Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary determination of sales at less than fair value, postponement of final determination, and negative preliminary determination of critical circumstances.
July 17, 2003.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Carol Henninger or Amber Musser at (202) 482-3003 or (202) 482-1777, respectively; AD/CVD Enforcement Group II Office 5, Import Administration, Room 1870, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.End Further Info End Preamble Start Supplemental Information
We preliminarily determine that prestressed concrete steel wire strand (PC strand) from Thailand is being sold, or is likely to be sold, in the United States at less than fair value (LTFV), as provided in section 733 of the Tariff Act of 1930, as amended. The estimated margins of sales at LTFV are shown in the Suspension of Liquidation section of this notice. In addition, we preliminarily determine that critical circumstances do not exist with respect to PC strand produced and exported by the respondent in this investigation as well as all other producers/exporters.
Interested parties are invited to comment on this preliminary 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.
This investigation was initiated on February 20, 2003. See Notice of Initiation of Antidumping Duty Investigations: Prestressed Concrete Steel Wire Strand from Brazil, India, the Republic of Korea, Mexico, and Thailand, 68 FR 9050 (February 27, 2003) (Initiation Notice). Since the initiation of the investigation, the following events have occurred:
The Department of Commerce (the Department) set aside a period for all interested parties to raise issues regarding product coverage. See Initiation Notice, 68 FR at 9050. No comments were received from interested parties in this investigation.
The Department issued a letter on March 7, 2003, to interested parties in all of the concurrent PC strand antidumping investigations, providing an opportunity to comment on the Department's proposed model match characteristics and its hierarchy of characteristics. The petitioners submitted comments on March 18 and 20, 2003. The Department also received comments on model matching from respondents in the concurrent investigation involving Mexico on March 18, 2003. These comments were taken into consideration by the Department in developing the model matching characteristics and hierarchy for all of the PC strand antidumping investigations.
On March 17, 2003, the United States International Trade Commission (ITC) preliminarily determined that there is a reasonable indication that imports of the products subject to this investigation are materially injuring an industry in the United States producing the domestic like product. See Prestressed Concrete Steel Wire Strand From Brazil, India, Korea, Mexico, and Thailand, 68 FR 13952 (March 21, 2003).
On April 4, 2003 the Department issued its antidumping questionnaire to Siam Industrial Wire Co., Ltd. (SIW). We received responses to sections A-D of the antidumping questionnaire and Start Printed Page 42374issued supplementary questionnaires where appropriate. On June 17, 2003, the petitioners alleged that critical circumstances exist with respect to imports of PC strand from Thailand. Accordingly, pursuant to section 732(e) of the Act, on June 18, 2003, the Department requested information from SIW regarding monthly shipments of PC strand to the United States during the period January 2000 to July 2003. We subsequently shortened this reporting period by one year. The respondent submitted the requested information on June 25, 2003. The critical circumstances analysis for the preliminary determination is discussed below under Critical Circumstances.
Postponement of Final Determination and Extension of Provisional Measures
Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise. In accordance with 19 CFR 351.210(e)(2) the Department requires that exporters requesting postponement of the final determination must also request an extension of the provisional measures referred to in section 733(d) of the Act from a four-month period until not more than six months. We received a request to postpone the final determination from respondent, SIW. In its request, SIW consented to the extension of provisional measures to no longer than six months. Since this preliminary determination is affirmative, the request for postponement is made by an exporter that accounts for a significant proportion of exports of the subject merchandise, and there is no compelling reason to deny the respondent's request, we have extended the deadline for issuance of the final determination until the 135th day after the date of publication of this preliminary determination in the Federal Register and have extended provisional measures to no longer than six months.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate individual dumping margins for each known exporter and producer of the subject merchandise. Where it is not practicable to examine all known producer/exporters of subject merchandise, section 777A(c)(2) of the Act permits the Department to investigate either: (1) A sample of exporters, producers, or types of products that is statistically valid, based on the information available at the time of selection; or (2) exporters and producers accounting for the largest volume of the subject merchandise that can reasonably be examined. In the petition, the petitioners identified six producers of PC strand in Thailand. The data on the record indicates that SIW is the only producer of the subject merchandise in Thailand that exports to the United States. See Memorandum from Daniel O'Brien, International Trade Compliance Analyst, to Gary Taverman, Director, Office 5, Re: Selection of Respondents, dated April 4, 2003.
