Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of antidumping duty administrative review.
The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain forged stainless steel flanges (stainless steel flanges) from India (A-533-809) manufactured by Echjay Forgings Ltd. (Echjay), Isibars Ltd. (Isibars), Panchmahal Steel Ltd. (Panchmahal), Patheja Forgings and Auto Parts Ltd. (Patheja), and Viraj Forgings Ltd. (Viraj). The period of review (POR) covers the period February 1, 1999, through January 31, 2000. We preliminarily determine that sales of stainless steel flanges have been made below the normal value (NV) for some of the respondents. If these preliminary results are adopted in our final results of administrative review, we will instruct the U.S. Customs Service to assess antidumping duties based on the difference between United States price and the NV. Interested parties are invited to comment on these preliminary results. Parties who submit argument in these proceedings are requested to submit with the argument (1) a statement of the issues and (2) a brief summary of the argument.
March 9, 2001.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Thomas Killiam, Steve Bezirganian, or Robert James, AD/CVD Enforcement, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, telephone: (202) 482-5222, (202) 482-1131, or (202) 482-0649, respectively.
Applicable Statute and Regulations: Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Tariff Act) are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR part 351 (April 1, 2000).End Further Info End Preamble Start Supplemental Information
On February 9, 1994, the Department published the antidumping duty order on stainless steel flanges from India (59 FR 5994). On February 14, 2000, the Department published the notice of “Opportunity to Request Administrative Review” for this order covering the period February 1, 1999 through January 31, 2000 (65 FR 7348). In accordance with 19 CFR 351.213 (b)(1), Echjay requested a review of its sales, and the petitioners requested reviews of Isibars, Panchmahal, Patheja, and Viraj. The petitioners are Gerlin Inc., Ideal Forging Corporation, and Maas Flange Corporation. On March 30, 2000, the Department published in the Federal Register a notice of initiation of these antidumping duty administrative reviews covering the period February 1, 1999 through January 31, 2000 (65 FR 16875). The initiation notice also listed Pushpaman Exports: through subsequent correspondence with the company officials we determined that Pushpaman and Echjay are one and the same entity.
On August 16, 2000, we published in the Federal Register our notice of the continuation of the antidumping duty order on stainless steel flanges from India (65 FR 49964), which referenced the findings of the Department and of the International Trade Commission with respect to the sunset review of this order.
On November 2, 2000, we extended the time limit for the preliminary results of this administrative review to February 28, 2001 (65 FR 65835).
Scope of the Reviews
The products under review are certain forged stainless steel flanges, both finished and not finished, generally manufactured to specification ASTM A-182, and made in alloys such as 304, 304L, 316, and 316L. The scope includes five general types of flanges. They are weld-neck, used for butt-weld line connection; threaded, used for threaded line connections; slip-on and lap joint, used with stub-ends/butt-weld line connections; socket weld, used to fit pipe into a machined recession; and blind, used to seal off a line. The sizes of the flanges within the scope range generally from one to six inches; however, all sizes of the above-described merchandise are included in the scope. Specifically excluded from the scope of this order are cast stainless steel flanges. Cast stainless steel flanges generally are manufactured to specification ASTM A-351. The flanges subject to this order are currently classifiable under subheadings 7307.21.1000 and 7307.21.5000 of the Harmonized Tariff Schedule (“HTS”). Although the HTS subheading is provided for convenience and customs purposes, the written description of the merchandise under review is dispositive of whether or not the merchandise is covered by the review.
The POR is February 1, 1999, through January 31, 2000.
As provided in section 782(i) of the Tariff Act, we verified information provided by Panchmahal and Viraj, using standard verification procedures, the examination of relevant sales and financial records, and selection of original documentation containing relevant information. Our verification results are outlined in the public versions of the verification reports, on file in Room B-099 in the main Commerce building.
Use of Facts Available
Section 776(a)(2) of the Tariff Act provides that, “if an interested party or any other person—(A) withholds information that has been requested by the administering authority; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782; (C) significantly Start Printed Page 14128impedes a proceeding under this title; or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority * * * shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.” Pursuant to section 776(a) of the Tariff Act, we have determined that the use of facts available is appropriate in determining the preliminary dumping margin for Patheja.
Patheja failed to respond to our April 7, 2000 questionnaire, and our May 9 and July 11, 2000 queries. Consequently, Patheja has withheld requested information and significantly impeded this proceeding, warranting use of facts available under section 776(a). Moreover, as Patheja has supplied no information, sections 782(d) and (e) are inapplicable. By not responding to our requests, Patheja did not cooperate to the best of its ability. Section 776(b) of the Tariff Act provides that the Department may use adverse inferences, including information derived from the petition, in selecting facts otherwise available, if a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. See also Statement of Administrative Action (SAA) accompanying the URAA, H.R. Rep. No. 103-316 at 829-831 and 870 (1994).
