Antidumping: Carbon steel wire rope from Mexico,
FR, April 07, 1998 › Notices › International Trade Administration
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Federal Register: April 7, 1998 (Volume 63, Number 66)NoticesPage 16967-16971From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr07ap98-44
DEPARTMENT OF COMMERCE
International Trade Administration
A-201-806Carbon Steel Wire Rope from Mexico; Preliminary Results of Antidumping Administrative Review
AGENCY: Import Administration, International Trade Administration, Department of Commerce.
ACTION: Notice of Preliminary Results of Antidumping Duty Administrative Review; Carbon Steel Wire Rope from Mexico.
SUMMARY: The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on steel wire rope from Mexico in response to a request by respondent, Aceros Camesa S.A. de C.V. (Camesa). This review covers exports of subject merchandise to the United States during the period March 1, 1996 through February 28, 1997.
We have preliminarily determined that sales have not been made below normal value (NV). If these preliminary results are adopted in our final results, we will instruct U.S. Customs to liquidate entries without regard to antidumping duties. Interested parties are invited to comment on these preliminary results. Parties who submit comments are requested to submit with each comment (1) a statement of the issue and (2) a brief summary of the comment.
EFFECTIVE DATE: April 7, 1998.
FOR FURTHER INFORMATION CONTACT: Leah Schwartz or Maureen Flannery, AD/ CVD Enforcement, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482- 3782 or (202) 482-3020.
Applicable Statute and Regulations
Unless otherwise stated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise stated, all citations to the Department's regulations are references to the regulations as codified at 19 CFR Part 353 (April 1996).
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register the antidumping duty order on steel wire rope from Mexico on March 25, 1993 (58 FR 16173). On March 7, 1997 we published in the Federal Register (62 FR 10521) a notice of opportunity to request an administrative review of the antidumping duty order on steel wire rope from Mexico covering the period March 1, 1996 through February 28, 1997.
In accordance with
[Page 16968]conduct an administrative review of its sales. We published a notice of initiation of this antidumping duty administrative review on May 21, 1997 (62 FR 27720).
On September 18, 1997, we solicited comments from Camesa and from petitioner, the Committee of Domestic Steel Wire Rope and Specialty Cable Manufacturers, regarding the product characteristics used to match subject merchandise sold in the United States to foreign like products sold in the home market. We received comments from petitioner on September 25, 1997 and comments from Camesa on September 26, 1997. (See the Model Match section below for further discussion.)
On September 29, 1997, petitioner requested that the Department initiate an investigation of sales below the cost of production (COP) for Camesa. Based on our analysis of petitioner's COP allegation, we initiated an investigation of sales at less than COP, pursuant to section 773(b) of the Act. (See Memorandum For Edward Yang from Leon McNeill, Steel Wire Rope from Mexico: Whether to Initiate a Sales Below Cost Investigation, October 6, 1997.) We received cost data from Camesa on December 1, 1997 and December 29, 1997.
Under section 751(a)(3)(A) of the Act, the Department may extend the deadline for completion of administrative reviews if it determines that it is not practicable to complete the review within the established time limit. The Department published a notice of extension of the time limit for the preliminary results in this case, on October 22, 1997. See Steel Wire Rope from Mexico: Extension of Time Limits for Preliminary Results of Antidumping Duty Administrative Review, 62 FR 54831 (October 22, 1997). On January 5, 1998, the Department published a second notice of extension of the time limit for the preliminary results. See Steel Wire Rope from Mexico: Extension of Time Limits for Preliminary Results of Antidumping Duty Administrative Review, 63 FR 206 (January 5, 1998). The Department is conducting this administrative review in accordance with section 751(a) of the Act.
Scope of the Review
The product covered by this review is steel wire rope. Steel wire rope encompasses ropes, cables, and cordage of iron or carbon steel, other than stranded wire, not fitted with fittings or made up into articles, and not made up of brass plated wire. Imports of these products are currently classifiable under the following Harmonized Tariff Schedule (HTS) subheadings: 7312.10.9030, 7312.10.9060 and 7312.10.9090.