Period of Investigation
The period of investigation (POI) is January 1, 2002, through December 31, 2002. This period corresponds to the four most recent fiscal quarters prior to the month of the filing of the petition (i.e., January 2003) involving imports from a market economy, and is in accordance with our regulations. See 19 CFR 351.204(b)(1).
Scope of Investigation
For purposes of this investigation, PC strand is steel strand produced from wire of non-stainless, non-galvanized steel, which is suitable for use in prestressed concrete (both pretensioned and post-tensioned) applications. The product definition encompasses covered and uncovered strand and all types, grades, and diameters of PC strand.
The merchandise under investigation is currently classifiable under subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.
In accordance with section 771(16) of the Act, all products produced by the respondent covered by the description in the Scope of Investigation section, above, and sold in Thailand during the POI, are considered to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We have relied on four criteria to match U.S. sales of subject merchandise to comparison-market sales of the foreign like product: diameter, covering/coating, grade, and type. Where there were no sales of identical merchandise in the home market to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product on the basis of the characteristics listed above.
Fair Value Comparisons
To determine whether sales of PC strand from Thailand were made in the United States at 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. In accordance with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average CEPs. We compared these to weighted-average home market prices in Thailand. See Constructed Export Price, section below.
For the price to the United States, we used CEP, as defined in section 772(b) of the Act. Section 772(b) of the Act defines CEP as the price at which the subject merchandise is first sold in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter, as adjusted under subsections 772(c) and (d) of the Act.
Constructed Export Price
For SIW, we calculated CEP based on the packed prices charged to the first unaffiliated customer in the United States. We calculated a CEP for SIW's sales, all of which were made by an affiliated reseller in the United States prior to the date of importation by or for the account of the producer.
In accordance with section 772(c)(2) of the Act, we made deductions from the starting price for movement expenses. These include inland freight, international freight, foreign brokerage and handling, U.S. warehousing expenses, U.S. duties, and U.S. freight forwarding expenses. We also added duty drawback, in accordance with section 772(c)(1)(B) of the Act.
Section 772(d)(1) of the Act provides for additional adjustments to calculate CEP. Accordingly, we deducted from the starting price those selling expenses that were incurred in selling the subject merchandise in the United States, including commission and other direct selling expenses (credit and warranty expenses) and indirect selling expenses related to commercial activity in the United States and added an amount for interest revenue. We also deducted from CEP an amount for profit, in accordance with section 772(d)(3) of the Act.
A. Selection of Comparison Markets
Section 773(a)(1) of the Act directs that NV be based on the price at which Start Printed Page 42375the foreign like product is sold in the home market, provided that the merchandise is sold in sufficient quantities (or value, if quantity is inappropriate), that the time of the sales reasonably corresponds to the time of the sale used to determine export price (EP) or CEP, and that there is no particular market situation that prevents a proper comparison with the EP or CEP. The statute contemplates that quantities (or value) will normally be considered insufficient if they are less than five percent of the aggregate quantity (or value) of sales of the subject merchandise to the United States.
We found that SIW had a viable home market for PC strand. As such, the respondent submitted home market sales data for purposes of the calculation of NV.
In deriving NV, we made adjustments as detailed in the Calculation of Normal Value Based on Home Market Prices and Calculation of Normal Value Based on Constructed Value sections below.
B. Cost of Production Analysis
Based on allegations contained in the petition, and in accordance with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to believe or suspect that PC strand sales were made in Thailand at prices below the cost of production (COP). See Initiation Notice, 68 FR at 9050. As a result, the Department has conducted an investigation to determine whether SIW made home market sales at prices below their respective COPs during the POI within the meaning of section 773(b) of the Act. We conducted the COP analysis described below.
1. Calculation of Cost of Production
In accordance with section 773(b)(3) of the Act, we calculated a weighted-average COP based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for the home market general and administrative (G&A) expenses, including interest expenses and packing expenses.
We relied on the COP information submitted by SIW in its cost questionnaire responses, except for the following adjustments:
a. We disallowed SIW's claimed labor and overhead adjustment factors.
b. We adjusted SIW's financial expense and G&A ratios in accordance with the Department's change in the treatment of foreign exchange gains and losses.
c. We adjusted SIW's G&A ratio to exclude gain on forward hedging and gain on stock valuation.