Because we were unable to calculate margins for this respondent, we have assigned it the highest margin from any segment of this proceeding. See e.g., Certain Cased Pencils from the People's Republic of China; Preliminary Results and Rescission In Part of Antidumping Duty Administrative Review, 66 FR 1638, 1640, (January 9, 2001).
The highest margin for flanges from India is 210 percent. See Amended Final Determination and Antidumping Duty Order; Certain Forged Stainless Steel Flanges from India, 59 FR 5994 (February 9, 1994) (the Order). This margin was based on the petition.
Section 776(c) of the Tariff Act provides that when the Department relies on secondary information (such as the petition) in using the facts otherwise available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The SAA clarifies that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value (see SAA at 870). The SAA also states that independent sources used to corroborate such evidence may include, for example, published price lists, official import statistics and U.S. Customs Service data, and information obtained from interested parties during the particular investigation (see SAA at 870. Thus, to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.
To assess the reliability of the petition margin, in accordance with section 776(c) of the Tariff Act, to the extent practicable, we examined the key elements of the calculations of export price and normal value upon which the petitioners based their margins for the petition. The U.S. prices in the petition were based on quotes to U.S. customers, most of which were obtained through market research. See Petition for the Imposition of Antidumping Duties, December 29, 1993. We were able to corroborate the U.S. prices in the petition by comparing these prices to publicly available information based on IM-145 import statistics. See Memorandum from Thomas Killiam, Case Analyst to the File, Corroboration of Petition Rate for Use as Facts Available, February 14, 2001.
The normal values in the petition were based on actual price quotations obtained through market research. The Department did not receive any useful information from Patheja or other interested parties and is aware of no other independent sources of information that would enable it to corroborate the margin calculations in the petition further. We note that four Indian manufacturers currently have a 210% rate under this order.
The implementing regulation for section 776 of the Tariff Act, codified at 19 CFR 351.308(d), states, “(t)he fact that corroboration may not be practicable in a given circumstance will not prevent the Secretary from applying an adverse inference as appropriate and using the secondary information in question.” Additionally, the SAA at 870 states specifically that, where “corroboration may not be practicable in a given circumstance,” the Department may nevertheless apply an adverse inference. The SAA at 869 emphasizes that the Department need not prove that the facts available are the best alternative information. Therefore, based on our efforts, described above, to corroborate information contained in the petition and in accordance with 776(c) of the Tariff Act, which discusses facts available and corroboration, we consider the margins in the petition to be corroborated to the extent practicable for purposes of these preliminary determinations (see CTL Plate from Mexico, 64 FR at 84).
For sales of all respondents in the United States, we used export price (EP) in accordance with sections 772(a) and 772(b) of the Tariff Act, as the merchandise was sold directly to the first unaffiliated purchaser prior to importation and constructed export price (CEP) was not otherwise warranted based on the facts of record. We based EP on the packed C&F, CIF duty paid, FOB, or ex-dock duty paid prices to the first unaffiliated purchasers in the United States. We added to U.S. price amounts for duty drawback, when reported, pursuant to section 772(c)(1)(B) of the Tariff Act. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Tariff Act, including: foreign inland freight, foreign brokerage and handling, bank export document handling charges, ocean freight, and marine insurance.
In order to determine whether there is sufficient volume of sales in the home market to serve as a viable basis for calculating NV (i.e., the aggregate volume of home market sales of the foreign like product during the POR is equal to or greater than five percent of the aggregate volume of U.S. sales of subject merchandise during the POR), for each respondent we compared the volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise. We found no reason to determine that quantity was not the appropriate basis for these comparisons, so value was not used. See 351.404(b)(2).
We based our comparisons of the volume of U.S. sales to the volume of home market and third country sales on reported stainless steel flange weight, rather than on number of pieces. The record demonstrates that there can be large differences between the weight (and corresponding cost and price) of stainless steel flanges based on relative sizes, so comparisons of aggregate data would be distorted for these products if volume comparisons were based on the number of pieces.
Because the volume of Viraj's and Echjay's home market sales were less than five percent of the volume of their U.S. sales, we determined that the home markets was not viable for them. Based on Viraj's questionnaire response, we determined that Germany was the appropriate comparison market, given that the German market was viable and that the volume of sales to that market exceeded the volume of sales to any Start Printed Page 14129other third country market. Based on Echjay's questionnaire response, we determined that the United Kingdom was the appropriate comparison market, given that the U.K. market was viable and that the volume of sales to that market exceeded the volume of sales to any other third country market.
