[Federal Register: July 17, 2003 (Volume 68, Number 137)]
[Notices]
[Page 42378-42386]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jy03-41]
[[Page 42378]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-831]
Notice of Preliminary Determination of Sales at Less Than Fair
Value, Postponement of Final Determination, and Affirmative Preliminary
Determination of Critical Circumstances in Part: Prestressed Concrete
Steel Wire Strand From Mexico
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary determination of sales at less than fair
value, postponement of final determination, and affirmative preliminary
determination of critical circumstances in part.
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EFFECTIVE DATE: July 17, 2003.
FOR FURTHER INFORMATION CONTACT: James Kemp or Daniel O'Brien at (202)
482-5346 or (202) 482-1376, respectively; AD/CVD Enforcement Group II
Office 5, Import Administration, Room 1870, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Preliminary Determination
We preliminarily determine that prestressed concrete steel wire
strand (PC strand) from Mexico is being sold, or is likely to be sold,
in the United States at less than fair value (LTFV), as provided in
section 733 of the Tariff Act of 1930, as amended (the Act). The
preliminary margin assigned to Cablesa, S.A. de C.V (Cablesa) is based
on adverse facts available (AFA). The estimated margins of sales at
LTFV are shown in the Suspension of Liquidation section of this notice.
In addition, we preliminarily determine that there is a reasonable
basis to believe or suspect that critical circumstances exist with
respect to PC strand produced and exported by Cablesa.
Interested parties are invited to comment on this preliminary
determination. We will make our final determination not later than 135
days after the date of publication of this preliminary determination in
the Federal Register.
Case History
This investigation was initiated on February 20, 2003.\1\ See
Notice of Initiation of Antidumping Duty Investigations: Prestressed
Concrete Steel Wire Strand from Brazil, India, the Republic of Korea,
Mexico, and Thailand, 68 FR 9050 (February 27, 2003) (Initiation
Notice). Since the initiation of the investigation, the following
events have occurred:
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\1\ The petitioners in this investigation are American Spring
Wire Corp., Insteel Wire Products Company, and Sumiden Wire Products
Corp.
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The Department of Commerce (the Department) set aside a period for
all interested parties to raise issues regarding product coverage. See
Initiation Notice, 68 FR at 9050. Aceros Camesa S.A. de C.V. (Camesa)
and Cablesa submitted comments on product coverage on March 19, 2003.
The petitioners rebutted these comments on March 28, 2003. See Class or
Kind below.
The Department issued a letter on March 7, 2003, to interested
parties in all of the concurrent PC strand antidumping investigations,
providing an opportunity to comment on the Department's proposed model
match characteristics and its hierarchy of characteristics. The
petitioners submitted comments on March 18 and 20, 2003. The Department
also received comments on model matching from Camesa and Cablesa on
March 18, 2003. These comments were taken into consideration by the
Department in developing the model matching characteristics and
hierarchy for all of the PC strand antidumping investigations.
On March 17, 2003, the United States International Trade Commission
(ITC) preliminarily determined that there is a reasonable indication
that imports of the products subject to this investigation are
materially injuring an industry in the United States producing the
domestic like product. See Prestressed Concrete Steel Wire Strand From
Brazil, India, Korea, Mexico, and Thailand, 68 FR 13952 (March 21,
2003) (ITC Preliminary Determination).
On April 4, 2003, the Department issued its antidumping
questionnaire to Camesa and Cablesa, specifying that the responses to
Section A and Sections B-D would be due on April 25, and May 12, 2003,
respectively.\2\ We received responses to Sections A-D of the
antidumping questionnaire and issued supplementary questionnaires where
appropriate.\3\
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\2\ Section A of the questionnaire requests general information
concerning a company's corporate structure and business practices,
the merchandise under investigation that it sells, and the manner in
which it sells that merchandise in all of its markets. Section B
requests a complete listing of all home market sales, or, if the
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in
non-market economy cases). Section C requests a complete listing of
U.S. sales. Section D requests information on the cost of production
of the foreign like product and the constructed value of the
merchandise under investigation. Section E requests information on
further manufacturing.
\3\ See, also, Facts Available section of this notice.
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On June 17, 2003, the petitioners alleged that critical
circumstances exist with respect to imports of PC strand from Mexico.
