Antidumping: Stainless steel sheet and strip in coils from Taiwan,
[Federal Register: August 6, 2003 (Volume 68, Number 151)]
[Notices]
[Page 46582-46590]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au03-56]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-831]
Stainless Steel Sheet and Strip in Coils From Taiwan: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration, Department of Commerce.
ACTION: Notice of preliminary results and partial rescission of antidumping duty administrative review of stainless steel sheet and strip in coils from Taiwan.
SUMMARY: The Department of Commerce (``the Department'') is conducting an administrative review of the antidumping duty order on stainless steel sheet and strip in coils (``SSSS'') from Taiwan in response to requests from respondents Yieh United Steel Corporation (``YUSCO'') and Chia Far Industrial Factory Co., Ltd. (``Chia Far''), and petitioners \1\ who requested a review of YUSCO, Tung Mung Development Co., Ltd. (``Tung Mung''), Ta Chen Stainless Pipe Company Ltd. (``Ta Chen''), and Chia Far and any of their affiliates in accordance with section 351.213 of the Department's regulations. This review covers imports of subject merchandise from YUSCO, Tung Mung, Ta Chen, and Chia Far. The period of review (``POR'') is July 1, 2001 through June 30, 2002.
\1\ Allegheny Ludlum, AK Steel Corporation (formerly Armco, Inc.) J&L Speciality Steel, Inc., North American Stainless, Butler- Armco Independent Union, Zanesville Armco Independent Union, and the United Steelworkers of America, AFL-CIO/CLC.
Our preliminary results of review indicate that Chia Far and YUSCO have sold subject merchandise at less than normal value (``NV'') during the POR. Additionally, Tung Mung did not participate in this review. Therefore, we are applying an adverse facts available (``AFA'') rate to all sales and entries of Tung Mung's subject merchandise during the POR. Lastly, we have preliminarily determined to rescind the review with respect to Ta Chen, because the evidence on the record indicates that it had no shipments of subject merchandise to the United States during the POR. If these preliminary results are adopted in our final results of this administrative review, we will instruct the U.S. Bureau of Customs and Border Protection (``Customs'') to assess antidumping duties on entries of YUSCO's, Chia Far's and Tung Mung's merchandise during the POR, in accordance with 751(a)(2)(C) of the Tariff Act of 1930 (``The Act''), and sections 351.106(c) and 351.212(b) of the Department's regulations.
We invite interested parties to comment on these preliminary results. We will issue the final results no later than 120 days from the date of publication of this notice.
EFFECTIVE DATE: August 6, 2003.
FOR FURTHER INFORMATION CONTACT: Laurel LaCivita (Ta Chen, Tung Mung); Lilit Astvatsatrian (Chia Far); Peter Mueller (YUSCO); or Bob Bolling, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th and Constitution Avenue, NW., Washington, DC 20230;
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telephone: (202) 482-4243, (202) 482-6412, (202) 482-5811 or (202) 482- 3434, respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 1, 2002, the Department published in the Federal Register a notice of ``Opportunity to Request Administrative Review'' of the antidumping duty order on stainless steel sheet and strip in coils from Taiwan. See Notice of Opportunity to Request Administrative Review of Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation, 67 FR 44172 (July 1, 2002). On July 30, 2002, YUSCO and Chia Far, producers and exporters of subject merchandise during the POR, in accordance with section 351.213(b) of the Department's regulations, requested an administrative review of the antidumping order covering the period July 1, 2001 through June 30, 2002. On July 31, 2002, petitioners also requested a review of YUSCO, Tung Mung, Ta Chen, and Chia Far and its affiliates. On August 27, 2002, the Department 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 Requests for Revocation in Part, 67 FR 55000 (August 27, 2002).
On September 4, 2002, the Department issued questionnaires to YUSCO, Tung Mung, Chia Far and Ta Chen. On September 26, 2002, Ta Chen certified to the Department that it had no sales, entries or shipments of subject merchandise to the United States during the POR, and requested an exemption from answering the questionnaire. Tung Mung did not respond to the Department's questionnaire.
On October 9 and October 23, 2002, YUSCO submitted its Sections A through D questionnaire responses. On December 10, 2002 and January 24, 2003, we issued supplemental Sections A through D questionnaires to YUSCO. On January 9 and February 14, 2003, YUSCO submitted its supplemental Sections A through D questionnaire responses. On February 21 and March 19, 2003, we issued second supplemental Sections A through D questionnaires to YUSCO and on March 19 and April 7, 2003, YUSCO submitted its second supplemental Sections A through D questionnaire responses. On April 7, 2003, we issued a supplemental questionnaire to YUSCO concerning affiliation and on April 16, 2003, YUSCO responded. On May 2, 2003, we issued a third supplemental Sections A through C questionnaire to YUSCO, and on June 11, 2003, we issued a second supplemental questionnaire to YUSCO concerning affiliation. On May 16 and June 20, 2003, YUSCO submitted its third supplemental Sections A through C questionnaire responses, and answered the second supplemental questionnaire concerning affiliation. On July 3, 2003 we issued a third supplemental questionnaire to YUSCO concerning affiliation, and on July 10, 2003, YUSCO submitted its response. Finally, on July 18, 2003, we issued a fourth supplemental questionnaire to YUSCO concerning affiliation and YUSCO submitted its response on July 28, 2003.
