Antidumping: Carbon steel wire rope from— Mexico,

[Federal Register: July 27, 1999 (Volume 64, Number 143)]

[Notices]

[Page 40549-40553]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr27jy99-33]

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-806]

Carbon Steel Wire Rope From Mexico: Final Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative Review.

SUMMARY: On March 8, 1999, the Department of Commerce (the Department) published in the Federal Register the preliminary results of its antidumping duty administrative review of the antidumping duty order on carbon steel wire rope from Mexico (64 FR 10979). This review covers one manufacturer/exporter of the subject merchandise to the United States, Aceros Camesa S.A. de C.V. (Camesa), and the period of March 1, 1997 through February 28, 1998. We gave interested parties an opportunity to comment on the preliminary results of review. We received comments from Camesa and from the Committee of Domestic Steel Wire Rope and Specialty Cable

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Manufacturers (the petitioner). We have not changed the results from those presented in the preliminary results of review.

EFFECTIVE DATE: July 7, 1999.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Laurel LaCivita, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington DC 20230; telephone (202) 482-0666, (202) 482-4236, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

Unless otherwise indicated, 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. In addition, unless otherwise indicated, all citations to the Department's regulations are to the provisions codified at 19 CFR part 351 (April 1998).

Background

On March 8, 1999, the Department published in the Federal Register the preliminary results of the review of the antidumping duty order on carbon steel wire rope from Mexico (64 FR 10979). On April 7, 1999, we received comments from the petitioner and Camesa. The petitioner and Camesa submitted rebuttal comments on April 12, 1998.

The Department has now completed this antidumping duty administrative review in accordance with section 751(b) of the Act.

Scope of Review

The product covered by this review is steel wire rope. Steel wire rope encompasses ropes, cables, and cordage of 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 HTS subheading 7312.10.6000, and all forms of stranded wire, with the following exception.

In the final affirmative determination of circumvention of antidumping duty order, 60 FR 10831 (February 28, 1995), the Department 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 for Customs purposes, our own written description of the scope of this review remains dispositive.

This review covers one manufacturer/exporter, Camesa, and the period March 1, 1997 through February 28, 1998.

Analysis of the Comments Received

We gave interested parties an opportunity to comment on the preliminary results of review. We received case and rebuttal briefs from both petitioner and Camesa.

Comment 1: Whether Camesa's Sales to the United States Constitute Bona Fide Transactions

The petitioner contends that the timing and nature of Camesa's sales to the United States during the period of review (POR) indicate that they were not bona fide transactions. The petitioner claims that the sales were contrived for the purpose of orchestrating an export scheme to serve as the basis for an administrative review and adjustment of the antidumping duty deposit requirement. Consequently, the petitioner contends, the Department must disregard these sales and determine that no proper basis existed for an administrative review of the March 1, 1997 through February 28, 1998 period.

The petitioner argues that the circumstances of the sales indicate that they were contrived for purposes of manipulating the Department's antidumping analysis. In this regard, the petitioner points to the small number of sales and the late date of the sales, occurring at the end of the POR, as evidence that these sales were concocted by Camesa solely for purposes of justifying an administrative review and obtaining a zero margin.

The petitioner also contends that Camesa's one customer during the POR was not sincerely interested in purchasing general purpose steel wire rope from Camesa. According to the petitioner, Camesa's sole U.S. purchaser during the POR had been, up until approximately one month before the date of the U.S. sales, a purchaser of fishing ropes, exclusively. Because these fishing ropes were entered in-bond for subsequent export to foreign destinations, they were not subject to review. The petitioner argues that the customer's sudden switch, shortly before the end of the review period, to the general purpose ropes subject to the current review is evidence that the sales were contrived for the purpose of manipulating Camesa's dumping margin.

Finally, the petitioner contends that Department precedent equates the term bona fide with commercially reasonable, and points to U.S. Customs data to demonstrate that Camesa's sales were not made at commercially reasonable prices. These customs figures indicate that, for the month of Camesa's sales to the United States, the average price of all goods falling under the tariff schedule subheading that includes the products sold by Camesa during the POR is less than the prices charged by Camesa.

Camesa contends that the petitioner has not provided any evidence beyond its own speculation that the sales in question were not bona fide. Camesa argues that the relatively small number and the late timing of the sales to the United States during the POR were the result of Camesa's difficulty in finding U.S. customers in the face of the high cash deposit rate (111.68 percent) in effect during the POR for imports of its steel wire rope products, not the result of an attempt to manipulate the dumping margin.

Similarly, Camesa argues, there is no basis for questioning the genuineness of Camesa's U.S. customer's need for steel wire rope. The only evidence on the record regarding that customer's need for subject merchandise suggests a legitimate business motivation.

