Import Administration, International Trade Administration, U.S. Department of Commerce.
On September 30, 2003, the Department of Commerce (the Department) published in the
We preliminarily determine that sales of structural steel beams from Korea have been made at prices below the normal value (NV) by the respondents, INI Steel Company (INI) and Dongkuk Steel Mill Co., Ltd. (DSM). If these preliminary results are adopted in the final results of this administrative review, we will instruct Customs and Border Protection (CBP) to assess antidumping duties based on all appropriate entries.
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, (2) a brief summary of the argument, and (3) a table of authorities.
September 3, 2004.
Mark Flessner or Robert James, AD/CVD Enforcement, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Room 7866, Washington, DC 20230; telephone (202) 482–6312 or (202) 482–0649.
On August 1, 2003 the Department published a notice of opportunity to request an administrative review of the antidumping duty order on structural steel beams from Korea. (
The Department had not disregarded sales of structural steel beams made by DSM at prices below the cost of production (COP) in the most recently completed review of DSM; therefore DSM was not initially required to respond to section D of the questionnaire. On March 2, 2004, petitioners filed an allegation that DSM had made below-cost sales. On April 6, 2004, the Department initiated a cost investigation of DSM, after which DSM was required to respond to Section D of the questionnaire.
Because we disregarded sales of certain products made by INI at prices below the COP in what was at that time the most recently completed review of structural steel beams from Korea (
INI submitted its response to sections A through D on January 16, 2004. On April 6, 2004, the Department issued a supplemental questionnaire to INI, to which INI responded on April 30, 2004. On July 21, 2004, the Department issued a second supplemental questionnaire to INI, to which INI responded on August 11, 2004.
DSM submitted its response to section A of the questionnaire on January 7, 2004, and its response to sections B and C of the questionnaire on February 9, 2004. On March 9, 2004, the Department issued a supplemental questionnaire to DSM for Section A, to which DSM responded on April 6, 2004. On April 15, 2004, the Department issued a supplemental questionnaire to DSM for Section B, to which DSM responded on May 10, 2004. On May 3, 2004, the Department issued a supplemental questionnaire to DSM for Section C, to which DSM responded on May 27, 2004.
DSM submitted its response to Section D of the questionnaire on May 4, 2004. On July 22, 2004, the Department issued an additional supplemental questionnaire to DSM, covering sections A, B, C, and D, to which DSM responded on August 20, 2004.
Both INI and DSM indicated in their initial Section A responses that no further manufacturing in the United States was performed by an affiliate or a contractor, and neither provided responses to Section E of the questionnaire.
Because it was not practicable to complete this review within the normal time frame, on December 16, 2003, the Department extended the time limit for the preliminary results of the administrative review to August 30, 2004 (
The POR is from August 1, 2002, to July 30, 2003.
The products covered by this review are 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 products 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 products that meet the physical and metallurgical descriptions provided above are within the scope of this review unless otherwise excluded. The following products are outside and/or specifically excluded from the scope of this review: structural steel beams greater than 400 pounds per linear foot or with a web or section height (also known as depth) over 40 inches.
The merchandise subject to this review is classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheadings: 7216.32.00000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 7216.99.0010, 7216.99.0090, 7228.70.3040, and 7228.70.6000. Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the merchandise is dispositive.
In accordance with section 771(16) of the Tariff Act, we considered all structural steel beams produced by DSM and INI covered by the description in the “Scope of the Review” section of this notice,
In the previous administrative review, which covered the August 1, 2001 through July 31, 2002 POR, the Department found DSM and Dongkuk Industries Co., Ltd., (DKI) to be affiliated because they were under the common control of a family grouping. (
In the current structural steel beams review, DSM stated in its January 7, 2004, Section A response at page 9 that DKI ceased to be affiliated with DSM as of January 2001 because of a change in DKI's ownership percentage of DSM. However, this change took place prior to the previous (August 1, 2001, through July 31, 2002) POR, and this information was also accounted for in the Department's affiliation decisions in the aforementioned proceedings. Furthermore, DSM acknowledged that some of the major owners of DKI are relatives of some of the major owners of DSM (
To determine whether sales of structural steel beams from Korea to the United States were made at less than normal value (NV), we compared the export price (EP) or the constructed export price (CEP) to the NV, as described in the “Export Price,” “Constructed Export Price,” and “Normal Value” sections of this notice, below. In accordance with section 777A(d)(2) of the Tariff Act, we compared the EPs and CEPs of individual U.S. transactions to the monthly weighted-average NVs of the foreign like product where there were sales at prices above the cost of production (COP), as discussed in the “Cost of Production” section below.
