Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary determination of sales at not less than fair value.
We preliminarily determine that structural steel beams from Italy are not being, nor are likely to be, sold in the United States at less than fair value, as provided in section 733(b) of the Tariff Act of 1930, as amended.
Interested parties are invited to comment on this preliminary determination. Since we are postponing the final determination, we will make our final determination not later than 135 days after the date of publication of this preliminary determination in the Federal Register.
December 28, 2001.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Alysia Wilson or Michael Strollo, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-0108 or (202) 482-0629, respectively.End Further Info End Preamble Start Supplemental Information
The Applicable Statute
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. In addition, unless otherwise indicated, all citations to the Department of Commerce (“Department's”) regulations are to 19 CFR part 351 (April 2001).
Since the initiation of this investigation (Initiation of Antidumping Duty Investigations: Structural Steel Beams From the People's Republic of China, Germany, Italy, Luxembourg, Russia, South Africa, Spain, and Taiwan, 66 FR 33048 (June 20, 2001)) (Initiation Notice), the following events have occurred.
On July 9, 2001, the United States International Trade Commission (“ITC”) preliminarily determined that there is a reasonable indication that imports of structural steel beams from Italy are materially injuring the United States industry (see ITC Investigation Nos. 731-TA-935-942 (Publication No. 3438)).
On July 18, 2001, we selected Duferdofin SpA (“Duferdofin”), the largest producer/exporter of structural steel beams from Italy, as the mandatory respondent in this proceeding. For further discussion, see the memorandum to Louis Apple, Director, Office 2, from the Team Regarding: Respondent Selection, dated July 18, 2001. We subsequently issued the antidumping questionnaire to Duferdofin on July 18, 2001.
During the period August through November 2001, the Department received responses to the Department's Start Printed Page 67186original and supplemental questionnaires.
On September 25, 2001, pursuant to 19 CFR 351.205(e), the petitioners made a timely request to postpone the preliminary determination. We granted this request on October 2, 2001, and postponed the preliminary determination until no later than November 30, 2001. (See Notice of Postponement of Preliminary Determinations of Sales at Less Than Fair Value: Structural Steel Beams from the People's Republic of China, Germany, Italy, Luxembourg, Russia, South Africa, Spain and Taiwan, 66 FR 51639 (October 10, 2001).) On October 30, 2001, the petitioners made another timely request to postpone the preliminary determination for an additional 19 days. We granted this request on October 31, 2001, and postponed the preliminary determination until no later than December 19, 2001. (See Notice of Postponement of Preliminary Antidumping Duty Determinations: Structural Steel Beams from the People's Republic of China, Germany, Italy, Luxembourg, Russia, South Africa, Spain and Taiwan, 66 FR 56078 (November 6, 2001).)
Postponement of Final Determination
Pursuant to section 735(a)(2) of the Act, on December 18, 2001, the petitioners requested that, in the event of a negative preliminary determination in this investigation, the Department postpone its final determination until not later than 135 days after the date of the publication of the preliminary determination in the Federal Register. In accordance with 19 CFR 351.210(b), because our preliminary determination is negative and no compelling reasons for denial exist, we are granting the petitioners' request and are postponing the final determination until no later than 135 days after the publication of this notice in the Federal Register.
Scope of Investigation
The scope of these investigations covers doubly-symmetric shapes, whether hot- or cold-rolled, drawn, extruded, formed or finished, having at least one dimension of at least 80 mm (3.2 inches or more), whether of carbon or alloy (other than stainless) steel, and whether or not drilled, punched, notched, painted, coated, or clad. These structural steel beams include, but are not limited to, wide-flange beams (“W” shapes), bearing piles (“HP” shapes), standard beams (“S” or “I” shapes), and M-shapes. All the products that meet the physical and metallurgical descriptions provided above are within the scope of these investigations unless otherwise excluded. The following products are outside and/or specifically excluded from the scope of these investigations: (1) Structural steel beams greater than 400 pounds per linear foot, (2) structural steel beams that have a web or section height (also known as depth) over 40 inches, and (3) structural steel beams that have additional weldments, connectors or attachments to I-sections, H-sections, or pilings; however, if the only additional weldment, connector or attachment on the beam is a shipping brace attached to maintain stability during transportation, the beam is not removed from the scope definition by reason of such additional weldment, connector or attachment.