Finally, Camesa has three responses to the customs figures submitted by the petitioner. First, Camesa contends that petitioner's submission was untimely, having been filedwith the Department after the deadline stipulated in 19 CFR 351.301(b)(2). Second, Camesa claims that it is unreasonable to compare the prices of its products sold to the United States with the average price of all imported products falling within a tariff schedule subheading. Camesa claims that products within this subheading vary greatly in important characteristics that significantly affect price, and, as support, Camesa demonstrates how the catalog prices for its own products falling within this subheading vary greatly. Thus, argues Camesa, the average price of all products within this subheading imported into the United States will vary greatly according to the composition of the products imported. Third, Camesa argues that even if the Department were to accept the figures as timely and find them significant in judging the commercial reasonableness of Camesa's U.S. sales prices, the

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petitioner has misinterpreted the law regarding the importance of a sale's commercial reasonableness. According to Camesa, in order to prove that sales are not bona fide it is not enough to show that their sales terms are commercially unreasonable. Camesa cites Silicon Metal from Brazil: Notice of Final Results of Antidumping Duty Administrative Review: ``[T]he Department only disregards U.S. sales in exceptional circumstances where the sale is commercially unreasonable and other facts and circumstances indicate an attempt to manipulate the dumping margins.'' 64 FR 6305, 6317 (Feb. 9, 1999) (Silicon Metal from Brazil).

DOC Position: We agree with Camesa. While the Department's authority to disregard U.S. sales in administrative reviews as non-bona fide transactions has been recognized by the Court of International Trade (CIT), see, e.g., PQ Corp. v. United States, 652 F. Supp. 724, 729 (CIT 1987), there is no express statutory or regulatory provision that addresses or guides the exclusion of U.S. sales. Nevertheless, the Department has the ``authority to prevent fraud upon its proceedings.'' Chang Tieh Indust. Co., Ltd. v. United States, 840 F.Supp. 141, 146 (CIT 1993). Thus, the Department has the discretion to exclude certain U.S. sales where those sales are clearly ``distorting or unrepresentative.'' American Permac, Inc. v. United States, Slip Op. 92-8 (Feb. 4, 1992).

In order to determine whether sales should be excluded as non-bona fide transactions, the Department in the past has looked at a variety of factors indicating ``whether the transaction has been so artificially structured as to be commercially unreasonable.'' Certain Cut-to-Length Carbon Steel Plate from Romania: Notice of Rescission of Antidumping Duty Administrative Review, 63 FR 47232 (Sep. 4, 1998) (Steel Plate from Romania); see also Silicon Metal from Brazil, 64 FR at 6317 (noting that the Department will exclude U.S. sales where exceptional circumstances demonstrate commercially unreasonable sales terms and an attempt to manipulate the margin calculations).

However, a sale will not be excluded simply because it was made for the purpose of obtaining a smaller margin, ``as long as the sale itself is at least arguably commercially reasonable.'' Steel Plate from Romania, 63 FR at 47234; see also P.Q. Corp., 652 F. Supp. at 729 (explaining that an overpriced transaction created solely for the purpose of lowering the margin may be acceptable if the transaction was in fact sold at arm's length). Rather, the Department looks at the totality of the circumstances to determine whether the transactions in question are artificial, and thus, would not provide an appropriate basis for determining the respondent's U.S. pricing behavior. See Manganese Metal from the PRC, 60 FR 56,045 (Nov. 6, 1995) (``Based on the totality of the circumstances, . . . the Department determines, . . . that these were not bona fide sales for commercial purposes and, therefore, would not provide an appropriate basis for determining

[respondent's] pricing behavior for sales to the United States. Therefore, these sales have been disregarded.''); see also Steel Plate from Romania (``Based on the cumulative weight of these factors, we determine that this sale was not bona fide because it was not a commercially reasonable transaction and involved selling procedures atypical of (the exporter's and importer's) normal business practices.'')

We agree that the facts cited by the petitioner to prove that the sale was artificially structured, namely the small number of sales, the single customer, and the late sale date, could be, as Camesa argues, simply the result of the high cash deposit rate on steel wire rope from Mexico in effect during the POR. Additionally, while the number of sales made by Camesa during the POR was small, the quantity of goods sold was substantial. Finally, nothing in the record suggests that the documentation for the transactions was fabricated, see Sulfanic Acid from Hungary, 58 FR 8256, 8257 (Feb. 12, 1993) (the Department applied BIA where documents discovered at verification indicated that information might have been fabricated for the purpose of the investigation); compare Salmon from Norway, 62 FR 1430 (Jan. 10, 1997) (sales were included where there was no evidence of fabricated documents or other suspicious activity), or that the sales were not made at arm's length. Although Customs data generally provides a good basis for determining whether sales have been made at commercially reasonable prices we agree with Camesa in this instance that the price figure provided by the petitioner covers a range of products so broad that it cannot be meaningfully compared with Camesa's sales prices during the POR.