On October 9 and October 18, 2002, Chia Far submitted its Sections A through D questionnaire responses. We issued supplemental Sections A through D questionnaires to Chia Far on February 13 and February 26, 2003. On March 3 and March 12, 2003, Chia Far submitted its supplemental Sections A through D questionnaire responses. On March 20, 2003, we issued a second supplemental Sections A through C questionnaire to Chia Far and Chia Far responded on March 28, 2003. On April 10, 2003, we issued a third supplemental Sections A through D questionnaire to Chia Far and Chia Far submitted its response on April 24, 2003. We issued a fourth supplemental Sections B and D questionnaire to Chia Far on May 2, 2003 and Chia Far responded on May 13, 2003. On June 30, 2003, we issued a fifth supplemental Sections B through D questionnaire to Chia Far and Chia Far responded on July 10, 2003. On July 14, 2003, we issued a sixth supplemental Section B questionnaire to Chia Far and Chia Far submitted its response on July 21, 2003.
Pursuant to section 751(a)(3)(A) of the Act, the Department may extend the deadline for completion of an administrative review if it determines that it is not practicable to complete the review within the statutory time limit. The Department has extended the time limit for the preliminary results in this review on two separate occasions. See Stainless Steel Sheet and Strip in Coils from Taiwan: Extension of Time Limits for Preliminary Results of Antidumping Duty Administrative Review, 68 FR 14195 (March 24, 2003); and Stainless Steel Sheet and Strip in Coils from Taiwan: Extension of Time Limits for Preliminary Results of Antidumping Duty Administrative Review, 68 FR 27782 (May 21, 2003). The current deadline for the preliminary results in this review is July 31, 2003.
The Department is conducting this administrative review in accordance with section 751 of the Act.
Scope of the Review
For purposes of this review, the products covered are certain stainless steel sheet and strip in coils. Stainless steel is an alloy steel containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. The subject sheet and strip is a flat-rolled product in coils that is greater than 9.5 mm in width and less than 4.75 mm in thickness, and that is annealed or otherwise heat treated and pickled or otherwise descaled. The subject sheet and strip may also be further processed (e.g., cold-rolled, polished, aluminized, coated, etc.) provided that it maintains the specific dimensions of sheet and strip following such processing.
The merchandise subject to this order is classified in the Harmonized Tariff Schedule of the United States (HTS) at subheadings: 7219.13.00.31, 7219.13.00.51, 7219.13.00.71, 7219.13.00.81 , 7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 7219.32.00.05, 7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 7219.32.00.36, 7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 7219.33.00.05, 7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 7219.33.00.36, 7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 7219.34.00.05, 7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 7219.34.00.35, 7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 7219.35.00.35, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 7220.20.70.60, 7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 7220.20.90.60, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTS subheadings are provided for convenience and Customs purposes, the Department's written description of the merchandise covered by this order is dispositive.
Excluded from the scope of this order are the following: (1) Sheet and strip that is not annealed or otherwise heat treated and pickled or otherwise descaled, (2) sheet and strip that is cut to length, (3) plate (i.e., flat-rolled stainless steel products of a thickness of 4.75 mm or more), (4) flat wire (i.e., cold-rolled sections, with a prepared edge, rectangular in shape, of a width of
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not more than 9.5 mm), and (5) razor blade steel. Razor blade steel is a flat-rolled product of stainless steel, not further worked than cold- rolled (cold-reduced), in coils, of a width of not more than 23 mm and a thickness of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent chromium, and certified at the time of entry to be used in the manufacture of razor blades. See Chapter 72 of the HTS, ``Additional U.S. Note'' 1(d).
In response to comments by interested parties, the Department also determined that certain specialty stainless steel products were excluded from the scope of the investigation and the subsequent order. These excluded products are described below.
Flapper valve steel is defined as stainless steel strip in coils containing, by weight, between 0.37 and 0.43 percent carbon, between 1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent manganese. This steel also contains, by weight, phosphorus of 0.025 percent or less, silicon of between 0.20 and 0.50 percent, and sulfur of 0.020 percent or less. The product is manufactured by means of vacuum arc remelting, with inclusion controls for sulphide of no more than 0.04 percent and for oxide of no more than 0.05 percent. Flapper valve steel has a tensile strength of between 210 and 300 ksi, yield strength of between 170 and 270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between 460 and 590. Flapper valve steel is most commonly used to produce specialty flapper valves in compressors.
Also excluded is a product referred to as suspension foil, a specialty steel product used in the manufacture of suspension assemblies for computer disk drives. Suspension foil is described as 302/304 grade or 202 grade stainless steel of a thickness between 14 and 127 microns, with a thickness tolerance of plus-or-minus 2.01 microns, and surface glossiness of 200 to 700 percent Gs. Suspension foil must be supplied in coil widths of not more than 407 mm, and with a mass of 225 kg or less. Roll marks may only be visible on one side, with no scratches of measurable depth. The material must exhibit residual stresses of 2 mm maximum deflection and flatness of 1.6 mm over 685 mm length.