The merchandise subject to this investigation is classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheadings 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 7228.70.3040, and 7228.70.6000. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.
In accordance with the preamble to our regulations (see Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), we set aside a period of time for parties to raise issues regarding product coverage and encouraged all parties to submit comments within 20 calendar days of publication of the Initiation Notice (see 66 FR 33048-33049). Interested parties submitted such comments by July 10, 2001. Additional comments were subsequently submitted by interested parties.
Pursuant to the Department's solicitation of scope comments in the Initiation Notice, interested parties in this and the concurrent structural steel beams investigations request that the following products be excluded from the scope of the investigations: (1) Beams of grade A913/65 and (2) forklift mast profiles.
With respect to the scope-exclusion requests for the A913/65 beam and forklift mast profiles, the interested parties rely upon 19 CFR 351.225(k)(2) and reason that, in general, these products differ from the structural steel beams covered by the scope of the investigations in terms of physical characteristics, ultimate uses, purchaser expectations, channels of trade, manner of advertising and display and/or price. They also argue that these products are not produced by the petitioners.
In considering whether these products should be included within the scope of the investigations, we analyzed the arguments submitted by all of the interested parties in the context of the criteria enumerated in the court decision Diversified Products Corp. v. United States, 572 F. Supp. 883, 889 (CIT 1983) (“Diversified”). For these analyses, we relied upon the petition, the submissions by all interested parties, the International Trade Commission's (“ITC”) preliminary determination, and other information.
After considering the respondent's comments and the petitioners' objections to the exclusion requests regarding the A913/65 beam, we find that the description of this grade of structural steel beam is dispositive such that further consideration of the criteria provided in their submissions is unnecessary. Furthermore, the description of the merchandise contained in the relevant submissions pertaining to this grade of beam does not preclude this product from being within the scope of the investigations. Accordingly, we preliminarily determine that the A913/65 beam does not constitute a separate class or kind of merchandise and, therefore, falls within the scope as defined in the petition.
With respect to forklift mast profiles, having considered the comments we received from the interested parties and the criteria enumerated in Diversified, we find that the profiles in question, being doubly-symmetric and having an I-shape, fall within the scope of the investigations. These profiles also meet the other criteria included in the scope language contained in the petition. While the description by the interested party requesting the exclusion indicates some differences, such as in price, between forklift mast profiles and structural steel beams, these differences are not sufficient to recognize forklift mast profiles as a separate class or kind of merchandise. However, given these differences between forklift mast profiles and structural steel beams, we preliminarily determine that forklift mast profiles should be separately identified for model-matching purposes.
We also received a scope-exclusion request by an interested party for fabricated steel beams. This request was subsequently withdrawn pursuant to an agreement with the petitioners to clarify the scope language by adding that “* * * beams that have additional weldments, connectors or attachments to I-sections, H-sections, or pilings are outside the scope definition.” However, Start Printed Page 67187“* * * if the only additional weldment, connector or attachment on the beam is a shipping brace attached to maintain stability during transportation, the beam is not removed from the scope definition by reason of such additional weldment, connector or attachment.” Accordingly, we modified the scope definition to account for this clarification. See the “Scope” section above.
We have addressed these scope-exclusion requests in detail in a Memorandum to Louis Apple and Laurie Parkhill, Directors, AD/CVD Enforcement Group I, Offices 2 and 3, respectively, from The Structural Steel Beams Teams Re: Scope Exclusion Requests, dated December 19, 2001.
Period of Investigation
The period of investigation (“POI”) is April 1, 2000, through March 31, 2001.
Fair Value Comparisons
To determine whether sales of structural steel beams from Italy to the United States were made at less than fair value (“LTFV”), we compared the constructed export price (“CEP”) to the normal value (“NV”), as described in the “Constructed Export Price” and “Normal Value” sections of this notice, below. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI weighted-average CEPs to weighted-average NVs.
