Stainless Steel Plate in Coils from Belgium; Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on stainless steel plate in coils (SSPC) from Belgium in response to timely requests by respondent, ALZ, N.V. (ALZ) and its affiliated U.S. importer TrefilARBED, Inc. and by petitioners. This review covers shipments of this merchandise to the United States during the period of May 1, 2000 through April 30, 2001. We have preliminarily determined that U.S. sales have been made below normal value (NV). See “Preliminary Results of Review” section below for the company-specific rate. If these preliminary results are adopted in our final results, we will instruct the U.S. Customs Service (Customs) to assess antidumping duties based on the difference between constructed export price (CEP) and NV.

EFFECTIVE DATE:

June 7, 2002.

FOR FURTHER INFORMATION CONTACT:

Sally C. Gannon at (202) 482-0162, Julio Fernandez at (202) 482-0190, or Brett Royce at (202) 482-4106, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue N.W., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Applicable Statute & Regulations

Unless otherwise indicated, all citations to the statute are references to the Tariff Act of 1930 (the Act), as amended. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR Part 351 (2001).

Background

The Department published an antidumping duty order on SSPC from Belgium on May 21, 1999 (64 FR 27756). On May 1, 2001, the Department published in the Federal Register (66 FR 21740) a notice of opportunity to request an administrative review of this antidumping duty order. On May 16, 2001, in accordance with 19 CFR 351.213(b), respondent ALZ, N.V. (ALZ) and its affiliated U.S. importer TrefilARBED, Inc. (TrefilARBED), and the petitioners, Allegheny Ludlum, Corp., AK Steel Corporation, Butler Armco Independent Union, North American Stainless, Zanesville Armco Independent Union, and the United Steelworkers of America, AFL-CIO/CLC (collectively, petitioners), timely requested a review of the antidumping duty order on certain SSPC from Belgium. On June 19, 2001, we published a notice of initiation of the antidumping review of SSPC from Belgium. See 66 FR 32934.

Due to complicated issues in this case, on December 17, 2001, the Department extended to deadline for the preliminary results of this antidumping duty administrative review until no later than May 31, 2002. See Stainless Steel Plate in Coils from Belgium: Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review, 66 FR 64950 (December 17, 2001).

Scope of Review

The product covered by this order is certain stainless steel plate in coils. Stainless steel is an alloy steel containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. The subject plate products are flat-rolled products, 254 mm or over in width and 4.75 mm or more in thickness, in coils, and annealed or otherwise heat treated and pickled or otherwise descaled. The subject plate may also be further processed (e.g., cold-rolled, polished, etc.) provided that it maintains the specified dimensions of plate following such processing. Excluded from the scope of these orders are the following: (1) plate not in coils, (2) plate that is not annealed or otherwise heat treated and pickled or otherwise descaled, (3) sheet and strip, and (4) flat bars. In addition, certain cold-rolled stainless steel plate in coils is also excluded from the scope of these orders. The excluded cold-rolled stainless steel plate in coils is defined as that merchandise which meets the physical characteristics described above that has undergone a cold-reduction process that reduced the thickness of the steel by 25 percent or more, and has been annealed and pickled after this cold reduction process.

The merchandise subject to these orders is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 7219.11.00.30, 7219.11.00.60, 7219.12.00.06, 7219.12.00.21, 7219.12.00.26, 7219.12.00.51, 7219.12.00.56, 7219.12.00.66, 7219.12.00.71, 7219.12.00.81, 7219.31.00.10, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 7219.90.00.80, 7220.11.00.00, 7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the scope of the orders is dispositive.

Period of Review

The period of review (POR) is May 1, 2000 through April 30, 2001.

Verification

As provided in section 782(i) of the Act, we verified the sales and cost information provided by ALZ and TrefilARBED. We used standard verification procedures, including on-site inspection of the manufacturer's facilities and the examination of relevant sales and financial records. Our verification results are outlined in the public and proprietary versions of the verification reports, which are on file in the Central Records Unit (CRU), room B-099 of the main Department building.