Excluded from this review is stainless steel wire rope, which is classifiable under the HTS subheading 7312.10.6000, and all forms of stranded wire, with the following exception.
Based on the final affirmative determination of circumvention of antidumping duty order, 60 FR 10831 (February 28, 1995), the Department has determined that steel wire strand, when manufactured in Mexico by Camesa and imported into the United States for use in the production of steel wire rope, falls within the scope of the antidumping duty order on steel wire rope from Mexico. Such merchandise is currently classifiable under subheading 7312.10.3020 of the HTS.
Although HTS subheadings are provided for convenience and Customs purposes, the written description of the scope of this order remains dispositive.
This review covers one manufacturer and exporter, Camesa, and the period March 1, 1996 through February 28, 1997.
Verification
As provided in section 782(i) of the Act, we verified information provided by Camesa using standard verification procedures, including on-site inspection of the manufacturer's facilities, examination of relevant sales and financial records, and selection of original documentation containing relevant information. Our verification results are outlined in the public version of the verification report.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all products produced by Camesa covered by the description in the ``Scope of Review'' section, above, and sold in the home market during the period of review (POR) to be foreign like products for the purposes of determining appropriate product comparisons with U.S. sales. In the Product Concordance section (Appendix V) of the questionnaire, we provided the following hierarchy of product characteristics to be used for reporting identical and most similar comparisons of merchandise: 1) type of steel wire (finishing type), 2) diameter of wire rope, 3) type of core, 4) class of wire rope, 5) grade of steel, 6) number of wires per strand, 7) design of strands, and 8) lay of rope. In response to arguments raised by petitioner regarding the use of certain product characteristics as model match criteria, we solicited comments from both parties on September 18, 1997. Based on our analysis of the comments we received, our findings at verification, and information contained in Camesa's submissions, we have preliminarily determined not to change the model match criteria set forth in our June 11, 1997 questionnaire. (See the Memorandum from Leah Schwartz to Edward Yang, dated March 31, 1998: Model Matching Criteria in the First Administrative Review of Steel Wire Rope from Mexico (Model Match Memo).)
Camesa requested to limit its reporting of home market sales of steel wire rope during the POR because it claimed that it sold only a limited number of models of steel wire rope to the United States, and that many of its home market models of steel wire rope would not match the steel wire rope sold to the United States. We told Camesa that it might report only the home market sales of identical or most similar foreign like products sold during the POR, but that we might, at a later date, require the reporting of additional home market sales at short notice. In the sales section of its questionnaire response, Camesa limited its reporting of home market sales to one general category of steel wire rope which encompasses the specific models of steel wire rope sold to the United States. In the COP section of the questionnaire response, Camesa reported data for a smaller, more specific group of steel wire rope products which it considered to be identical or most similar to the subject merchandise sold to the United States. In its sales response, Camesa provided a comprehensive list of all steel wire rope products which Camesa manufactures for sale in the home market. Upon examination of this information, and the results of our verification of Camesa's home market sales and costs, we preliminarily determine that the steel wire rope models which Camesa did not report are neither identical nor most similar to steel wire rope that Camesa sold to the United States during the POR. Moreover, the Department verified that Camesa had home market sales of identical or most similar models in the home market during the period of time contemporaneous with the U.S. sales. We preliminarily determine that the models for which Camesa submitted cost information are identical and most similar to the models sold to the United States.
United States Price
We based United States price on export price (EP), as defined in section 772(a) of the Act, because the merchandise was sold directly by the exporter to unaffiliated U.S. purchasers
[Page 16969]prior to the date of importation and constructed export price was not indicated by other facts of record.