In accordance with section 771(16) of the Act, we considered all products produced and sold by Duferdofin in the home market during the POI that fit the description in the “Scope of Investigation” section of this notice to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We compared U.S. sales to sales made in the home market, where appropriate. Where there were no sales of identical merchandise in the home market made in the ordinary course of trade to compare to U.S. sales, we compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade. In making the product comparisons, we matched foreign like products based on the physical characteristics reported by the respondent in the following order of importance: form; shape/size (section depth); strength/grade; and coating.
Constructed Export Price
In accordance with section 772(b) of the Act, we calculated CEP for those sales where the merchandise was sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. In this case, we are treating all of Duferdofin's U.S. sales as CEP sales because they were made in the United States by Duferdofin's U.S. affiliate on behalf of Duferdofin, within the meaning of section 772(b) of the Act.
We based CEP on the packed delivered prices to unaffiliated purchasers in the United States. Where appropriate, we made adjustments for price-billing errors. We also made deductions for movement expenses, in accordance with section 772(c)(2)(A) of the Act; these included, where appropriate, foreign inland freight, ocean freight, marine insurance, U.S. brokerage and handling, U.S. customs duties (including harbor maintenance fees and merchandise processing fees), U.S. inland insurance, U.S. inland freight expenses (i.e., freight from port to warehouse and freight from warehouse to the customer), post-sale warehousing expenses, truck loading expenses, and U.S. barging expenses. For post-sale warehousing expenses, we reallocated this expense to those transactions where the terms of sale indicated that warehousing expenses were incurred. For further discussion, see the Memorandum to the File from Michael Strollo and Alysia Wilson Re: Calculations Performed for Duferdofin S.p.A. (“Duferdofin”) for the Preliminary Determination in the 2000-2001 Antidumping Duty Investigation of Structural Steel Beams (“Beams”) from Italy, dated December 19, 2001 (“Sales Calculation Memorandum”). In accordance with section 772(d)(1) of the Act and 19 CFR 351.402(b), we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (commissions, imputed credit costs, and bank charges), and indirect selling expenses (including inventory carrying costs).
For those U.S. sales for which Duferdofin did not report a date of payment, we have used the signature date of the preliminary determination (i.e., December 19, 2001) in the calculation of imputed credit expenses. In addition, we recalculated Duferdofin's reported U.S. indirect selling expenses to include interest expenses. We offset this expense by interest income and imputed credit (up to the amount of interest expense), in accordance with our practice. See Notice of Final Results of Antidumping Duty Administrative Reviews: Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products From Korea, 66 FR 3540 (January 16, 2001) and accompanying issues and decision memorandum at Comment 1. For further discussion, also see the Sales Calculation Memorandum. Pursuant to section 772(d)(3) of the Act, we further reduced the starting price by an amount for profit to arrive at CEP. In accordance with section 772(f) of the Act, we calculated the CEP profit rate using the expenses incurred by Duferdofin and its affiliate on their sales of the subject merchandise in the United States and the foreign like product in the home market and the profit associated with those sales.
A. Home Market Viability
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 (i.e., the aggregate volume of home market sales of the foreign like product is equal to or greater than five percent of the aggregate volume of U.S. sales), we compared the respondent'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)(C) of the Act. Because the respondent'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 for the subject merchandise, we determined that the home market was viable for the respondent.
B. Cost of Production Analysis
Based on our analysis of an allegation contained in the petition, we found that there were reasonable grounds to believe or suspect that sales of structural steel beams in the home market were made at prices below their cost of production (“COP”). Accordingly, pursuant to section 773(b) of the Act, we initiated a country-wide sales-below-cost investigation to determine whether sales were made at prices below their respective COPs (see Initiation Notice at 66 FR 33048, 33051).
1. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the cost of materials and fabrication for the foreign like product, plus an amount for general and administrative expenses (“G&A”), including interest expenses, and home market packing costs (see “Test of Home Market Sales Prices” section below for treatment of home market selling Start Printed Page 67188expenses). We relied on the COP data submitted by Duferdofin except as noted below.
1. We revised COP to include additional depreciation expense not included in Duferdofin's reported costs.
2. We revised the G&A rate to include foreign exchange gains and losses on accounts payable and miscellaneous expense in the numerator of the calculation. We also excluded the “variation in stocks of products in process, semifinished and finished products,” packing expenses and G&A expense from the denominator of the calculation.
3. We revised the financial expense rate to exclude the “increase in work in progress and finished products,” packing expense and other personnel expense from the denominator of the calculation.
See Memorandum from Ji Young Oh to Neal Halper, Director, Office of Accounting, dated December 19, 2001, Re: Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Determination (“Cost Calculation Memorandum”).
2. Test of Home Market Sales Prices
On a product-specific basis, we compared the adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether the sale prices were below the COP. The prices were exclusive of any applicable movement charges, rebates, discounts, and direct and indirect selling expenses. In determining whether to disregard home market sales made at prices less than their COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C), where less than 20 percent of the respondent's sales of a given product are at prices less than the COP, we do not disregard any below-cost sales of that product, because we determine that in such instances 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 POI are at prices less than the COP, we determine that in such instances the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act.
We found that, for certain specific products, more than 20 percent of Duferdofin's home market sales were at prices less than the COP and, in addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales, if any, as the basis for determining NV, in accordance with section 773(b)(1) of the Act.
C. Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same level of trade (“LOT”) as the EP or CEP. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. Id.; see also 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 19, 1997). In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market (i.e., the “chain of distribution”), including selling functions, class of customer (“customer category”), and the level of selling expenses for each type of sale.
Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for 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, Court Nos. 00-1058,-1060 (Fed. Cir. 2001).
When the Department is unable to find sales of the foreign like product in the comparison market at the same LOT as the EP or CEP, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP or CEP sales at a different LOT in the comparison market, where available data make it practicable, we make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales only, if a NV LOT is more remote from the factory than the CEP LOT and there is no basis for determining whether the difference in LOTs between NV and CEP affected price comparability (i.e. no LOT adjustment was practicable), the Department shall grant a CEP offset, as provided in section 773(a)(7)(B) 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 (November 19, 1997).
We obtained information from Duferdofin regarding the marketing stages involved in making the reported home market and U.S. sales, including a description of the selling activities performed by the Duferdofin for each channel of distribution.
Duferdofin reported home market sales through three channels of distribution and to four customer categories. We examined the chain of distribution and the selling activities associated with sales reported by Duferdofin to each of its customer categories in the home market. The information on the record demonstrates that Duferdofin performs the same selling functions across channels of distribution and customer categories. See Appendix A-2 of Duferdofin's response to the Department's supplemental questionnaire, dated November 13, 2001. Specifically, Duferdofin indicated that to all customers, regardless of channel of distribution, it provides: a high level of freight/delivery arrangements, a medium to high level of customer visits and customer approval/credit research, a medium level of inventory maintenance/warehousing and computer services/accounts receivable, a low to medium level of market research and strategic planning, and a low level of pre-sale engineering advice, post sale servicing, rejected merchandise handling, customer Start Printed Page 67189solicitation, and transit claims. Because Duferdofin performs the same selling functions with the same intensity for all its customers regardless of their channel of distribution, we preliminarily determine that Duferdofin made home market sales at one LOT during the POI.
In the U.S. market, Duferdofin made only CEP sales through its affiliated importer/reseller Duferco Steel Inc. (“DSI”). Duferdofin reported that, for sales to the United States, virtually all selling functions are performed by DSI, with the exception of Italian inventory maintenance and international shipping arrangements, which are performed by Duferdofin.