Date of Sale

ALZ reported invoice date as the date of sale. Invoice date is also the Department's presumptive date for date of sale. See section 351.401(i) of the Department's regulations and Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Plate in Coils from Belgium, 64 FR 15476 (March 31, 1999) (SSPC Final Determination). In the original investigation, we determined that invoice date was the proper date of sale in both markets. For purposes of this review, we also have examined whether invoice date or some other date better represents the date on which the material terms of sale were established. The Department has examined sales documentation, including order confirmations and invoices, provided by ALZ and TrefilARBED for its home market and U.S. sales, and has preliminarily found that the material terms of sale are set as of the invoice date in both markets. Specifically, changes in price and quantity may occur after the initial order confirmation date, and up to the invoicing date. See Sales and Cost Verification of ALZ, N.V.: Antidumping Administrative Review on Stainless Steel Plate in Coils from Belgium, from Julio A. Fernandez, through Sally C. Gannon, to the File (May 24, 2002), at page 5. See also Sales Verification of TrefilARBED, Inc.: Antidumping Administrative Review on Stainless Steel Plate in Coils from Belgium, from Julio A. Fernandez and Brett L. Royce, through Sally C. Gannon, to the File (May 30, 2002), at page 11. As such, pursuant to section 351.401(i) of the Department's regulations, we preliminarily determine that invoice date is the appropriate date of sale for both the home and U.S. markets in this administrative review because it better reflects the date upon which the material terms of sale were finally established.

Normal Value Comparisons

To determine whether sales of SSPC from Belgium to the United States were made at less than NV, we compared the CEP to the NV for ALZ as specified in the “Constructed Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to individual U.S. transactions.

Constructed Export Price

We calculated CEP, in accordance with section 772(b) of the Act, because sales to the first unaffiliated purchaser took place after importation into the United States.

We based CEP on the packed ex-warehouse or delivered prices to unaffiliated purchasers in the United States. We made deductions for billing adjustments (adjustment for freight and adjustments for customer claims), where applicable, and further processing expenses. We also made deductions for the following movement expenses, where appropriate, in accordance with section 772(c)(2)(A) of the Act: foreign inland freight, foreign inland insurance (including marine insurance), international freight (including foreign brokerage), U.S. inland freight from port to warehouse, U.S. inland insurance, U.S. brokerage and handling, U.S. warehouse expenses, U.S. inland freight from warehouse to unaffiliated customer and U.S. Customs duty. In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (credit costs), inventory carrying costs, and indirect selling expenses. We also deducted the profit allocated to these expenses, in accordance with sections 772(d)(3) and 772(f) of the Act.

Normal Value

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared the volume of ALZ's home market sales of the foreign like product to the volume of U.S. sales of subject merchandise, in accordance with section 773(a)(1) of the Act. Based on this comparison, we determined that the aggregate volume of ALZ's home market sales of the foreign like product is greater than five percent of the aggregate volume of ALZ's U.S. sales. Thus, we determined that ALZ had a viable home market during the POR. Consequently, we based NV on home market sales.

Pursuant to section 773(b)(2)(A)(ii) of the Act, there were reasonable grounds to believe or suspect that ALZ had made home market sales at prices below its cost of production (COP) in this review because the Department had disregarded sales that failed the cost test in the original investigation. See SSPC Final Determination. See also Stainless Steel Plate in Coils from Belgium: Final Results of Antidumping Duty Administrative Review, 66 FR 56272 (November 7, 2001), and Issues and Decision Memorandum for Final Results of Antidumping Duty Administrative Review of Stainless Steel Plate in Coils from Belgium, from Joseph A. Spetrini, Deputy Assistant Secretary for AD/CVD Enforcement III, to Faryar Shirzad, Assistant Secretary for Import Administration, dated November 7, 2001 (wherein ALZ's margin was based on total adverse facts available). Therefore, the Department initiated an investigation to determine whether ALZ made home market sales during the POR at prices below its COP. Accordingly, we calculated the COP based on the sum of respondent's cost of materials and fabrication for the foreign like product, plus amounts for selling, general and administrative expenses (“SG&A”) and packing costs, in accordance with section 773(b)(3) of the Act.

For these preliminary results, we recalculated respondent's reported COP based on information obtained during verification. See Memorandum to the File from Julio A. Fernandez through Sally C. Gannon Regarding Analysis of ALZ, N.V., dated May 31, 2002, for a discussion of the business proprietary facts underlying this conclusion. We compared the COP figures to home market sales of the foreign like product as required under section 773(b) of the Act, in order to determine whether these sales had been made at prices below the COP. On a product-specific basis, we compared the COP to home market prices, less any applicable movement charges and discounts.