The Department calculated EP for Camesa based on packed, delivered prices to customers in the United States. We made deductions, where applicable, for foreign inland freight, U.S. Customs duties, and brokerage and handling, in accordance with
Normal Value
Based on a comparison of the aggregate quantity of home-market and U.S. sales, we determined that the quantity of foreign like product sold in the home market was sufficient to permit a proper comparison with the sales of the subject merchandise to the United States, pursuant to section 773(a) of the Act. Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the price (exclusive of value-added tax (VAT)) at which foreign like product was first sold for consumption in the home market, in the usual commercial quantities and in the ordinary course of trade. All of Camesa's home market sales were made to unaffiliated customers.
Cost of Production Analysis
Section 773(b)(1) of the Act provides that, whenever the Department has reasonable grounds to believe or suspect that home market sales under consideration for the determination of NV have been made at below-cost prices, it shall determine whether, in fact, there were below-cost sales. Based on our analysis of petitioner's September 29, 1997 allegation of sales below COP, and in accordance with section 773(b)(2)(A)(ii) of the Act, the Department determined that reasonable grounds exist to believe or suspect that Camesa made below-cost home market sales during the POR. Accordingly, we requested and obtained from Camesa the cost data necessary to determine whether below-cost sales occurred during the POR. Before making any NV comparisons for Camesa, we conducted the COP analysis described below.
We calculated the COP based on the sum of Camesa's cost of materials and fabrication employed in producing the foreign like product, plus amounts for home market selling, general, and administrative expenses (SG&A), and the cost of all expenses incidental to placing the foreign like product in condition packed ready for shipment in accordance with section 773(b)(3) of the Act. Mexico experienced significant inflation during the POR, as measured by the Consumer Price Index issued by the Bank of Mexico. Therefore, in order to avoid the distortive effects of inflation on our comparisons of costs and prices, we used monthly, model-specific cost data provided by respondent. See, e.g., Porcelain-On-Steel Cookware from Mexico: Preliminary Results of Administrative Review, 63 FR 1430, 1432 (January 9, 1998) and Notice of Preliminary Results of Antidumping Duty Administrative Review: Certain Welded Carbon Steel Pipe and Tube from Turkey, 63 FR 6155, 6156 (February 6, 1998). We calculated a model- specific total cost of manufacture (COM) for each month of the POR and indexed these costs to a common point (i.e. February 1997, the last month of the POR) using the consumer price index for Mexico as maintained by the Bank of Mexico. We then divided the sum of the monthly model-specific costs by the total model-specific production quantity to obtain a model-specific POR weighted-average cost corresponding to the February 1997 reference point. The weighted average COM was then restated based on the currency value of each respective month. We multiplied Camesa's SG&A and finance rates by the monthly COMs and added these amounts to derive product-specific monthly COPs. We relied on the home market sales and COP information provided by Camesa in its questionnaire responses and implemented changes based on findings at verification (See the Analysis Memo).
We compared the monthly weight-averaged per unit COP figures, indexed to account for the effects of inflation as noted above, to home market sales of foreign like product as required under section 773(b) of the Act, in order to determine whether these sales were made at prices below COP. In determining whether to disregard home market sales made at prices below COP, we examined whether: (1) such sales were made in substantial quantities within an extended period of time; and (2) such sales were made at prices which permitted recovery of all costs within a reasonable period of time. We compared the model-specific COP, plus packing, and net of direct selling expenses, to the reported home market prices less any applicable movement charges, discounts, and direct selling expenses.
In accordance with section 773(b)(2)(C), where less than 20 percent of home market sales of a given model were made at prices less than the COP, we did not disregard any below-cost sales of that model because we determined that the below-cost sales were not made in ``substantial quantities.'' Where 20 percent or more of home market sales during the POR were made at prices less than the COP, we disregarded the below- cost sales because we determined that the below-cost sales were made in ``substantial quantities'' and at prices which would not permit the recovery of all costs within reasonable period of time in accordance with section 773(b)(2)(D) of the Act.