Certain stainless steel foil for automotive catalytic converters is also excluded from the scope of the order. This stainless steel strip in coils is a specialty foil with a thickness of between 20 and 110 microns used to produce a metallic substrate with a honeycomb structure for use in automotive catalytic converters. The steel contains, by weight, carbon of no more than 0.030 percent, silicon of no more than 1.0 percent, manganese of no more than 1.0 percent, chromium of between 19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of no more than 0.045 percent, sulfur of no more than 0.03 percent, lanthanum of less than 0.002 or greater than 0.05 percent, and total rare earth elements of more than 0.06 percent, with the balance iron.
Permanent magnet iron-chromium-cobalt alloy stainless strip is also excluded from the scope of this order. This ductile stainless steel strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 percent cobalt, with the remainder of iron, in widths 228.6 mm or less, and a thickness between 0.127 and 1.270 mm. It exhibits magnetic remanence between 9,000 and 12,000 gauss, and a coercivity of between 50 and 300 oersteds. This product is most commonly used in electronic sensors and is currently available under proprietary trade names such as ``Arnokrome III.'' \2\
\2\ ``Arnokrome III'' is a trademark of the Arnold Engineering Company.
Certain electrical resistance alloy steel is also excluded from the scope of this order. This product is defined as a non-magnetic stainless steel manufactured to American Society of Testing and Materials (``ASTM'') specification B344 and containing, by weight, 36 percent nickel, 18 percent chromium, and 46 percent iron, and is most notable for its resistance to high temperature corrosion. It has a melting point of 1390 degrees Celsius and displays a creep rupture limit of 4 kilograms per square millimeter at 1000 degrees Celsius. This steel is most commonly used in the production of heating ribbons for circuit breakers and industrial furnaces, and in rheostats for railway locomotives. The product is currently available under proprietary trade names such as ``Gilphy 36.'' \3\
\3\ ``Gilphy 36'' is a trademark of Imphy, S.A.
Certain martensitic precipitation-hardenable stainless steel is also excluded from the scope of this order. This high-strength, ductile stainless steel product is designated under the Unified Numbering System (``UNS'') as S45500-grade steel, and contains, by weight, 11 to 13 percent chromium, and 7 to 10 percent nickel. Carbon, manganese, silicon and molybdenum each comprise, by weight, 0.05 percent or less, with phosphorus and sulfur each comprising, by weight, 0.03 percent or less. This steel has copper, niobium, and titanium added to achieve aging, and will exhibit yield strengths as high as 1700 Mpa and ultimate tensile strengths as high as 1750 Mpa after aging, with elongation percentages of 3 percent or less in 50 mm. It is generally provided in thicknesses between 0.635 and 0.787 mm, and in widths of 25.4 mm. This product is most commonly used in the manufacture of television tubes and is currently available under proprietary trade names such as ``Durphynox 17.'' \4\
\4\ ``Durphynox 17'' is a trademark of Imphy, S.A.
Finally, three specialty stainless steels typically used in certain industrial blades and surgical and medical instruments are also excluded from the scope of the order. These include stainless steel strip in coils used in the production of textile cutting tools (e.g., carpet knives).\5\ This steel is similar to AISI grade 420, but containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 0.020 percent or less, and includes between 0.20 and 0.30 percent copper and between 0.20 and 0.50 percent cobalt. This steel is sold under proprietary names such as ``GIN4 Mo.'' The second excluded stainless steel strip in coils is similar to AISI 420-J2 and contains, by weight, carbon of between 0.62 and 0.70 percent, silicon of between 0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, phosphorus of no more than 0.025 percent and sulfur of no more than 0.020 percent. This steel has a carbide density on average of 100 carbide particles per 100 square microns. An example of this product is ``GIN5'' steel. The third specialty steel has a chemical composition similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, molybdenum of between 1.15 and 1.35 percent, but lower manganese of between 0.20 and 0.80 percent, phosphorus of no more than 0.025 percent, silicon of between 0.20 and 0.50 percent, and sulfur of no more than 0.020 percent. This product is supplied with a hardness of more than Hv 500 guaranteed after customer processing, and is supplied as, for example, ``GIN6''.\6\
\5\ This list of uses is illustrative and provided for descriptive purposes only.
\6\ ``GIN4 Mo,'' ``GIN5'' and ``GIN6'' are the proprietary grades of Hitachi Metals America, Ltd.
Partial Rescission of Review
As noted above, Ta Chen certified to the Department that it had no shipments of subject merchandise to the United States during the POR. The Department subsequently contacted Customs and requested them to conduct an inquiry into Ta Chen's exports to the United States during the POR. The Department
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also reviewed Customs' data available to it. See Memorandum from Laurel LaCivita to the File, No Shipment Inquiry for Ta Chen Stainless Steel Pipe Co., Ltd. (``Ta Chen''), dated July 16, 2003. There is no evidence on the record which indicates that Ta Chen made exports of subject merchandise during the POR. Therefore, in accordance with section 351.213(d)(3) of the Department's regulations and consistent with the Department's practice, we are preliminarily rescinding our review with respect to Ta Chen. See e.g., Certain Welded Carbon Steel Pipe and Tube from Turkey; Final Results and Partial Rescission of Antidumping Administrative Review, 63 FR 35190, 35191 (June 29, 1998); and Certain Fresh Cut Flowers from Colombia; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 62 FR 53287, 53288 (October 14, 1997).