See Memorandum from James Balog, Accountant, to Neal Halper, Director, Office of Accounting, Re: Cost of Production Calculation Adjustments for the Preliminary Determination, dated July 10, 2003.
SIW departed from its normal accounting records in allocating labor and overhead costs to specific dimensions of PC strand products produced. In departing from its normal books and records, SIW claimed that it relied on engineering information to determine adjustment ratios. In our supplemental questionnaire issued on June 13, 2003, we requested that SIW provide supporting information for the engineering factors used. However, SIW failed to provide adequate support and explanation for the derivation of these adjustment factors. As such, for the preliminary determination, we did not rely on the production engineering information used by SIW to adjust the standard labor and overhead costs maintained in its normal books and records and instead, relied on facts otherwise available. Sections 776(a)(2)(A) and (D) of the Act provide that if an interested party withholds information that has been requested, or provides information which cannot be verified, the Department shall use, subject to sections 782(d) and (e) of the Act, facts otherwise available in reaching the applicable determination. Pursuant to sections 782(d) and (e) of the Act the Department shall not decline to consider submitted information if all of the following requirements are met: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.
When asked to submit additional information to support its adjustments, SIW failed to adequately do so in its June 27, 2003, supplemental section D response. We believe the information provided to support SIW's adjustments was incomplete and cannot serve as a reliable basis for reaching a determination. As facts otherwise available, we relied on the labor and overhead cost allocations as maintained in its normal books and records, unadjusted. On July 10, 2003, we issued a second supplemental D questionnaire giving SIW another opportunity to provide the requested information. The due date for submission of this information is July 17, 2003.
2. Test of Home Market Sales Prices
We compared the adjusted weighted-average COP for SIW to its home-market sales prices of the foreign like product, as required under section 773(b) of the Act, to determine whether these sales had been made at prices below the COP within an extended period of time (i.e., a period of one year) in substantial quantities and whether such prices were sufficient to permit the recovery of all costs within a reasonable period of time.
On a model-specific basis, we compared the revised COP to the home market prices, less any applicable movement charges, discounts, rebates, billing adjustments, and direct and indirect selling expenses (which were also deducted from COP).
3. Results of the COP Test
Pursuant to section 773(b) of the Act, which provides that sales made below COP may be disregarded only if, among other things, they are made in “substantial quantities” (i.e., 20 percent or more of a respondent's sales of a given product), we did not disregard any below-cost sales because we determined that the below-cost sales were not made in “substantial quantities.” As this was the case for all products sold in the home market, we did not disregard any sales as below-cost.
C. Calculation of Normal Value Based on Home Market Prices
We determined NV for the respondent company as follows. We made adjustments for any differences in packing and deducted home market movement expenses pursuant to sections 773(a)(6)(A) and 773(a)(6)(B)(ii) of the Act. In addition, we made adjustments for differences in circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) of the Act by deducting billing adjustments, discounts, rebates, and direct selling expenses incurred for home market sales (credit expenses).
D. Arm's-Length Sales
SIW reported sales of the foreign like product to an affiliated end-user customer and an affiliated reseller. To test whether these sales to affiliated customers were made at arm's length, where possible, we compared the prices of sales to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, and packing. Where the price to the affiliated party was, on average, between 98 and 102 percent of the price to unaffiliated parties, we determined that sales made to the affiliated party were at arm's length. See Antidumping Proceedings: Start Printed Page 42376Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186, (November 15, 2002). SIW's sales to its affiliated end-user customer did not fall within that range and were excluded from our analysis. SIW's sales to its affiliated reseller fell within that range, and so for the purposes of the preliminary determination, we have included SIW's sales to its affiliated reseller in the determination of NV. However, we are continuing to review SIW's reporting of its home market sales to its affiliated reseller. On July 10, 2003, we issued a second supplemental questionnaire requesting additional information regarding these sales. The due date for submission of this information is July 17, 2003.
E. Level of Trade/Constructed Export Price Offset
In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade as the EP or CEP transaction. The NV level of trade is that of the starting-price sales in the comparison market. For CEP transactions, it is the level of the constructed sale from the exporter to the importer.