On January 8, 1998, the Court of Appeals for the Federal Circuit issued a decision in CEMEX v. United States, 133 F.3d 897 (Fed Cir., 1998). In that case, based on the pre-URAA version of the Act, the Court discussed the appropriateness of using constructed value (CV) as the basis for foreign market value when the Department finds home market sales to be outside the ``ordinary course of trade.'' This issue was not raised by any party in this proceeding. However, the URAA amended the definition of sales outside the ``ordinary course of trade'' to include sales below cost. See Section 771(15) of the Act. Consequently, the Department has reconsidered its practice in accordance with this court decision and has determined that it would be inappropriate to resort directly to CV, in lieu of foreign market
[Page 16970]sales, as the basis for NV if the Department finds foreign market sales of merchandise identical or most similar to that sold in the United States to be outside the ``ordinary course of trade.'' We will match a given U.S. sale to foreign market sales of the next most similar model when all sales of the most comparable model are below cost. The Department will use CV as the basis for NV only when there are no above-cost sales that are otherwise suitable for comparison. Therefore, in this proceeding, when making comparisons in accordance with section 771(16) of the Act, we considered all products sold in the home market, as described above in the ``Scope of Review'' section of this notice, that were in the ordinary course of trade for purposes of determining appropriate product comparisons to U.S. sales. Where there were no sales of identical merchandise in the home market made in the ordinary course of trade to compare with U.S. sales, we compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade, based on the characteristics listed in Sections B and C of our antidumping questionnaire.
Price-to-Price Comparisons
Pursuant to section 777A(d)(2), we compared the EPs of individual transactions to the monthly weighted-average price of sales of the foreign like product where there were sales at prices above COP, as discussed above. We based NV on packed, delivered prices to unaffiliated purchasers in the home market. We made adjustments, where applicable, in accordance with section 773(a)(6) of the Act. Where applicable, we made adjustments to home market price for invoice corrections, discounts, and inland freight. We also made a circumstance-of-sale adjustment for differences in credit, warranty, and insurance expenses, pursuant to section 773(a)(6)(C)(iii) of the Act. Because credit, warranty, and insurance expenses are incurred on a sale-by-sale basis and directly related to sales, we have treated these expenses as direct selling expenses in the applicable market(s). Accordingly, we made the circumstance-of-sale adjustments by adding the amounts of U.S. credit for each U.S. sale to the NV, and subtracting the home market credit and warranty expense amounts from NV. At verification we found that Camesa did not incur U.S. warranty expenses which it reported. Therefore, we did not add the reported per-unit warranty expense amount to NV. In order to adjust for differences in packing between the two markets, we increased home market price by U.S. packing costs and reduced it by home market packing costs. Prices were reported net of VAT and, therefore, no deduction for VAT was necessary.
Home Market Credit Expense
During the POR, Camesa did not have any short-term borrowings in pesos. In cases where there are no borrowings in the currency of the sales made, it is the Department's practice to use external information about the cost of borrowing in a particular currency. (See Final Determination of Sales at Less Than Fair Value: Fresh Cut Roses from Colombia, 60 FR 6980, 6998 (February 6, 1995); and Import Administration Policy Bulletin 98.2 (February 23, 1998).) Therefore, for these preliminary results, we are recalculating Camesa's home market credit expense using the average interbank equilibrium rate (abbreviated TIIE in Spanish) for the POR as published by the Bank of Mexico. We find that the rate is both reasonable and representative of usual commercial behavior in Mexico based on the sample rates quoted by other Mexican banks as submitted in Camesa's questionnaire responses.
