Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce is conducting an administrativereview of the antidumping duty order on stainless steel wire rods from India in response to a request from an interested party. The review covers one manufacturer/exporter, Mukand Limited. The period of review is December 1, 2005, through November 30, 2006. We have preliminarily determined that Mukand Limited made sales at less than normal value.
The Department of Commerce intends to rescind the administrative review Start Printed Page 52080with respect to Sunflag Iron & Steel Co., Ltd. See “Intent to Rescind Administrative Review” section below. We invite interested parties to comment on these preliminary results. Parties who submit comments in this review are requested to submit with each argument a statement of each issue and a brief summary of the argument.
September 12, 2007.Start Further Info
FOR FURTHER INFORMATION CONTACT:
George Callen, AD/CVD Enforcement, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230, telephone: (202) 482-0180.End Further Info End Preamble Start Supplemental Information
On October 20, 1993, the Department of Commerce (the Department) published the antidumping duty order on certain stainless steel wire rods (wire rods) from India. See Antidumping Duty Order: Certain Stainless Steel Wire Rods from India, 58 FR 63335 (December 1, 1993). On December 1, 2006, the Department published in the Federal Register a notice of opportunity to request an administrative review of this antidumping duty order. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 71 FR 69543 (December 1, 2006).
On December 29, 2006, in accordance with 19 CFR 351.213(b)(2), Mukand Limited (Mukand), a producer and exporter, requested an administrative review under section 751(a) of the Tariff Act of 1930, as amended (the Act), of the antidumping duty order on wire rods from India. On December 29, 2006, the Department of Commerce received a request to conduct an administrative review of the antidumping duty order on stainless steel wire rods from India from Sunflag Iron & Steel Co., Ltd. (Sunflag). On February 2, 2007, in accordance with 751(a) of the Act and 19 CFR 351.221(b)(1), we published in the Federal Register a notice of initiation of administrative review of this order. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 72 FR 5005 (February 2, 2007).
The period of review (POR) is December 1, 2005, through November 30, 2006. We are conducting this administrative review in accordance with section 751(a) of the Act.
Intent to Rescind Administrative Review
Sunflag also requested a new-shipper review, which we initiated on March 20, 2007. See Stainless Steel Wire Rod from India: Notice of Initiation of Antidumping Duty New-Shipper Review, 72 FR 13088 (March 20, 2007). Because we are proceeding with the new-shipper review and because the administrative review covers entries during the same period of time as the new-shipper review, we intend to rescind the administrative review pursuant to 19 CFR 351.214(j).
Scope of the Order
The merchandise under review is wire rods, which are hot-rolled or hot-rolled annealed and/or pickled rounds, squares, octagons, hexagons or other shapes, in coils. Wire rods are made of alloy steels containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. These products are only manufactured by hot-rolling and are normally sold in coiled form, and are of solid cross section. The majority of wire rods sold in the United States are round in cross-section shape, annealed, and pickled. The most common size is 5.5 millimeters in diameter.
The wire rods subject to this order are currently classifiable under subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 7221.00.0075 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 subject to the order is dispositive of whether or not the merchandise is covered by the review.
In order to determine whether there was a sufficient volume of sales of wire rods in the comparison market to serve as a viable basis for calculating the normal value, we compared the volume of the respondent's home-market sales of the foreign like product to its volume of the U.S. sales of the subject merchandise in accordance with section 773(a) of the Act. Mukand's quantity of sales in the home market was greater than five percent of its sales to the U.S. market.Based on this comparison of the aggregate quantities of the comparison-market (i.e., India) and U.S. sales and absent any information that a particular market situation in the exporting country did not permit a proper comparison, we determined that the quantity of the foreign like product sold by the respondent in the exporting country was sufficient to permit a proper comparison with the sales of the subject merchandise to the United States, pursuant to section 773(a)(1) of the Act. Thus, we determined that Mukand's home market was viable during the POR. See section 773(a)(1) of the Act. Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we based normal value for the respondent on the prices at which the foreign like product was first sold for consumption in the exporting country in the usual commercial quantities and in the ordinary course of trade and, to the extent practicable, at the same level of trade as the U.S.-price sales.
We calculated export price in accordance with section 772(a) of the Act because Mukand sold the merchandise to the unaffiliated purchaser in the United States prior to importation. We based export price on the packed, delivered, duty unpaid price to the unaffiliated purchaser in the United States. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. No other adjustments were claimed.
In accordance with section 771(16) of the Act, we considered all products covered by the scope of the order which were produced and sold by Mukand in the home market during the POR to be foreign like products for the purpose of determining appropriate product comparisons to wire rods sold in the United States. We compared U.S. sales to sales made in the comparison market within the contemporaneous window period. Mukand had only one entry of subject merchandise during the POR and on January 29, 2007, Mukand sought permission to report only home-market sales it made during the period July 2005 through December 2005, which covers the three months preceding and two months after this entry. We agreed to this request. See letter from Laurie Parkhill to Mukand dated February 26, 2007.