In determining whether to disregard home market sales made at prices below the COP, we examined (1) whether, within an extended period of time (i.e., one year), such sales were made in substantial quantities, and (2) whether such sales were made at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of the respondent's sales of a given product were at prices less than the 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 the respondent's sales of a given product during the POR were at prices less than the COP, we determined such sales to have been made in substantial quantities within an extended period of time in accordance with section 773(b)(1)(A) of the Act. In such cases, because we compared prices to POR weight-averaged costs, we also determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act. Therefore, we disregarded the below-cost sales.

In accordance with section 773(a)(4) of the Act, we used constructed value (CV) as the basis for NV when there were no contemporaneous sales of identical or similar merchandise in the comparison market that passed the cost test. We calculated CV, in accordance with section 773(e) of the Act, based on the sum of ALZ's cost of materials, fabrication, SG&A, profit, and U.S. packing costs. In accordance with section 773(e)(2)(A) of the Act, we based SG&A and profit on the actual amounts incurred and realized by ALZ in connection with the production and sale of the foreign like product in the ordinary course of trade, for consumption in the foreign country. For selling expenses, we used the average of the selling expenses reported for home market sales that passed the cost test, weighted by the total quantity of those sales.

We calculated NV based on prices to unaffiliated home market customers. We made deductions for billing adjustments (adjustment when customer picks up the merchandise), early payment discounts, inland freight, and inland insurance. In accordance with section 773(a)(6), we deducted home market packing costs and added U.S. packing costs and U.S. credit expenses.

Level of Trade

In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade (LOT) as the CEP transaction. The NV LOT is that of the starting-price sales in the comparison market. Further, in identifying levels of trade for export price (EP) and comparison-market sales (i.e., NV based on either home-market or third-country prices), we consider the starting prices before any adjustments. For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. March 7, 2001).

To determine whether NV sales are at a different level of trade than CEP, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison-market sales are at a different LOT, and the difference involves the performance of different selling activities and is demonstrated to 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, we make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in the levels between NV and CEP affects price comparability, we adjust NV under section 773(a)(7)(B) of the Act (the CEP-offset provision). See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-61733 (November 19, 1997).

In this case, ALZ requested that the Department adjust NV to account for different levels of trade in the home market and the U.S. market. However, the information on the record does not justify treating CEP sales and home market sales as sales at different levels of trade. Because much of the information on LOT is business proprietary, our analysis is set forth in a Memorandum to the File from Julio A. Fernandez through Sally C. Gannon Regarding Level of Trade Analysis for ALZ, N.V. (May 31, 2002) (LOT Analysis Memo) (public version on file in the Department's CRU). Because we found that the home market LOT did not differ from the CEP LOT, we preliminarily did not make a LOT adjustment, or, as requested by respondent, a CEP offset for sales by ALZ in Belgium which are compared with CEP sales in the United States.

Currency Conversion

We made currency conversions into U.S. dollars based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank, in accordance with section 773A of the Act.

Preliminary Results of Review

As a result of our review, we preliminarily determine the antidumping margin for ALZ, for the period May 1, 2000 through April 30, 2001, to be as follows:

The Department will disclose, in accordance with 19 CFR 351.224(b), its calculations to interested parties within 5 days of the date of public announcement of these results, or if no public announcement, within 5 days of publication of this notice. Any interested party may request a hearing within 30 days of publication in accordance with 19 CFR 351.310(c). Unless otherwise notified by the Department, any hearing, if requested, will be held 37 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 in accordance with 19 CFR 351.309(c)(1)(ii). Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 35 days after the date of publication. 19 CFR 351.309(d). Unless the due date for the final results is extended, 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, not later than 120 days after the date of publication of this notice.

Upon issuance of the final results of this review, the Department shall determine, and the U.S. Customs Service (Customs) shall assess, antidumping duties on all appropriate entries. We have calculated importer-specific ad valorem assessment rates for ALZ based on entered values. We will direct Customs to assess this ad valorem rate against the entered value on all appropriate entries. Upon completion of this review, the Department will issue assessment instructions directly to Customs.

Furthermore, the following deposit requirements will be effective upon publication of the final results of these reviews for all shipments of stainless steel plate in coils from Belgium 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 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 investigation of sales at LTFV 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 9.86 percent, the “all others” rate made effective by the LTFV investigation. See SSPC Final Determination. 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 § 351.402(f)(2) 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 issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.