Sales of Strand to U.S. Affiliate
Pursuant to the final affirmative determination of circumvention of this antidumping duty order (see Steel Wire Rope from Mexico: Affirmative Final Determination Circumvention of Antidumping Duty Order, 60 FR 10831, (February 28, 1995)), steel wire strand, when manufactured in Mexico by Camesa and imported into the United States for use in the production of steel wire rope, falls within the scope of the antidumping duty order on steel wire rope from Mexico. Therefore, in our June 11, 1997 antidumping questionnaire, we requested that Camesa: (1) report separately all sales of steel wire strand imported into the United States during the period of review for use in the manufacture of steel wire rope; and (2) report the monthly quantity and value of sales of steel wire strand which is imported into the United States during the period of review and which is not intended for use in the manufacture of steel wire rope (see pages C-1 and C-2 of the questionnaire). In its August 11, 1997 questionnaire response, Camesa reported that during the POR it ``did not export any strand products that are subject to the antidumping order to United States, and its U.S. affiliates did not sell any steel wire rope manufactured using such imported strand products. Accordingly, all of the U.S. sales reported in the sales listing provided in Appendix C-1 are sales of steel wire rope that was entirely produced in and exported from Mexico.'' (See page 40, footnote 17.) At verification, we found that Camesa did sell steel wire strand to its U.S. affiliate during the period of review which it did not report. However, at verification we examined the specifications of the strand that Camesa sold to the United States, and found that it falls outside the scope of the order as defined in the Department's Final Circumvention Determination (60 FR 10831, February 28, 1995) and is not used in the manufacture of steel wire rope. Therefore, the Department is not applying facts available under section 776 of the Act (See the March 31, 1998 verification report and the Analysis Memo.)
Duty Reimbursement
In its September 17, 1997 response, Camesa stated that it was identified as the importer of record in the U.S. Customs entry summary corresponding to the U.S. sales during the POR, because Camesa is responsible for the payment of any import charges to U.S. Customs on the entry. At verification, Camesa further stated that it paid the antidumping duties for certain U.S. sales. Section 353.26 of the Department's regulations state that ``[i]n calculating the United States price, the Secretary will deduct the amount of any antidumping duty which the producer or reseller: (i) [p]aid directly on behalf of the importer; or (ii) [r]eimbursed to the importer.''
Preliminary Results of the Review
As a result of our comparison of EP and NV, we preliminarily determine that the following weighted-average dumping margin exists:
[Page 16971]
Margin Manufacturer/exporter
Period
(percent)
Aceros Camesa S.A. de C.V. (Camesa)..... 3/1/96-2/28/97
0.00
Parties to the proceeding may request disclosure within 5 business days of the date of publication of this notice. Any interested party may request a hearing within 10 days of publication. Pursuant to
The Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. If these preliminary results are adopted in our final results, we will instruct the U.S. Customs Service not to assess antidumping duties on the merchandise subject to review. Upon completion of this review, the Department will issue appraisement instructions directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of steel wire rope products from Mexico entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(c) of the Act: (1) the cash deposit rate for the reviewed company will be the rate established in the final results of this review; (2) for merchandise exported by manufacturers or exporters not covered in this review but covered in the original investigation of sales at less than fair value (LTFV) or a previous review, the cash deposit 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 or a previous review, or the original 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) for all other producers and/or exporters of this merchandise, the cash deposit rate shall be 111.68 percent, the ``all others'' rate established in the LTFV investigation (58 FR 7531, February 8, 1993).
These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.
This notice also serves as a preliminary reminder to importers of their responsibility under
This determination is issued and published in accordance with sections 751(a)(1) of the Act (19 U.S.C. 1675(a)) and
Dated: March 31, 1998. Robert S. LaRussa, Assistant Secretary for Import Administration.
FR Doc. 98-9092Filed4-6-98; 8:45 amBILLING CODE 3510-DS-P
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This document cites
- U.S. Code - Title 19: Customs Duties - 19 USC 1675 - Sec. 1675. Administrative review of determinations
- U.S. Court of Appeals for the Federal Circuit - Cemex, S.A., Plaintiff-Appellant, v. the United States, Defendant-Appellee, and the Ad Hoc Committee of Az-Nm-Tx-Fl Producers of Gray Portland Cement and National Cement Company of California, Inc., Defendants-Appellees., 133 F.3d 897 (Fed. Cir. 1998)
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