To determine whether NV sales are at a different level of trade than the CEP transactions, 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 level of trade 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 level of trade of the export transaction, we make a level-of-trade adjustment under section 773(a)(7)(A) of the Act.
In implementing these principles in this investigation, we obtained information from SIW about the marketing stages involved for the reported U.S. and home market sales, including a description of the selling activities performed by the respondents for each channel of distribution. In identifying levels of trade for home market sales we considered the selling functions reflected in the starting price before any adjustments. For CEP sales, we considered only the selling activities reflected in the price after the deduction of expenses pursuant to section 772(d) of the Act.
In conducting our level-of-trade analysis for the respondent, we examined the specific types of customers, the channels of distribution, and the selling practices of the respondent. Generally, if the reported levels of trade are the same, the functions and activities of the seller should be similar. Conversely, if a party reports levels of trade that are different for different categories of sales, the functions and activities may be dissimilar. The following is a discussion of our findings.
SIW has two channels of distribution in the home market: (1) Direct sales to end customers, and (2) sales to an affiliated reseller. SIW's selling functions, such as engineering services, advertising, packing, and technical assistance, are identical for both channels of distribution in the home market. Therefore, sales through both of these channels are made at the same level of trade (LOT 0). In the U.S. market, SIW has two channels of distribution: (1) Direct sales, and (2) inventory sales. SIW's selling functions, such as advertising, packing, and freight and delivery, are identical for these two channels of distribution. Therefore, all of SIW's U.S. sales are CEP sales made at the same level of trade (LOT 1).
With regard to the U.S. sales, we considered only the selling activities reflected in the price after the deduction of expenses and profit covered in section 772(d) of the Act. After we deducted the expenses and profit covered in section 772(d), we determined that SIW performs more selling functions for sales made in the home market, than for sales made to its U.S. affiliate, Cementhai SCT USA. In the home market SIW provides additional selling functions, such as engineering services and technical assistance, processing rebates and cash discounts, performing sales forecasting, strategic planning and marketing research, and employing direct sales and marketing personnel.
There is only one level of trade in the home market and we have no other appropriate information on which to determine if there is a pattern of consistent price differences between the sales on which NV is based and comparison market sales at the level of trade of the export transactions. As a result, we are granting a CEP offset pursuant to section 773(a)(7)(B) of the Act.
We made currency conversions into U.S. dollars in accordance with section 773A of the Act based on exchange rates in effect on the dates of the U.S. sale, as obtained from the Federal Reserve Bank (the Department's preferred source for exchange rates).
On June 17, 2003, petitioners alleged that there is a reasonable basis to believe or suspect critical circumstances exist with respect to the antidumping investigations of PC strand from Thailand. In accordance with 19 CFR 351.206(c)(2)(i), because petitioners submitted critical circumstances allegations more than 20 days before the scheduled date of the preliminary determination, the Department must issue preliminary critical circumstances determinations not later than the date of the preliminary determination.
Section 733(e)(1) of the Act provides that the Department, upon receipt of a timely allegation of critical circumstances, will determine whether there is a reasonable basis to believe or suspect that: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and there was likely to be material injury by reason of such sales, and (B) there have been massive imports of the subject merchandise over a relatively short period.
According to 19 CFR 351.206(h)(1), in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) The volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, 19 CFR 351.206(h)(2) provides that “unless the imports during a “relatively short period” have increased by at least 15 percent over the imports during an immediately preceding period of comparable duration, the Secretary will not consider the imports massive.”
In accordance with 19 CFR 351.206(i) the Department defines “relatively short period” as generally the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. This section further provides that, if the Department finds that importers, exporters or producers had reason to believe at some time prior to the filing of the petition that a proceeding was likely, then the Department may consider a period of not less than three months from that earlier time.
In determining whether the above statutory criteria have been satisfied, we examined: (1) The evidence presented in the petitioners' submission of June 17, 2003; (2) exporter-specific shipment Start Printed Page 42377data requested by the Department; (3) import data available through the ITC's DataWeb Web site; and (4) the ITC preliminary injury determination.