Section 772(a) of the Tariff Act defines EP as “the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser for exportation to the United States * * *,” as adjusted under subsection (c). Section 772(b) of the Tariff Act defines CEP as “the price at which the subject merchandise is first 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, to a purchaser not affiliated with the producer or exporter * * *,” as adjusted under subsections (c) and (d). For the purposes of this administrative review, DSM has classified all of its U.S. sales as CEP sales, and INI has classified all of its U.S. sales as EP sales.
For INI, we calculated the price of U.S. sales made prior to importation to unaffiliated purchasers in the United States. We made deductions from the reported gross price for movement expenses in accordance with section 772(c)(2)(A) of the Tariff Act; these included, where appropriate, foreign inland freight from plant to warehouse, foreign inland freight from plant/warehouse to port of exportation, foreign warehousing, international freight, U.S. duties, and U.S. brokerage expenses. We made an addition to U.S. price for duty drawback pursuant to section 772(c)(1)(B) of the Tariff Act.
For DSM, we calculated CEP based on the prices from Dongkuk International, Inc. (DKA), a U.S. affiliate of DSM, to unaffiliated purchasers in the United States. We made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Tariff Act; these included, where appropriate, foreign inland freight from the plant to the port of export, foreign brokerage and handling expenses incurred by DSM and DKI (
Additionally, we made deductions for expenses that bear a direct relationship to the sale in the United States (
For CEP sales, we also made an adjustment for profit in accordance with section 772 (d)(3) of the Tariff Act. We deducted the profit allocated to expenses deducted under sections 772(d)(1) and 772(d)(2) in accordance with sections 772(d)(3) and 772(f) of the Tariff Act. In accordance with section 772(f) of the Tariff Act, we computed profit based on total revenue realized on sales in both the U.S. and home markets, less all expenses associated with those sales. We then allocated profit expenses incurred with respect to U.S. economic activity, based on the ratio of total U.S. expenses to total expenses for both the U.S. and home markets.
In accordance with section 773(a)(1)(B)(i) 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 CEP transaction. The NV LOT 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 selling, general and administrative (SG&A) expenses and profit. For EP, the LOT is also the level of the starting price sale, which is usually from the exporter to the importer. For CEP, it is the level of the constructed sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or CEP sales, we examine 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 LOT and that 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 LOT of the export transaction), we make an LOT adjustment under section 773(a)(7)(A) of the Tariff Act. Finally, for CEP sales, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the differences in the levels between NV and CEP sales affects price comparability, we adjust NV under section 773(A)(7)(B) of the Tariff Act (the CEP offset provision). (
In identifying levels of trade for CEP, we considered only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Tariff Act. (
In implementing these principles in this administrative review, we obtained information from INI and DSM about the marketing stages involved in its reported U.S. and home market sales, including descriptions of the selling activities performed for each channel of distribution.