Facts Available
Section 776(a)(2) of the Act provides that if an interested party withholds information that has been requested by the Department, fails to provide such information in a timely manner or in the form requested, significantly impedes a proceeding under the antidumping statute, or provides information that cannot be verified, the Department shall use facts available in reaching the applicable determination. In selecting from among the facts otherwise available, section 776(b) of the Act authorizes the Department to use an adverse inference if the Department finds that a party has failed to cooperate by not acting to the best of its ability to comply with requests for information. See also the Statement of Administrative Action to the URAA, H. Doc. 103-316 (1994) at 870 (``SAA'') (further discussing the application of adverse facts available).
For the preliminary results of review, in accordance with section 776(a)(2) of the Act, we have determined that the use of facts available is appropriate for Tung Mung, since it did not respond to the Department's questionnaire. Pursuant to section 782(d) of the Act, after the Department did not receive a response to its questionnaire, we confirmed that Tung Mung did not intend to participate in this review, and that it understood the potential results if it chose not to cooperate further in the administration of the review. See Memorandum from Laurel LaCivita to the File, Third Administrative Review: Stainless Steel Sheet and Strip from Taiwan, dated July 16, 2003. Because Tung Mung failed to provide any information on the record for this administrative review, we have no alternative but to apply total facts available to Tung Mung.
As noted above, in selecting facts otherwise available, pursuant to section 776(b) of the Act, the Department may use an adverse inference if the Department finds that an interested party, such as Tung Mung, failed to cooperate by not acting to the best of its ability to comply with requests for information. Consistent with Department's practice in cases where a respondent fails to participate in an administrative review, as adverse facts available, we have applied a margin based on the highest appropriate margin from this or any prior segment of the proceeding. See Elemental Sulphur From Canada: Final Results of Antidumping Duty Administrative Review, 65 FR 11980, 11981 (March 7, 2000).
The Department notes that while the highest margin calculated during this or any prior segment of the proceeding is 34.95 percent, this margin represents a combined rate applied in a channel transaction in the investigation of this proceeding based on middleman dumping by Ta Chen. See Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip from Taiwan, 64 FR 30592, 30623 (June 8, 1999) (``SSSS Investigation''). Where circumstances indicate that a particular margin is not appropriate as adverse facts available, the Department will disregard the margin and determine another, more appropriate one as facts available. See Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (where the Department disregarded the highest margin for use as adverse facts available because the margin was based on another company's uncharacteristic business expense, resulting in an unusually high margin). Because the middleman dumping calculated margin would be inappropriate, given that the record does not indicate that any of Tung Mung's exports to the United States during the POR involved a middleman, the Department has applied the highest margin from any segment of the proceeding for a producer's direct exports to the United States, without middleman dumping, which is 21.10 percent.
The rate of 21.10 percent was applied in the first administrative review to another respondent and constitutes secondary information. Section 776(c) of the Act requires the Department, to the extent practicable, to corroborate secondary information from independent sources that are reasonably at its disposal. The SAA clarifies that ``corroborate'' means that the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870. As noted in Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used. However, there are no independent sources in this case from which the Department can derive calculated dumping margins. Therefore, unlike other types of information such as input costs or selling expenses, the only source of dumping margins is the calculated dumping margins from previous administrative determinations.
The Department corroborated the information used to establish the 21.10 percent rate in the first administrative review, finding the information to be both reliable and relevant. See Stainless Steel Sheet and Strip in Coils From Taiwan; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 67 FR 6682, 6684 (February 13, 2002) and accompanying Issues and Decision Memorandum at Comment 28. Nothing on the record of this instant administrative review calls into question the reliability of this rate. Furthermore, with respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal as to whether there are circumstances that would render a margin not relevant. As discussed above, in selecting this margin, the Department considered whether middleman dumping was relevant to Tung Mung and declined to use margins based on middleman dumping. The Department has determined that there is no evidence on the record of this case which would render the application of this selected margin inappropriate. Thus, we find that the rate of 21.10 percent from the first administrative review is sufficiently corroborated for purposes of this administrative review.
Affiliation
Petitioners argue that the Department should determine that YUSCO was affiliated with China Steel Corporation (``CSC'') during the POR. CSC is not a respondent in this administrative review, but CSC does produce black coil
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which, although not subject merchandise, is used in the production of subject merchandise. Petitioners allege that affiliation existed through direct and indirect stock ownership; through control by members of the boards of directors at YUSCO, Yieh Loong Enterprise Co. Ltd. (``YL''), and CSC; and by cross-ownership through various investment companies affiliated with I.S. Lin, YUSCO, YL, and CSC. Furthermore, CSC which produces hot-rolled steel, was found to be affiliated with, and collapsed with, YL, another producer of hot-rolled steel, in Final Determination of Sales at Less Than Fair Value; Certain Hot-Rolled Carbon Steel Flat Products from Taiwan 66 FR 49618 (September 28, 2001) and accompanying Issues and Decision Memorandum at Comments 1 and 2. Petitioners do not argue for collapsing in this case, but do argue that the Department find affiliation between YUSCO and CSC. Petitioners argue that because YUSCO has not responded fully to the Department's questionnaire pertaining to affiliation, it has failed to cooperate to the best of its ability. Petitioners therefore argue that the Department should assign total adverse facts available to YUSCO.
