of antidumping duty administrative review.

SUMMARY:

In response to a request by Hussey Copper Ltd., The Miller Company, Olin Corporation, Outokumpu American Brass, 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 (“Local 56”), and the United Steel Workers of America (“AFL-CIO/CLC”) (collectively the “Petitioners”), 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 Tube (Canada), Inc., (“Wolverine”). The period covered is January 1, 1998, through December 31, 1998. As a result of the review, the Department has preliminarily determined that a dumping margin exists for this respondent for the covered period.

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 the issue and (2) a brief summary of the argument.

EFFECTIVE DATE:

February 8, 2000.

FOR FURTHER INFORMATION CONTACT:

Paige Rivas or Nithya Nagarajan, Antidumping/Countervailing Duty Enforcement, Import Administration, Office IV, Group II , International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-0651 or 482-5253, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce's regulations refer to the regulations codified at 19 CFR Part 351 (1999).

Background

The Department of Commerce (“the Department”) published an antidumping duty order on brass sheet and strip from Canada on January 12, 1987 (52 FR 1217). On January 14, 1999, the Department published a notice of “Opportunity to Request an Administrative Review” of the antidumping duty order on brass sheet and strip from Canada (64 FR 2470). On January 29, 1999, the Petitioners requested an administrative review of Wolverine's exports of the subject merchandise to the United States for the period January 1, 1998 through December 31, 1998. In accordance with 19 CFR 351.213 we published a notice of initiation of the review on February 22, 1999 (64 FR 8542). The Department is now conducting this administrative review in accordance with section 751 of the Act.

On April 22, 1999, we issued an antidumping questionnaire to Wolverine. Wolverine submitted the response to Sections A, B, C, and D on July 9, 1999. On July 29, 1999, the Petitioners submitted comments with respect to Wolverine's questionnaire which response.

We issued a supplemental questionnaire to Wolverine on October 13, 1999. The response to this supplemental questionnaire was submitted by Wolverine on November 12, 1999. On December 2, 1999, the Petitioners submitted comments with respect to Wolverine's supplement questionnaire response.

On December 20, 1999 we issued a second supplemental questionnaire to Wolverine. Wolverine filed its response to the second supplemental questionnaire which was received on January 11, 2000.

On January 28, 2000, the Department issued its third supplemental questionnaire to Wolverine. The response to the supplemental questionnaire is not due until after the preliminary results are completed. Therefore, we will take that response into account for the final results of review.

Under section 751(a)(3)(A) of the Act, the Department may extend the deadline for issuing a preliminary determination in an administrative review if it determines that it is not practicable to complete the preliminary review within the statutory time limit of 245 days. On October 19, 1999, the Department published a notice of extension of the time limit for the preliminary results in this case to January 31, 2000. See Brass Sheet and Strip from Canada: Time Limit, 64 FR 56308 (October 19, 1999).

Scope of Review

The product covered by this review is 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 wound), 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 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 period of review (“POR”) is January 1, 1998, through December 31, 1998. The review involves one manufacturer/exporter, Wolverine.

United States Price (“USP”)

In calculating the price to the United States, we used export price (“EP”) as defined in section 772(a) of the Act because the subject merchandise was sold to unaffiliated U.S. purchasers in the United States prior to the date of importation into the United States and the use of constructed export price was not indicated by the facts of the record.

We calculated EP based on prices that were for merchandise delivered to the customers' premises. In accordance with section 772(c)(1) of the Act, we adjusted the gross USP for U.S. brokerage and handling, foreign and U.S. inland freight, and customs duty. 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)(B) of the Act. Because 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 (“COP”) in the 1997 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 COP, within the meaning of section 773(b)(2)(A)(ii) of the Act. See Notice of Final Results of Review and Intent Not to Revoke Order in Part: Brass Sheet and Strip from Canada, 64 FR 46344 (August 25, 1999) (“BS&S 1997”). Therefore, pursuant to section 773(b)(1) of the Act, we initiated a COP investigation of sales by Wolverine. 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 the 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. To conduct this test, we compared model-specific COPs to the reported home market prices less any applicable movement charges.