The petitioner's questioning of Camesa's customer's genuine interest in purchasing steel wire rope is not supported by the record. The only evidence on the record indicating the customer's motive for its purchase, while not elaborate, nevertheless indicates a genuine desire to become a customer of Camesa's and a purchaser of steel wire rope within the scope of the order. Please see Camesa's June 5, 1998 response, appendix A-6-B, document 1 for another explanation of the customer's motive, due to the proprietary nature of the explanation.

Because the petitioner has not provided sufficient evidence to demonstrate that the sales involved were fabricated or otherwise commercially unreasonable, and we have found no other evidence demonstrating that the sales were not bona fide transactions, we have continued to include these sales in our margin calculation in these final results of review.

Comment 2: Whether the Department Should Reject Camesa's Home Market Sales Data as Inaccurate and Inherently Unreliable and Instead Use Adverse Facts Available

In the Department's preliminary results of review, we rejected Camesa's second home market sales database, submitted on October 20, 1998, noting that it contained discrepancies with the original database, submitted on July 7, 1998. We concluded that these discrepancies constituted new information not requested by the Department. \1\ Because this new information was not requested and was not submitted within the time period stipulated by 19 CFR 351.301(b)(2), we rejected the second database as untimely.

\1\ On October 20, 1998, Camesa submitted its second home market sales database in response to our supplemental questionnaire, which requested that Camesa submit information on product characteristics and additional sales. In doing so, however, it did not simply submit an addendum to the first database, but instead, resubmitted the entire home market sales database; i.e., all data regarding home market sales were resubmitted. Some of the fields in this second database contained information conflicting with the first database, even though we had not requested Camesa to revise any of the previously submitted fields. We had only requested the inclusion of additional fields; i.e., product characteristics, and the inclusion of additional sales observations.

The petitioner argues that these discrepancies, which the Department described as ``significant and unexplained,'' see Memorandum to the File from Case Analyst (March 2, 1999) at 2, raise serious questions about the accuracy of all home market data submitted by Camesa during the POR. The petitioner further argues that, by submitting new information in its second database, Camesa was admitting that its first submission was inaccurate. According to the petitioner, ``submission of such significant adjustments in its supplemental filing is an overt and explicit admission that its

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initial database was inaccurate.'' The petitioner notes that the discrepancies affected the reporting of all sales that were contained in both databases and affected numerous fields reported for these sales, including gross unit price and several adjustments used by the Department in calculating normal value. The petitioner concludes that the Department should reject Camesa's home market data in favor of facts otherwise available.

Camesa argues that the discrepancies between its first and second databases do not constitute an admission that Camesa's first submission is inaccurate, but merely were the result of mistakes made under the pressure of meeting the Department's filing deadline. Camesa argues that these discrepancies are a result of mistakes made in compiling the second database, not a result of an attempt by Camesa to revise the data it reported in its first submission. These discrepancies, Camesa claims, do not call into question the accuracy of the underlying data.

Moreover, Camesa points to several expenses for which, in its July 7, 1998 response to the Department's first questionnaire, Camesa provided worksheets and other documents to explain and support the data reported in the July 7, 1998 database. Camesa attempts to explain some of the discrepancies found in three of the fields reported in its home market database. It argues that it could not resolve all of the discrepancies without placing new information on the record, which had been closed per Sec. 351.301(b)(2). \2\ The petitioner contends that Camesa's attempts at resolving the discrepancies are inadequate.

\2\ The petitioner did not argue that Camesa submitted untimely information in the attempts, in its April 8, 1999 case brief, it made to resolve the discrepancies.

Finally, Camesa contends that, even if it had conceded there were errors in its initial sales listing, that fact alone would not justify the resort to an adverse inference, as Camesa has cooperated fully in this review.

DOC Position: We agree with Camesa. The record does not indicate that the original database is inaccurate or unreliable, and we do not find that Camesa failed to act to the best of its ability.

Under section 776(a) of the Act and 19 CFR 351.308, the Department will only rely on facts otherwise available when: (1) Necessary information is not on the record; or (2) the respondent has withheld information, fails to provide requested information, significantly impedes a proceeding, or provides information that cannot be verified. Furthermore, in accordance with section 776(b) of the Act, the Department will rely on adverse inferences only where the respondent has failed to cooperate by not acting to the best of its ability to comply with the Department's requests for information.

Although the Department did not conduct a verification of Camesa during the POR, we did, per Department policy, issue an extensive questionnaire to Camesa requesting support for all sales data provided to us. We found some deficiencies in Camesa's response to this initial questionnaire and thus issued a supplemental questionnaire. Camesa's responses to both questionnaires, in combination, provided the Department with sufficient explanations of how Camesa calculated the data it reported, along with support for the raw numbers underlying its response. Thus, the respondent did not withhold information or fail to provide requested information. As such, Camesa's responses were complete and provided all of the information necessary for margin calculations. We note that the petitioner did not comment on Camesa's response to either of our questionnaires or otherwise indicate that it was concerned with the quality of Camesa's reported data, until we had issued our preliminary results of review.