Isibars indicated that Austria was a viable comparison market, and submitted an Austria sales database. However, since the volume of POR sales in that sales file was less than five percent of the volume of sales Isibars reported in its U.S. sales file, Austria was not a viable comparison market. Consequently, pursuant to section 351.404(f) of the Department's regulations, for Isibars we based NV on constructed value (CV), as there does not appear to be a viable comparison market. Because Panchmahal's volume of home market sales of the foreign like product was less than five percent of its U.S. sales volume, pursuant to 19 CFR 351.404(f) we based NV on CV.
B. Arm's Length Sales
Since no information on the record indicates any sales to affiliates, we did not use an arm's-length test for comparison market sales.
C. Cost of Production Analysis
The petitioners in this proceeding filed timely sales-below-cost allegations with regard to Isibars, Panchmahal, and Viraj. See petitioners' letters of June 19, June 26, and July 6, 2000. The petitioners' allegations were based on the respondents' questionnaire responses. We found that petitioners' methodology provided the Department with a reasonable basis to believe or suspect that sales in the home market had been made at prices below the COP. Accordingly, pursuant to section 773(b)(1) of the Tariff Act, we initiated investigations to determine whether the three companies' sales of flanges were made at prices below COP during the POR. See memoranda from Thomas Killiam, Case Analyst, to Richard Weible, Office Director, Petitioners' Allegation of Sales Below the Cost of Production, dated July 6, 2000 (Viraj) and July 11, 2000 (Panchmahal, Isibars).
Each respondent defined its unique products, and thus its costs, based on different product characteristics. We determined that only grade, type, size, pressure rating, and finish were required to define models for purposes of matching. To make the model definitions for the cost test identical to those in the model match, we used the above criteria to define models and recalculate costs. We performed these calculations for Isibars and Viraj, respondents subject to cost investigations or for which difference of merchandise adjustments and/or use of CV might be required. We used the cost information provided by these respondents, and also, where necessary, we converted costs from a per-piece basis to a per-kilogram basis.
No such cost recalculations were required for Echjay, because its U.S. sales matched identically to comparison market sales, and no cost investigation is being conducted for Echjay.
No redefinition of models was required for Panchmahal because its models (CONNUMs) had been defined using the same five criteria listed above. See the Department's company-specific analysis memoranda for Echjay, Isibars, Panchmahal, and Viraj, dated concurrently with this notice and available in the Central Records Unit.
In accordance with section 773(b)(3) of the Tariff Act, for Viraj we calculated COP based on the sum of the costs of materials and fabrication employed in producing the foreign like product, plus selling, general, and administrative expenses (SG&A) and packing. We relied on the home market sales and COP information provided by Viraj except where otherwise noted in this notice and in the Department's Preliminary Analysis Memoranda.
After calculating COP, we tested whether home market sales of stainless steel flanges were made at prices below COP within an extended period of time in substantial quantities and whether such prices permit the recovery of all costs within a reasonable period of time. We compared model-specific COPs to the reported home market prices less movement charges, discounts, and rebates.
Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than 20 percent of a respondent's home market sales for a model are at prices less than the COP, we do not disregard any below-cost sales of that model because we determine that the below-cost sales were not made within an extended period of time in “substantial quantities.” Where 20 percent or more of a respondent's home market sales of a given model are at prices less than COP, we disregard the below-cost sales because they are (1) made within an extended period of time in substantial quantities in accordance with sections 773(b)(2)(B) and (C) of the Tariff Act, and (2) based on comparisons of prices to weighted-average COPs for the POR, were at prices which would not permit the recovery of all costs within a reasonable period of time in accordance with section 773(b)(2)(D) of the Tariff Act.
The results of our cost test for Viraj indicated that for certain comparison market models, less than 20 percent of the sales of the model were at prices below COP. We therefore retained all sales of these comparison market models in our analysis and used them as the basis for determining NV. Our cost test also indicated that within an extended period of time (one year, in accordance with section 773(b)(2)(B) of the Tariff Act), for certain comparison market models, more than 20 percent of the comparison market sales were sold at prices below COP. In accordance with section 773(b)(1) of the Tariff Act, we therefore excluded these below-cost sales from our analysis and used the remaining above-cost sales as the basis for determining NV.
As noted above, neither Isibars nor Panchmahal had a viable comparison market, and therefore we conducted no cost test for these companies.