Because there were no contemporaneous sales of identical merchandise in the comparison market made in the ordinary course of trade to compare to Mukand's U.S. sale, we compared its U.S. sale to sales of the most similar foreign like product made in the ordinary course of trade. In making product comparisons, we defined identical and most similar foreign like products based on the physical characteristics reported by Start Printed Page 52081Mukand in the following order of importance: grade, diameter, and type of final finishing operation. For more information, page 2 of memorandum entitled “Administrative Review of the Antidumping Duty Order on Stainless Steel Wire Rods from India - Preliminary Results Analysis Memorandum for Mukand” dated August 30, 2007 (Prelim Memo).
Cost of Production
In the most recently completed segment of this proceeding in which Mukand participated, we disregarded certain sales made by Mukand in the home market that failed the cost test and we excluded such sales from the calculation of normal value. See 69 FR 29923 (May 26, 2004). Therefore, consistent with Section 773 (b)(2)(A)(ii) of the Act we are conducting a cost-of-production investigation of Mukand's home-market sales.
On January 29, 2007, Mukand sought permission to report cost-of-production data for the prior POR (December 1, 2004 - November 30, 2005) because the U.S. sale at issue involved merchandise that entered the United States during the current POR but was produced and shipped to the United States during the prior period. We agreed to that request. See letter from Laurie Parkhill to Mukand dated March 9, 2007.
In accordance with section 773(b)(3) of the Act, we calculated the cost of production (COP) based on the sum of the costs of materials and fabrication employed in producing the foreign like product, the selling, general, and administrative (SG&A) expenses, and all costs and expenses incidental to packing the merchandise. In our COP analysis, we used the home-market sales and COP information provided by Mukand in its questionnaire responses, including its home-market and COP data bases. See Mukand's March 15, 2007, June 15, 2007, and July 30, 2007, responses and accompanying data bases. We relied on the COP data submitted by Mukand, except for the changes identified below:
1. Under section 773(f)(3) of the Act (i.e., the “Major Input Rule”), we increased Mukand's reported cost of direct materials based on the difference between its affiliated supplier's cost of grade 201 and 410 billets and the transfer prices charged to Mukand for such billets.
2. We increased Mukand's general and administrative expense ratio to include “exceptional” expenses recognized in Mukand's financial statements for fiscal year 2004-2005. See Prelim Memo at 2.
After calculating the COP and in accordance with section 773(b)(1) of the Act, we tested home-market sales of the foreign like product to determine if they were made at prices below the COP within an extended period of time in substantial quantities and whether such prices permitted the recovery of all costs within a reasonable period of time. The home-market prices were exclusive of any applicable movement charges, billing adjustments, discounts, and indirect selling expenses. Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of Mukand'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 the below-cost sales were not made in substantial quantities within an extended period of time. Where 20 percent or more of Mukand's sales of a given product were at prices less than the COP, we disregarded the below-cost sales of that product because we determined that the below-cost sales were made in substantial quantities within an extended period of time, pursuant to sections 773(b)(2)(B) and (C) of the Act and because, based on comparisons of prices to weighted-average COPs for the POR, we determined that these below-cost 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)(2)(D) of the Act. See Prelim Memo. Consequently, we disregarded Mukand's below-cost sales and used the remaining sales as the basis for determining normal value, in accordance with 773(b)(1) of the Act.
We based normal value for Mukand on the prices of the foreign like products sold to its comparison-market customers. When applicable, we made adjustments for differences in packing and movement expenses in accordance with sections 773(a)(6)(A) and (B) of the Act. We also 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 Act and 19 CFR 351.411. In addition, we made adjustments for differences in circumstances of sale in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. For comparisons to export price, we made circumstance-of-sale adjustments by deducting home-market direct selling expenses incurred on home-market sales from, and adding U.S. direct selling expenses to, normal value. In accordance with section 773(a)(1)(B)(i) of the Act, we based normal value on sales at the same level of trade as the export price. See the “Level of Trade” section below.
Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, we determined normal value based on sales in the home market at the same level of trade as the export-price sales. The normal value level of trade is based on the starting price of the sales in the home market or, when normal value is based on constructed value, the starting price of the sales from which we derive SG&A expenses and profit. For export price sales, the U.S. level of trade is based on the starting price of the sales to the U.S. market.
To determine whether normal value sales are at a different level of trade than the export- price sales, the Department examines stages in the marketing process and selling functions along the chain of distribution between the producer and the customer. If the comparison-market sales are at a different level of trade than the export-price sales and the difference affects price comparability, as manifested by a pattern of consistent price differences between comparison-market sales at the normal value level of trade and comparison-market sales at the level of trade of the export transaction, the Department makes a level-of-trade adjustment under section 773(a)(7)(A) of the Act. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 (November 19, 1997).
In determining whether Mukand made sales at different levels of trade, we obtained information from Mukand regarding the marketing stages for the reported U.S. and home-market sales, including a description of the selling activities it performed for each channel of distribution. Generally, if the reported levels of trade are the same, the selling functions and activities of the seller at each level should be similar. Conversely, if a party reports that levels of trade are different for different groups of sales, the selling functions and activities of the seller for each group should be dissimilar.