Pursuant to section 773(b)(2)(C) of the Act, where less than twenty percent of Wolverine's home market sales of 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 of a particular model 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. Differences in Levels of Trade (“LOT”)

In accordance with section 773(a)(1)(B)(i) of the Act and the Statement of Administrative Action (“SAA”) at 829-831, to the extent practicable, the Department will calculate NV based on sales at the same LOT as the U.S. sales. When the Department is unable to find sales in the comparison market at the same LOT as the U.S. sale(s), the Department may compare sales in the U.S. and foreign market at different LOTs, and adjust NV if appropriate. The NV LOT is that of the starting-price sales in the home market. As the Department explained in Gray Portland Cement and Clinker From Mexico: Final Results of Antidumping Duty Administrative Review, 62 FR 17148, 17156 (April 9, 1997), for both EP and CEP, the relevant transaction for the LOT analysis is the sale from the exporter to the importer.

To determine whether comparison market NV sales are at a different LOT than the U.S. sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and 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 a LOT adjustment under section 773(a)(7)(A) of the Act. 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, 61732 (November 17, 1997), and Granular Polytetrafluoroethylene Resin From Italy; Preliminary Results of Antidumping Duty Administrative Review, 63 FR 25826 (May 11, 1998).

In its questionnaire responses, Wolverine stated that there were no significant differences in its selling activities by customer categories between markets. Therefore, Wolverine did not distinguish between LOTs for this review and did not claim a LOT adjustment. Our analysis of the questionnaire responses detailing the selling functions (e.g., strategic and economic planning; technical support; engineering services; procurement services; packing; computer, legal, accounting, audit, and/or business-systems development; and freight and delivery arrangements) provided by Wolverine in the U.S. and home markets leads us to conclude that sales in those markets are not made at different LOTs. Accordingly, we preliminarily find that all sales in the home market and the U.S. market were made at the same LOT. Therefore, all price comparisons are at the same LOT and no adjustment pursuant to section 773(a)(7) of the Act is necessary. For a complete discussion, see Preliminary Results Analysis Memo (“Analysis Memo”), dated January 31, 2000, on file in the Central Records Unit, Room B-099 of the main Commerce Department Building.

D. Model-Matching

We calculated NV using prices of BSS products having the same characteristics as to form, temper, gauge, width, and alloy as the U.S. products. We used the same gauge and width groupings and the same model-match methodology in this review as in the last completed administrative review. See BS&S 1997. Also, see Analysis Memo.

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 LOT as the export price, as defined by section 773(a)(1)(B)(i) of the Act.

We reduced NV for warranty and home market credit expenses, and increased NV for U.S. credit 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 in accordance with section 773(a)(6)(A).

Preliminary Results of the Review

As a result of our comparison of EP to NV, we preliminarily determine that a 3.33 percent dumping margin exists for Wolverine for the period January 1, 1998, through December 31, 1998.

Assessment

The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b), we have calculated exporter/importer-specific assessment rates. We divided the total dumping margins for the reviewed sales by the total entered value of those reviewed sales for each importer. We will direct the U.S. Customs Service to assess the resulting percentage margin against the entered customs values for the subject merchandise on each of that importer's entries under the relevant order during the review period.

Cash Deposit

The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(1) of the Act: (1) The cash deposit rate for Wolverine, the sole respondent covered by this review, will be the rate established in the final results of this administrative review; (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 these reviews, a prior review, or the original LTFV investigations, 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 continue to be 8.10 percent, the “all others” rate established in the LTFV investigations. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative reviews.

Pursuant to 19 CFR 351.224(b), the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the publication of this notice. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Case briefs must be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, must be submitted no later than five days after the time limit for filing case briefs. Parties who submit argument in this proceeding are requested to submit with the argument: (1) A statement of the issue, and (2) a brief summary of the argument. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments to be raised in the case and rebuttal briefs. Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs, that is, thirty-seven days after the date of publication of these preliminary results. The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any case or rebuttal brief or at a hearing not later than 120 days after the date of publication of these preliminary results.

Notification to Parties

This notice also 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 notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.