At the Department's request, YUSCO submitted information regarding CSC's, and YL's corporate structure, ownership, and relationships with YUSCO. The information on the record indicates the following: (1) Prior to the POR, CSC acquired 40 percent of the outstanding stock of YUSCO's affiliate, YL; (2) CSC maintained operational and managerial control over YL during the entire POR; \7\ (3) as a result of CSC's acquisition of YL's stock, CSC gained an indirect, long-term investment in YUSCO, through YL's ownership of 2 percent of YUSCO's outstanding shares; \8\ (4) Lien Shuo Investment Co., Ltd. (``Lien Shuo''), an investment company owned and controlled by YUSCO's chairman, Mr. I.S. Lin, was the chairman of the board at YL for the entire POR; and, (5) YUSCO made sales of subject merchandise to an affiliate who then sold the subject merchandise to CSC.\9\
\7\ See YUSCO's April 16, 2003 Supplemental Questionnaire Response at Page 6 and YUSCO's May 16, 2003 Supplemental Questionnaire Response at Page 8.
\8\ See YUSCO's July 10, 2003 Supplemental Questionnaire Response at Pages 1-2.
\9\ See YUSCO's Section October 23, 2002 Section B-D Response at Exhibit 5 and at Exhibit 7.
Although there is circumstantial information on the record relating to relationships between YUSCO, YL, and CSC, that evidence does not lead us to definitively conclude that the requisite ``control'' exists (or does not exist) for a determination of the existence/nonexistence of affiliation of YUSCO and CSC on the record, pursuant to section 771(33) of the Act. However, even if the Department were to find that all of these parties were affiliated, it would have no impact on our dumping analysis. A finding of affiliation in this case would only affect our calculation of normal value. However, section 351.403(d) of the Department's regulations states that the Department will ``not normally calculate normal value based on the sale by an affiliated party if sales of the foreign like product by an exporter or producer to affiliated parties account for less than five percent of the total value (or quantity)'' of sales in the home market. The quantity of sales between YUSCO and CSC was less than five percent of the total quantity of sales in the home market. Therefore, pursuant to section 351.403(d) of the Department's regulations, even if the Department were to determine that YUSCO and CSC were affiliated, based upon the facts of the record of this case, it would not calculate normal value based on CSC's downstream sales of YUSCO's merchandise sold in the home market. Additionally, the Department would not use the sales from YUSCO's affiliate to CSC to calculate normal value because they would not be matched to any of YUSCO's U.S. sales during this review period. Thus, any affiliation between YUSCO and CSC, if any, would not effect the outcome of the review and we need not further address it.
Finally, the Department finds that YUSCO has, to date, responded to all of the Department's requests for information pertaining to this matter. Therefore, the application of facts available is not warranted.
Normal Value Comparisons
To determine whether respondent's sales of subject merchandise from Taiwan to the United States were made at less than normal value, we compared the export price (``EP'') and CEP, as appropriate, to the NV, as described in the ``Export Price and Constructed Export Price'' and ``Normal Value'' sections of this notice, below. In accordance with section 777A of the Act, we calculated monthly weighted-average prices for NV and compared these to individual EP and CEP transactions.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all products covered by the description in the ``Scope of the Review'' section of this notice, supra, and sold by YUSCO and Chia Far in the home market during the POR to be foreign like product for the purpose of determining appropriate product comparisons to SSSS products sold in the United States. We have relied on nine product characteristics to match U.S. sales of subject merchandise to comparison sales of the foreign like product: Grade, hot or cold-rolled, gauge, surface finish, metallic coating, non-metallic coating, width, temper, and edge. Where there were no sales of identical merchandise in the home market to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product on the basis of the characteristics and reporting instructions listed in the September 4, 2002 antidumping duty questionnaire and instructions, or to constructed value (``CV''), as appropriate.
Export Price and Constructed Export Price
In accordance with section 772(a) of the Act, EP is 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 in the United States or to an unaffiliated purchaser for exportation to the United States. In accordance with section 772(b) of the Act, CEP is 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 of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter.
YUSCO
For purposes of this administrative review, YUSCO classified its U.S. sales as EP sales, stating that it sold its SSSS to unaffiliated customers in the United States during the POR. Therefore, we are using EP as defined in section 772(a) of the Act because the merchandise was sold, prior to importation, outside the United States by YUSCO to an unaffiliated purchaser in the United States. We based EP on packed prices to unaffiliated purchasers in the United States. We made deductions for inland freight (from YUSCO's plant to the port of export), international freight, and marine insurance in accordance with section 772(c) of the Act. We made no changes or corrections to the U.S. sales information reported by YUSCO in the calculation of YUSCO's dumping margin.