D. Product Comparisons
We compared Echjay's U.S. sales with contemporaneous sales of the foreign like product in the United Kingdom; Isibars' and Panchmahal's U.S. sales with constructed value; and Viraj's U.S. sales with contemporaneous sales of the foreign like product in Germany. As noted, we considered stainless steel flanges identical based on the following five criteria: grade, type, size, pressure rating, and finish. We used a 20 percent difference-in-merchandise (difmer) cost deviation cap as the maximum difference in cost allowable for similar merchandise, which we calculated as the absolute value of the difference between the U.S. and comparison market variable costs of manufacturing divided by the total cost of manufacturing of the U.S. product.
E. Level of Trade
In accordance with section 773(a)(1)(B) of the Tariff Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade (LOT) as the EP or CEP transaction. The LOT in the comparison market 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 expenses and profit. With respect to U.S. price for EP transactions, the LOT is also that of the starting-price sale, which is usually from the exporter to the importer. For CEP, the LOT is that of the sale from the exporter to the importer.
To determine whether comparison market sales are at a different level of trade than U.S. sales, we examined stages in the marketing process and Start Printed Page 14130selling functions along the chain of distribution between the producer and the unaffiliated customer. In analyzing the selling activities of the respondents, we did not note any significant differences in functions provided in any of the markets. Based upon the record evidence, we have determined that for each respondent there is one LOT for all EP sales, the same LOT as for all comparison market sales. Accordingly, because we find the U.S. sales and comparison market sales to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) is warranted.
F. Comparison Market Price
We based comparison market prices on the packed, ex-factory or delivered prices to the unaffiliated purchasers in the comparison market. We made adjustments for differences in packing and for movement expenses in accordance with sections 773(a)(6)(A) and (B) of the Tariff Act. In addition, we made adjustments for differences in cost attributable to differences in physical characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii) of the Tariff Act, and for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410. For comparison to EP we made COS adjustments by deducting comparison market direct selling expenses and adding U.S. direct selling expenses.
In accordance with section 773(a)(4) of the Tariff Act, we based NV on CV if we were unable to find a contemporaneous comparison market match for the U.S. sale. As noted, we recalculated the reported cost used for the determination of CV. We calculated CV based on the cost of materials and fabrication employed in producing the subject merchandise, SG&A, and profit. In accordance with 773(e)(2)(A) of the Tariff Act, we based SG&A expenses and profit on the amounts incurred and realized by the respondent 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 weighted-average comparison market selling expenses. Where appropriate, we made COS adjustments to CV in accordance with section 773(a)(8) of the Tariff Act and 19 CFR 351.410. We also made adjustments, where applicable, for comparison market indirect selling expenses to offset commissions in EP comparisons.
As noted above, for Isibars and Panchmahal, we based NV on CV because there were no viable comparison markets. Because there was no viable comparison market upon which to base SG&A and profit expenses for these two respondents, we based SG&A, interest expense, and profit on the Echjay*s audited public financial statements for the year ended March 31, 1999, in accordance with section 773(e)(2)(B)(iii) of the Tariff Act.
Preliminary Results of Review
As a result of our reviews, we preliminarily determine the weighted-average dumping margins for the period February 1, 1999, through January 31, 2000, to be as follows:
The Department will disclose calculations performed within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication. See CFR 351.310(c). Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date per 19 CFR 351.310(d). Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in the case briefs and comments, may be filed no later than 35 days after the date of publication of this notice. Parties who submit argument in these proceedings are requested to submit with the argument (1) a statement of the issue, (2) a brief summary of the argument and (3) a table of authorities. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette. The Department will issue final results of these administrative reviews, including the results of our analysis of the issues raised in any such written comments or at a hearing, within 120 days of publication of these preliminary results.
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)(1), we will calculate assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the POR to the total quantity (in kilograms) of the sales used to calculate those duties. This rate will be assessed uniformly on all entries of merchandise of that manufacturer/exporter made during the POR. The Department will issue appropriate appraisement instructions directly to the Customs Service upon completion of the review.
Furthermore, the following deposit requirements will be effective upon completion of the final results of these administrative reviews for all shipments of flanges from India entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Tariff Act: (1) The cash deposit rates for the reviewed companies will be the rates established in the final results of administrative 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 most recent rate published in the final determination or final results for which the manufacturer or exporter received a company-specific rate; (3) if the exporter is not a firm covered in these reviews, or the original investigation, but the manufacturer is, the cash deposit rate will be that established for the manufacturer of the merchandise in the final results of these reviews, or the LTFV investigation; and (4) if neither the exporter nor the manufacturer is a firm covered in these or any previous reviews, the cash deposit rate will be 162.14 percent, the “all others” rate established in the LTFV investigation (59 FR 5994, February 9, 1994).
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' presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act. Effective January 20, 2001, Bernard T. Carreau is fulfilling the duties of the Assistant Secretary for Import Administration.Start Signature
Dated: February 28, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-5916 Filed 3-8-01; 8:45 am]
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