As set forth in 19 CFR 351.412(f), a CEP offset will be granted where (1) normal value is compared to CEP sales, (2) normal value is determined at a more advanced LOT than the LOT of the CEP, and (3) despite the fact that the party has cooperated to the best of its ability, the data available do not provide an appropriate basis to determine whether the difference in LOT affects price comparability. Duferdofin stated that after CEP adjustments are made, it performs only two selling functions for its U.S. sales to DSI (Italian inventory maintenance and international shipping arrangements) whereas it performs fourteen selling functions in the home market. Since the selling functions performed by Duferdofin for its sales to the United States, after CEP adjustments are made, are substantially less than those performed for Duferdofin's home market sales, we preliminarily determine that Duferdofin's home market sales are being made at a more advanced LOT than those to the United States. Because there is only one level of trade in the home market, the data available do not permit us to determine the extent to which this difference in LOT affects price comparability. Therefore, in accordance with 19 CFR 351.412(f), we are granting Duferdofin a CEP offset.
D. Calculation of Normal Value Based on Comparison Market Prices
We calculated NV based on delivered prices to unaffiliated customers or prices to affiliated customers that we determined to be at arm's-length. We made deductions, where appropriate, from the starting price for early payment discounts. We also made deductions for movement expenses, including inland freight (plant to distribution warehouse, plant/warehouse to customer, and affiliated reseller to customer) and warehousing under section 773(a)(6)(B)(ii) of the Act. In addition, we made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in circumstances of sale for imputed credit expenses and commissions.
We disallowed Duferdofin's claim for a rebate adjustment because Duferdofin failed to respond to the Department's requests to distinguish between pre- and post-petition rebates. See the Sales Calculation Memorandum.
Furthermore, we made adjustments for differences in costs attributable to differences in the physical characteristics of the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We also deducted home market packing costs and added U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of the Act. Finally, for comparisons to CEP sales, we made a CEP offset pursuant to section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). We calculated the CEP offset as the lesser of the indirect selling expenses on the comparison-market sales or the indirect selling expenses deducted from the starting price in calculating CEP.
We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.
As provided in section 782(i) of the Act, we will verify all information relied upon in making our final determination.
Suspension of Liquidation
|Exporter/manufacturer||Weighted-average margin percentage|
Because the estimated weighted-average dumping margin for Duferdofin is de minimis, we are not directing the Customs Service to suspend liquidation of entries of structural steel beams from Italy.
In accordance with section 733(f) of the Act, we have notified the ITC of our determination. If our final determination is affirmative, pursuant to section 735(b)(3) of the Act, the ITC will determine within 75 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry.
We will disclose the calculations used in our analysis to parties in this proceeding in accordance with 19 CFR 351.224(b).
Case briefs for this investigation must be submitted to the Department no later than seven days after the date of the final verification report issued in this proceeding. Rebuttal briefs must be filed five days from the deadline date for case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Section 774 of the Act provides that the Department will hold a public hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by an interested party. If a request for a hearing is made in this investigation, the hearing will tentatively be held two days after the rebuttal brief deadline date at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, within 30 days of the publication of this notice. Requests should contain: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs.
We will make our final determination no later than 135 days after the publication of this notice in the Federal Register.
This determination is published pursuant to sections 733(f) and 777(i) of the Act.Start Signature
Dated: December 19, 2001.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
1. The marketing process in the United States and comparison markets begins with the producer and extends to the sale to the final user or consumer. The chain of distribution between the two may have many or few links, and the respondent's sales occur somewhere along this chain. In performing this evaluation, we considered the narrative responses of the respondent to properly determine where in the chain of distribution the sale appears to occur.Back to Citation
2. Selling functions associated with a particular chain of distribution help us to evaluate the level(s) of trade in a particular market. For purposes of this preliminary determination, we have organized the common structural steel beams selling functions into four major categories: sales process and marketing support, freight and delivery, inventory and warehousing, and quality assurance/warranty services.Back to Citation
3. Where NV is based on constructed value (“CV”), we determine the NV LOT based on the LOT of the sales from which we derive selling expenses, G&A and profit for CV, where possible.Back to Citation
[FR Doc. 01-31979 Filed 12-27-01; 8:45 am]
BILLING CODE 3510-DS-P