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Chia Far
For purposes of this review, Chia Far has classified all of its sales as CEP sales. We are using CEP as defined in section 772(a) of the Act for sales of subject merchandise that were sold, after importation, by Lucky Medsup, Chia Far's affiliated reseller, to an unaffiliated purchaser in the United States. We based CEP on the packed prices to the first unaffiliated purchaser in the United States. We made deductions for movement expenses including: Foreign inland freight from the plant to the port of exportation, international freight, marine and inland insurance, brokerage and handling, container handling charges, harbor construction fees, other U.S. transportation expenses and U.S. duty. Additionally, we added to the U.S. price an amount for duty drawback pursuant to section 772(c)(1)(B) of the Act. In accordance with section 772(d)(1) of the Act, we deducted selling expenses associated with economic activities occurring in the United States, including direct selling expenses and indirect selling expenses.
We deducted the profit allocated to expenses deducted under sections 772(d)(1) and (d)(2) in accordance with sections 772(d)(3) and 772(f) of the Act. In accordance with section 772(f) of the Act, we computed profit based on total revenues realized on sales in both the U.S. and home markets, less all expenses associated with those sales. We then allocated profit to 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 market.
Normal Value
After testing home market viability and whether home market sales were at below-cost prices, we calculated NV as noted in the ``Price-to- Price Comparisons'' and ``Price-to-Constructed Value'' (``CV'') Comparisons'' sections of this notice.
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Home Market Viability
In accordance with section 773(a)(1)(B) of the Act, to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating normal value (``NV'') (i.e., the aggregate volume of home market sales of the foreign like product is greater than or equal to five percent of the aggregate volume of U.S. sales), we compared YUSCO's and Chia Far's volume of home market sales of the foreign like product to the volume of each of their U.S. sales of subject merchandise, we determined that sales in the home market provide a viable basis for calculating NV. We therefore based NV on home market sales to unaffiliated purchasers made in the usual commercial quantities and the oridinary course of trade.
For NV, we used the prices at which the foreign like product was first sold for consumption in Taiwan, in the usual commercial quantities, in the ordinary course of trade, and, to the extent possible, at the same level of trade (``LOT'') as the EP or CEP as appropriate. After testing home market viability and whether home market sales were at below-cost prices, we calculated NV as noted in the ``Price-to-Price Comparisons'' and ``Price-to-Constructed Value ( ``CV'') Price Comparisons'' sections of this notice.
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Arm's-Length Test
YUSCO reported that it made sales in the home market to affiliated and unaffiliated end users and distributors/retailers. Sales to affiliated customers in the home market not made at arm's length were excluded from our analysis. To test whether these sales were made at arm's length, we compared the starting prices of sales to affiliated and unaffiliated customers net of all movement charges, indirect selling expenses, and packing. Where prices to the affiliated party were on average 99.5 percent or more of the price to the unaffiliated party, we determined that sales made to the affiliated party were at arm's length. See 19 CFR 351.403(c); Antidumping Duties, Countervailing Duties; Final Rule, 62 FR 27295, 27355 (May 19, 1997).\10\ Where no affiliated customer ratio could be calculated because identifical merchandise was not sold to unaffiliated customers, we were unable to determine that these sales were made at arm's length and, therefore, excluded them from our analysis. See e.g., Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, 58 FR 37062, 37077 (July 9, 1993). Where the exclusion of such sales eliminated all sales of the most appropriate comparison product, we made comparisons to the next most similar model. Certain of YUSCO's affiliated home market customers did not pass the arm's length test. Therefore, we have considered the downstream sales from these customers to the first unaffiliated customer.
\10\ Because this review was initiated before November 23, 2002, the 99.5 percent test applies to this review. See Antidumping Procedures: Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186, 69197 (November 15, 2002).
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Cost of Production (``COP'') Analysis
Because the Department determined that YUSCO and Chia Far made sales in the home market at prices below the cost of producing the subject merchandise in the previous administrative review and therefore excluded such sales from NV, the Department determined that there are reasonable grounds to believe or suspect that YUSCO and Chia Far made sales in the home market at prices below the cost of producing the merchandise in this administrative review. See section 773(b)(2)(A)(ii) of the Act. As a result, the Department initiatived a cost of production inquiry for both YUSCO and Chia Far. A. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated a weighted-average COP based on the sum of YUSCO's and Chia Far's cost of materials and fabrication for the foreign like product, plus amounts for home market selling, general and administrative expenses (``SG&A''), including interest expenses, and packing costs. We relied on the COP data submitted by YUSCO in its original and supplemental cost questionnaire responses. For the purpose of these preliminary results of YUSCO, we made no changes to the COP information provided to conduct the cost test.
However, for the purpose of these preliminary results, we revised the COP information submitted by China Far as follows: We revised the total cost of manufacturing to reflect the variable and fixed costs of further processing after sale. See Analysis Memorandum for the Preliminary Results of Review for Stainless Steel Strip in Coils From Taiwan-Chia Far Industrial Factory Co., Ltd. (July 31, 2003) (``Chia Far Preliminary Analysis Memo''). B. Test of Home Market Prices
On a product-specific basis, we compared the weighted-average COP for YUSCO and Chia Far, adjusted where appropriate, to their home market sales of the foreign like product as required under section 773(b) of the Act, in order to determine whether these sales had been made at prices below the COP. In determining whether to disregard home market sales made at prices less than the COP, we examined whether such sales were made: (1) In substantial quantities within an extended period of time; and (2) such sales were made at prices which permitted the recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(A) and (B) of the Act. We compared the
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COP to home market prices, less any applicable movement charges, discounts, and direct and indirect selling expenses. C. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of a respondent's sales of a given product within an extended period of time are 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.'' Where 20 percent or more of a respondent's sales of a given product during the extended period were at prices less than the COP, we determined such sales to have been made in ``substantial quantities'' pursuant to section 773(b)(2)(C)(i) within an extended period of time, in accordance with section 773(b)(2)(B) of the Act. In such cases, because we used POR average costs, we also determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act.