INI indicated its home market sales were through two channels (sales to unaffiliated distributors, and sales to affiliated and unaffiliated end-users) and its U.S. sales were through one channel (to unaffiliated U.S. customers). INI did not claim any distinct levels of trade, and its descriptions of selling functions indicated very little variation
DSM claimed only one level of trade in the home market. (
DSM claimed one level of trade in the U.S. market. DSM reported it sold through one channel of distribution in the U.S. market, directly from its production facility to the unaffiliated U.S. customer. However the complete sales process was as follows: DSM sold the merchandise to an affiliated Korean trading company, DKI, which then resold the merchandise to another affiliate, DKA, which resold the merchandise to the unaffiliated U.S. customer. (
To determine the LOT of the respondent's CEP sales, we analyze the cumulative selling functions performed by DSM and by DKI. With respect to the assorted selling functions identified by DSM and its affiliates in DSM's response, the record indicates that those selling functions were the same for all U.S. sales. (
To determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV (
The Department may calculate NV based on a sale to an affiliated party only if it is satisfied that the price to the affiliated party is comparable to the prices at which sales are made to parties not affiliated with the respondent,
DSM reported no sales to affiliated parties in the home market. INI reported that a small portion of its home market sales were to affiliated parties. Those sales to affiliated parties amounted to less than five percent of total home market sales, and INI was not required to report downstream sales of those affiliated parties. Sales to affiliated customers in the home market not made at arm's-length prices are excluded from our analysis because we consider them to be outside the ordinary course of trade. (
In accordance with section 773(b)(3) of the Tariff Act, we calculated the weighted-average COP for each model based on the sum of material and fabrication costs for the foreign like product, plus amounts for selling expenses, general and administrative (G&A) expenses, interest expenses and packing costs. The Department relied on the COP data reported by INI and DSM.
In determining whether to disregard home market sales made at prices below the COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Tariff Act, whether, within an extended period of time, such sales were made in substantial quantities, and whether such sales were made at prices which permitted the recovery of all costs within a reasonable period of time. Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than 20 percent of the respondent's home market sales of a given model were at prices below the COP, we did not disregard any below-cost sales of that model because we determined that the below-cost sales were not made within an extended period of time in “substantial quantities.” Where 20 percent or more of the respondent's home market sales of a given model were at prices less than COP, we disregarded the below-cost sales because: (1) they were 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 our comparison of prices to the weighted-average COPs for the POR, they 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.
To determine whether INI made sales at prices below COP, we compared the product-specific COP figures to home market prices net of reported billing adjustments, discounts and rebates, and applicable movement charges of the foreign like product as required under section 773(b) of the Tariff Act. To determine whether DSM made sales at prices below COP, we compared the product-specific COP figures to home market prices net of applicable movement charges of the foreign like product as required under section 773(b) of the Tariff Act.
Our cost test for INI and for DSM revealed that for home market sales of certain models, less than 20 percent of the sales volume (by weight) of those models were at prices below the COP. We therefore retained all such sales observations in our analysis and used them in the calculation of NV. Our cost
In accordance with section 773(e) of the Tariff Act, for both INI and DSM, we calculated CV based on the sum of the respondent's material and fabrication costs, SG&A expenses, profit, and U.S. packing costs. We calculated the COP component of CV as described above in the “Cost of Production Analysis” section of this notice. In accordance with section 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 home market direct and indirect selling expenses.
We calculated NV based on prices to unaffiliated customers and prices to affiliated customers we determined to be at arm's length for home market sale observations that passed the cost test, and made adjustments, where appropriate, for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Tariff Act.
For INI, we made adjustments to gross unit price, where applicable, for billing adjustments, discounts and rebates, and interest revenue, and made deductions, where applicable, for foreign inland freight (
For DSM, we based NV on the home market prices to unaffiliated purchasers. We made adjustments for discounts. We made adjustments, where appropriate, for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Tariff Act. We made adjustments, where applicable, for movement expenses (
We made currency conversions into U.S. dollars, in accordance with section 773A(a) of the Tariff Act, based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.
As a result of our review, we preliminarily determine the weighted-average dumping margin for the period August 1, 2002, through July 31, 2003, 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 thirty days of publication of these preliminary results. (
The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate appraisement instructions directly to CBP upon completion of the review. For the preliminary results, we calculated importer-specific assessment rates based upon importer information provided by INI and DSM. Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of structural steel beams from Korea 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 companies reviewed will be the rates established in the final results of review;
(2) For any previously reviewed or investigated company 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 previous 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 merchandise; and
(4) If neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will be the “all others” rate of 37.21 percent from the LTFV investigation; (
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's 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.