To determine whether a history of dumping and material injury exists, the Department generally considers current or previous antidumping duty orders on the subject merchandise from the country in question in the United States and current orders in any other country. The Department will normally not consider the initiation of a case, nor a preliminary or final determination of sales at LTFV in the absence of an affirmative finding of material injury by the ITC, as indicative of a history sufficient to satisfy this criterion. See Preliminary Determination of Critical Circumstances: Steel Concrete Reinforcing Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). With regard to imports of PC strand from Thailand, the petitioners make no specific mention of a history of dumping. We are not aware of any antidumping order in the United States or elsewhere on PC strand from Thailand. For this reason, the Department does not find a history of injurious dumping of the subject merchandise from Thailand pursuant to section 733(e)(1)(A)(i) of the Act.
In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that the exporter was selling PC strand at LTFV, the Department must rely on the facts before it at the time the determination is made. The Department normally considers margins of 25 percent or more for EP sales and 15 percent or more for CEP sales sufficient to impute knowledge of dumping. See e.g., Preliminary Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China, 62 FR 31972, 31978 (June 11, 1997). The Department generally bases its decision, with respect to knowledge, on the margins calculated in the preliminary determination. Because the preliminary dumping margin for the respondent is less than 15 percent, we find there is no reasonable basis to impute knowledge of dumping with respect to these imports from Thailand.
It is also the Department's practice to conduct its critical circumstances analysis of companies in the “all others” category based on the experience of the investigated company. Because we are determining that critical circumstances do not exist for SIW in this investigation, we are concluding that critical circumstances do not exist for companies covered by the “all others” rate.
Accordingly, we find that critical circumstances do not exist for imports of PC strand from Thailand. We will make a final determination concerning critical circumstances for all producers and exporters of subject merchandise from Thailand when we make our final determination in this investigation, which will be 135 days after the date of publication of the preliminary determination.
In accordance with section 782(i) of the Act, we intend to verify all information relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we are directing the BCBP to suspend liquidation of all entries of PC strand from Thailand, that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. We are also instructing the BCBP to require a cash deposit or the posting of a bond equal to the weighted-average dumping margin as indicated in the chart below. These instructions suspending liquidation will remain in effect until further notice.
The weighted-average dumping margins are as follows:
|Producer/exporter||Weighted-average margin (percentage)|
|Siam Industrial Wire Co., Ltd||11.52|
The Department will disclose calculations performed within five days of the date of publication of this notice to the parties in this proceeding in accordance with 19 CFR 351.224(b).
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the ITC of the Department's preliminary affirmative determination. If the final determination in this proceeding is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination whether imports of PC strand from Thailand are materially injuring, or threaten material injury to, the U.S. industry.
Interested parties are invited to comment on the preliminary determination. Interested parties may submit case briefs on the later of 50 days after the date of publication of this notice or one week after the issuance of the verification reports. See 19 CFR 351.309(c)(1)(i). Rebuttal briefs, the content of which is limited to the issues raised in the case briefs, must be filed within five days after the deadline for the submission of case briefs. See 19 CFR 351.309(d). 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. Further, we request that parties submitting briefs and rebuttal briefs provide the Department with a copy of the public version of such briefs on diskette.
In accordance with section 774 of the Act, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs. If a request for a hearing is made, we will tentatively hold the hearing two days after the deadline for submission of rebuttal briefs at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, at a time and in a room to be determined. Parties should confirm by telephone the date, time, and location of the hearing 48 hours before the scheduled date.
Interested parties who wish to request a hearing, or to participate in a hearing 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 date of 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. At the hearing, oral presentations will be limited to issues raised in the briefs. See 19 CFR 351.310(c). The Department will make its final determination no later than 135 days after the date of publication of this preliminary determination.
This determination is issued and published pursuant to sections 733(f) and 777(i)(1) of the Act.Start Signature
Dated: July 10, 2003.
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
1. The petitioners in this investigation are American Spring Wire Corp., Insteel Wire Products Company, and Sumiden Wire Products Corp.Back to Citation
2. Section A of the questionnaire requests general information concerning a company's corporate structure and business practices, the merchandise under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Section B requests a complete listing of all home market sales or, if the home market is not viable, of sales in the most appropriate third-country market (this section is not applicable to respondents in non-market economy cases). Section C requests a complete listing of U.S. sales. Section D requests information on the cost of production of the foreign like product and the constructed value of the merchandise under investigation. Section E requests information on further manufacturing.Back to Citation
[FR Doc. 03-18129 Filed 7-16-03; 8:45 am]
BILLING CODE 3510-DS-P