We compared the COP for subject merchandise to the reported home market prices less any applicable movement charges. Based on this test, we disregarded below-cost sales. Where all sales of a specific product were at prices below the COP, we disregarded all sales of that product.
Price-to-Price Comparisons
YUSCO
For those product comparisons for which there were sales at prices above the COP, we based NV on the home market prices to unaffiliated purchasers and those affiliated customer sales which passed the arm's length test. We made adjustments, where appropriate, for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act.We calculated NV based on the home market prices to unaffiliated home market customers. Where appropriate, we deducted rebates, warranty expenses, and movement expenses (e.g., inland freight from plant to customer) in accordance with section 773(a)(6)(B) of the Act.
We made adjustments, where appropriate, for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. Additionally, in accordance with section 773(a)(6)(A) and (B), we deducted home market packing costs and credit expenses and added U.S. packing costs, credit expenses, and direct selling expenses (e.g., container handling fee, certification fee, fumigation fee, and document handling fee). In accordance with the Department's practice, where all contemporaneous matches to a U.S. sale observation resulted in difference-in-merchandise adjustments exceeding 20 percent of the cost of manufacturing (``COM'') of the U.S. product, we based NV on CV.
Chia Far
For those product comparisons for which there were sales at prices above the COP, we based NV on the prices to unaffiliated purchasers in the home market. Where appropriate, we deducted movement expenses and direct selling expenses, and added U.S. direct selling expenses (credit) in accordance with section 773(a)(6)(B) of the Act. In addition, we made adjustments to Chia Far's reported gross unit price to include post-sale processing charges. See Chia Far Preliminary Analysis Memo (July 31, 2003).
We made adjustments, where appropriate, for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. Additionally, in accordance with section 773(a)(6)(A) and (B), we deducted home market packing costs and added U.S. packing costs. In accordance with the Department's practice, where all contemporaneous matches to a U.S. sales observation resulted in difference-in- merchandise adjustments exceeding 20 percent of the COM of the U.S. product, we based NV on CV.
Price-to-CV Comparisons
In accordance with section 773(a)(4) of the Act, we based NV on CV if we were unable to find a home market match of identical or similar merchandise. We calculated CV based on YUSCO's and Chia Far's cost of materials, fabrication employed in producing the subject merchandise, and SG&A, including interest expenses and profit. We calculated the COPs included in the calculation of CV as noted above in the ``Calculation of COP'' section of this notice. In accordance with section 773(e)(2)(A) of the Act, we based SG&A expense 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 Taiwan. For selling expenses, we used the actual weighted-average home market direct and indirect selling expenses. For CV, we made the same adjustments described in the COP section above.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade (``LOT'') as the EP or 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 the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison-market sales at the LOT of the export transaction, we make an LOT adjustment under section 773(a)(7)(A) of the 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 Act (the CEP offset provision). See Notice of Final Determination of Sales at Less Than Fair Value: Certain Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).
In implementing these principles in this review, we obtained information from YUSCO and Chia Far about the marketing stages involved in its reported U.S. and home market sales, including a description of the selling activities performed by YUSCO and Chia Far for each channel of distribution. 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 Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). Generally, if the reported levels of trade are the same in the home and U.S. markets, the functions and activities of the seller should be similar. Conversely, if a party reports levels of trade that are different for different categories of sales, the functions and activities should be dissimilar.
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In the present review, neither YUSCO nor Chia Far requested a LOT adjustment. To determine whether an adjustment was necessary, in accordance with the principles discussed above, we examined information regarding the distribution systems in both the United States and home markets, including the selling functions, classes of customer, and selling expenses.
YUSCO
In the home market (``HM''), YUSCO reported one level of trade. See October 23, 2002 Questionnaire Response from YUSCO, at B-27. YUSCO sold through one channel of distribution in the HM. For these HM customers, YUSCO provided the following selling functions: inland freight, warranty services, and technical advice. Because there is only one sales channel involving similar functions for all sales, we preliminarily determine that there is one LOT in the home market.
For the U.S. market, YUSCO reported one level of trade. See October 9, 2002 Questionnaire Response from YUSCO, at A-11. YUSCO sold through one channel of distribution in the U.S. market: to unaffiliated local customers. For U.S. sales, YUSCO provided the following selling functions: Arranging freight and delivery; invoicing; and packing. YUSCO did not incur any expenses in the United States for its U.S. sales. Because there is only one sales channel in the United States, we preliminarily determine that there is one LOT in the United States.
Based on our analysis of the selling functions performed for sales in the HM and U.S. market, we preliminarily determine that the sales in the HM and U.S. market were made at the same LOT. Despite the existence of certain additional selling functions (i.e., general consultation of technical advice and warranty services) performed by YUSCO for its HM sales, no significant difference exists in the selling functions performed in the HM and U.S. market. Therefore, a LOT adjustment is not warranted.