Moreover, it is important to note that we did not request the second database as the result of having found errors in the calculations or data used by Camesa in compiling the first database. We requested the second database because we had determined that Camesa needed to report a larger number of sales of similar merchandise, and to report physical characteristics for all sales. \3\ Thus, our rejection of the second database did not leave unanswered concerns about the quality of Camesa's previously submitted data or calculations.

\3\ The Department was able to reach its preliminary conclusions without the use of this expanded sales information. The initial, more limited sales information provided by Camesa included above- cost sales of identical products that were contemporaneous with all sales in the United States. We therefore did not need to examine sales of similar merchandise, and the necessary physical characteristics were taken from an appendix attached to the written, narrative portion of Camesa's October 20, 1998 submission. Thus, the second sales database was not ultimately necessary for our calculations.

Finally, after having rejected Camesa's second database in our preliminary results of review, and thus having removed it from consideration, we cannot now use it for purposes of impugning the first database. Even if, however, the second database were available for our current analysis, we could not conclude that because the first database contained some inaccuracies, all of Camesa's submitted home market data must also be inaccurate. As explained above, the submissions on the record were timely filedand are complete and supported by documentation in the record. Therefore, we did not reject Camesa's home market sales data. As such, it is not necessary to rely on adverse facts available.

Comment 3: Whether The Department Must Affirm Its Preliminary Determination That Camesa Sold Products in the Home Market at Below Cost of Production

The petitioner argues that the Department correctly applied the sales-below-cost test to all products ``under the consideration for the determination of normal value.'' The petitioner also argues that sales ``under consideration for the determination of normal value'' should include all home market sales reported.

Respondents did not comment on this issue.

DOC Position: We agree with the petitioner that a sales-below-cost test must be conducted on all home market sales reported, and affirm our preliminary finding that Camesa made sales below cost in its home market during the POR.

Comment 4: Whether the Department Should Summarily Reject All of the Petitioner's Contentions

In its rebuttal brief, Camesa argues that the petitioner did not raise its objections in a timely manner. Camesa notes that the petitioner did not submit comments on any of Camesa's questionnaire responses, and did not, until after publication of our preliminary results of review, indicate it had concerns with the bona fide nature of Camesa's sales to the United States or with the suitability of Camesa's home market data for review.

DOC Position: The Department disagrees with Camesa. Section 351.309(b) of the Department's regulations states that the Department will consider case and rebuttal briefs filedwithin stated time limits. An interested party is under no burden to provide another party with advance warning of the issues it plans to raise in its case brief. In fact, an interested party might very well have no idea what arguments it will need to make until the Department has issued its preliminary results of review. In this case, for example, the petitioner had no advance

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warning that the Department would reject Camesa's second submission of home market sales data (see the above discussion of Comment 2) until our preliminary results were issued.

Interested parties were given five days after the filing of case briefs in which to respond to the arguments of other parties, in accordance with Sec. 351.309(d) of the Department's regulations.

Finally, the petitioner's comments did not raise unusually complex issues. Camesa did not indicate to the Department, prior to its April 13th submission, that it was having difficulty responding to the petitioner's arguments within the allotted time period, nor has it explained how in particular it was overburdened or denied a reasonable opportunity for responding.

We determine that the following dumping margins exist:

Margin Manufacturer/exporter

Period (percent)

Aceros Camesa, S.A. de C.V................ 3/1/97-2/28/98 0.00

The Department shall determine, and the customs service shall assess, antidumping duties on all appropriate entries. We will instruct customs to liquidate the entries made during the POR without regard to antidumping duties since no margins were determined to exist in this review. The Department will issue appraisement instructions directly to the U.S. Customs Service.

Furthermore, the following deposit requirements will be effective, upon publication of this notice of final results of review, for all shipments of steel wire rope from Mexico entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(1) of the Act: (1) The cash deposit rate for Camesa will be the rate stated above; (2) for previously investigated 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, or the original 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) the cash deposit rate for all other manufacturers or exporters will continue to be 111.68 percent, the all others rate established in the less-than-fair-value (LTFV) investigation.

These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

This notice serves as a final 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.

This notice also serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with Sec. 351.306 of the Department's regulations. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This administrative review and notice are in accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)), section 771(i) of the Act (19 U.S.C. 1677f(i)), and 19 CFR 351.213.

Dated: July 6, 1999. Robert S. LaRussa, Assistant Secretary for Import Administration.

[FR Doc. 99-19166Filed7-26-99; 8:45 am]

BILLING CODE 3510-DS-P