In the home market, Mukand reported four levels of trade: sales to end-user via an agent, sales to end-users without an agent, sales to traders without an agent, and sales to traders with an agent. See Mukand's questionnaire response, dated March 15, 2007 (Mukand Response), at B-20. Mukand reported five channels of distribution: sales to traders or end-users, sales to distributors through a del credre agent Start Printed Page 52082(similar to a consignment agent except that Mukand and agent finalize price with customer and Mukand ships directly to the customer), sales to end-users through consignment agents, sales through “stock yards” (i.e., warehouses) with an agent and sales through warehouses without an agent. See Mukand Response at A-7-8.
We examined the chain of distribution and the selling activities associated with sales reported by Mukand to its five channels of distribution in the home market, and where appropriate, to distinct customer categories within these channels. We found that for sales to traders or end-users, sales to distributors through a del credre agent, and sales to end-users through consignment agents (distribution channels 1, 2, and 3), Mukand provided similar selling activities with respect to sales process, freight services, and warehousing services and, therefore, sales to these three channels constituted one distinct level of trade. We found that for sales through warehouses with an agent and sales through warehouses without an agent (distribution channels 4 and 5) Mukand provided similar selling activities with respect to sales process, freight services, and warehousing services and, therefore, sales to these two channels constituted another, distinct level of trade. Based upon our overall analysis in the home market, we found that these two levels of trade constituted two different levels of trade.
Mukand reported one export-price sale through one channel of distribution. To the extent practicable, we compare normal value at the same level of trade as the sale to the United States. The export-price level of trade is similar to the first level of trade in the home market (channels 1, 2, and 3) with respect to sales process, freight services, and warehousing services. The export-price level of trade differed from the second level of trade in the home-market (channels 4 and 5) with respect to freight, delivery, and warehousing. We matched the export-price sale to a home-market sale at the same level of trade and did not make a level-of-trade adjustment.
Pursuant to section 773A(a) of the Act, we converted amounts expressed in foreign currencies into U.S. dollar amounts based on the exchange rates in effect on the date of the U.S. sale, as reported by the Federal Reserve Bank.
Preliminary Results of Review
As a result of this review, we preliminarily determine that the weighted-average dumping margin on stainless steel wire rods from India for the period December 1, 2005, through November 30, 2006, for Mukand Limited is 11.56 percent.
We will disclose the calculations used in our analysis to parties in this review within five days of the date of publication of this notice. See 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of the publication of this notice in the Federal Register. See 19 CFR 351.310(c). If a hearing is requested, the Department will notify interested parties of the hearing schedule.
Interested parties are invited to comment on the preliminary results of this review. The Department will consider case briefs filed by interested parties within 30 days after the date of publication of this notice in the Federal Register. See 19 CFR 351.309(c)(1)(ii). Also, interested parties may file rebuttal briefs, limited to issues raised in the case briefs. See 19 CFR 351.309(d)(1). The Department will consider rebuttal briefs filed not later than five days after the time limit for filing case briefs. Parties who submit arguments are requested to submit with each argument a statement of the issue, a brief summary of the argument, and a table of authorities cited. Further, we request that parties submitting written comments provide the Department with a diskette containing an electronic copy of the public version of such comments.
We intend to issue the final results of this administrative review, including the results of our analysis of issues raised in the written comments, within 120 days of publication of the preliminary results in the Federal Register. See section 751(c)(3) of the Act and 19 CFR 351.213(h)(1).
The Department shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we calculated an importer-specific assessment rate for these preliminary results of review. Where the importer-specific assessment rate is above de minimis (i.e., 0.50 percent ad valorem or greater), we will instruct CBP to assess the importer-specific rate uniformly, as appropriate, on all entries of subject merchandise during the POR that were entered by the importer or sold to the customer. After 15 days of publication of the final results of review, the Department will issue instructions to CBP directing it to assess the final assessment rates (if above de minimis) uniformly on all entries of subject merchandise made by the relevant importer or sold to the relevant customer during the POR.
The Department clarified its “automatic assessment” regulation on May 6, 2003 (68 FR 23954). This clarification applies to POR entries of subject merchandise produced by Mukand where Mukand did not know that its merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction. For a full discussion of this clarification, see Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).
The following cash-deposit requirements will be effective for all shipments of the subject merchandise 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 Act: (1) the cash-deposit rate for Mukand will be the rate established in the final results of this review (except that if the rate is de minimis, i.e., less than 0.50 percent, no cash deposit will be required); (2) for previously investigated or reviewed companies not listed above, the cash-deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the less-than-fair value (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 subject merchandise; and (4) the cash-deposit rate for all other manufacturers or exporters will continue to be the “all others” rate of 48.80 percent, which is the “all others” rate established in the LTFV investigation. These cash-deposit rates, when imposed, shall remain in effect until further notice.
Notification to Importers 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 occurred and the subsequent assessment of double antidumping duties. Start Printed Page 52083
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.Start Signature
September 4, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-17993 Filed 9-11-07; 8:45 am]
BILLING CODE 3510-DS-S