Chia Far
For its home market sales, Chia Far reported one channel of distribution, direct sales from inventory, and two customer categories, unaffiliated end users and unaffiliated distributors. See Section A Questionnaire Response from Chia Far at Exhibit A-5, dated October 9, 2002 (``AQR''). For HM sales to both distributors and end-users, Chia Far performed many of the same major selling functions, including after-sale inventory maintenance, technical advice, warranty services, freight and delivery arrangement, after-sale processing and packing. See Supplemental Questionnaire Response from Chia Far at Exhibit A-24, dated March 3, 2003 (``SQR''). Therefore, based on Chia Far's selling functions performed for each type of customer, we preliminarily determine that there is one LOT in the home market.
For its U.S. sales, Chia Far reported one channel of distribution: CEP sales made to order; and one customer category: Chia Far sold through Lucky Medsup, an affiliated U.S. company, which then sold to unaffiliated distributors in the United States. See AQR at page 2. We examined the claimed selling functions performed by Chia Far for all of its U.S. sales. Chia Far provided the same level of the following services for its sales made to Lucky Medsup (CEP sales) in the United States as its home market sales: After-sale inventory maintenance, technical advice, warranty services, freight and delivery arrangement, after-sale processing and packing. See SQR at Exhibit A-24.
In order to determine whether NV was established at a different LOT than CEP sales, we examined stages in the marketing process and selling functions along the chains of distribution between Chia Far and its home market customers. We compared the selling functions performed for home market sales with those performed with respect to the CEP transaction, after deductions for economic activities occurring in the United States, pursuant to section 772(d) of the Act, to determine if the home market level of trade constituted a different level of trade than the CEP level of trade. Chia Far did not request a CEP offset. Nonetheless, in accordance with the principles discussed above, we examined information regarding the distribution systems in both the United States and Taiwan markets, including the selling functions, classes of customer, and selling expenses to determine whether a CEP offset was necessary. For CEP sales, Chia Far provided many of the same selling functions and expenses for its sale to its affiliated U.S. reseller Lucky Medsup as it provided for its home market sales, including after-sale inventory maintenance, technical advice, warranty services, freight and delivery arrangement, after-sale processing and packing. Based on our analysis of the channels of distribution and selling functions performed for sales in the home market and CEP sales in the U.S. market, we preliminarily find that there is not a significant difference in the selling functions performed in the home market and the U.S. market for CEP sales. Thus, we find that Chia Far's NV and CEP sales were made at the same LOT, and no LOT adjustment or CEP offset need be granted.
Currency Conversion
We made currency conversions into U.S. dollars based on the exchange rates in effect on the dates of the U.S. sales, as certified by the Federal Reserve Bank, in accordance with Section 773A(a) of the Act.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the following weighted-average dumping margins exist for the period July 1, 2001 through June 30, 2002:
Stainless Steel Sheet and Strip in Coils From Taiwan
Margin Manufacturer/exporter/reseller
(percent)
YUSCO......................................................
1.95 Chia Far...................................................
0.64 Tung Mung..................................................
21.10
The Department will disclose calculations performed within five days of the date of publication of this notice to the parties to this proceeding in accordance with section 351.224(b) of the Department's regulations. An interested party may request a hearing within 30 days of publication of these preliminary results. See section 351.310(c) of the Department's regulations. Any hearing, if requested, will be held 37 days after the date of publication, or the first working day thereafter. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. See section 351.309(c)(ii) of the Department's regulations. Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than 35 days after the date of publication. See section 351.309(d) of the Department's regulations. Further, we would appreciate it if parties submitting written comments also provide the Department with an additional copy of those comments on diskette. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days of publication of these preliminary results, pursuant to 751(a)(3)(A) of the Act.
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Assessment
Upon completion of this administrative review, the Department will determine, and Customs shall assess, antidumping duties on all appropriate entries. In accordance with section 351.212(b)(1) of the Department's regulations, we will calculate exporter/importer specific assessment rates for merchandise subject to this review. The Department will issue appropriate assessment instructions directly to Customs within 15 days of publication of the final results of review. If these preliminary results are adopted in the final results of review, we will direct Customs to assess the resulting assessment rates against the entered customs values for the subject merchandise on each of the importers' entries during the review period.
Cash Deposit
The following cash deposit requirements will be effective upon publication of these final results for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of these final results of administrative review, as provided by section 751(a)(1) of the Act: (1) The cash deposit rate for each of the reviewed companies will be the rate listed in the final results of review (except that if the rate for a particular product is de minimis, i.e., less than 0.5 percent, no cash deposit will be required for that company); (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, a prior review, or the original 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) the cash deposit rate for all other manufacturers or exporters will continue to be the ``all others'' rate of 21.10 percent, which is the ``all others'' rate established in the LTFV investigation. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
Notification to Interested Parties
This notice also serves as a preliminary reminder to importers of their responsibility under section CFR 351.402(f)(2) of the Department's regulations 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 the antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (APOs) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with section 351.305 of the Department's regulations, that continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the 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 determination is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: July 31, 2003. Joseph A. Spetrini, Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-20049 Filed 8-5-03; 8:45 am]