Accordingly, pursuant to section 732(e) of the Act, on June 18, 2003,
the Department requested information from Camesa and Cablesa regarding
monthly shipments of PC strand to the United States during the period
January 2000 to July 2003. We subsequently shortened this reporting
period by one year. The respondents submitted the requested information
on June 25, 2003. The critical circumstances analysis for the
preliminary determination is discussed below under Critical
Circumstances.
Postponement of Final Determination and Extension of Provisional
Measures
Section 735(a)(2) of the Act provides that a final determination
may be postponed until not later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise. In accordance with 19 CFR
351.210(e)(2), the Department requires that exporters requesting
postponement of the final determination must also request an extension
of the provisional measures referred to in section 733(d) of the Act
from a four-month period until not more than six months. We received a
request to postpone the final determination from both Camesa and
Cablesa. In their requests, Camesa and Cablesa consented to the
extension of provisional measures to no longer than six months. Since
this preliminary determination is affirmative, the requests for
postponement are made by exporters that account for a significant
proportion of exports of the subject merchandise, and there is no
compelling reason to deny the respondents' requests, we have extended
the deadline for issuance of the final determination until the 135th
day after the date of publication of this preliminary determination in
the Federal Register and have extended provisional measures to no
longer than six months.
[[Page 42379]]
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. Where it is not practicable to examine all known
producer/exporters of subject merchandise, section 777A(c)(2) of the
Act permits the Department to investigate either: (1) A sample of
exporters, producers, or types of products that is statistically valid,
based on the information available at the time of selection; or (2)
exporters and producers accounting for the largest volume of the
subject merchandise that can reasonably be examined. In the petition,
the petitioners identified seven producers of PC strand in Mexico. On
April 3, 2003, counsel for Camesa and Cablesa indicated that, to the
best of their knowledge, those two firms were the only Mexican
producers of PC strand that exported to the United States during the
period of investigation (POI).\4\ The U.S. embassy in Mexico City
provided information that corroborates this claim. Additionally, in an
April 2, 2003, submission, Camesa and Cablesa provided the Department
with their U.S. export quantities of subject merchandise during the
POI. Based on the imported quantities reported by the U.S. Bureau of
Customs and Border Protection (BCBP), we are satisfied that the record
supports the conclusion that Camesa and Cablesa are the only Mexican
producers that exported the subject merchandise to the United States.
See Memorandum from Daniel O'Brien, International Trade Compliance
Analyst, to Gary Taverman, Director, Office 5, Re: Selection of
Respondents, dated April 4, 2003.
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\4\ See Memorandum from Daniel O'Brien, International Trade
Compliance Analyst, to the File, Re: Telephone Call with Counsel for
Mexican Producers Aceros Camesa and Cablesa Regarding Investigation
of Prestressed Concrete Steel Wire Strand from Mexico, dated April
3, 2003.
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Period of Investigation
The POI is January 1, 2002, through December 31, 2002. This period
corresponds to the four most recent fiscal quarters prior to the month
of filing of the petition (i.e., January, 2003) involving imports from
a market economy, and is in accordance with our regulations. See 19 CFR
351.204(b)(1).
Scope of Investigation
For purposes of this investigation, PC strand is steel strand
produced from wire of non-stainless, non-galvanized steel, which is
suitable for use in prestressed concrete (both pretensioned and post-
tensioned) applications. The product definition encompasses covered and
uncovered strand and all types, grades, and diameters of PC strand.
The merchandise under investigation is currently classifiable under
subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized Tariff
Schedule of the United States (HTSUS). Although the HTSUS subheadings
are provided for convenience and customs purposes, the written
description of the merchandise under investigation is dispositive.
Class or Kind
On March 19, 2003, the respondents in this investigation requested
that the Department exclude covered PC strand \5\ from the scope of
this investigation. In the same letter, the respondents requested that
in the event that the Department does not exclude covered PC strand
from the scope, the Department determine that there are two separate
classes or kinds of merchandise subject to investigation: (1) Uncovered
PC strand used for pre-tensioning applications and (2) covered PC
strand used for post-tensioning applications. The petitioners submitted
a rebuttal to the respondents requests on March 28, 2003. We have
preliminarily determined that the scope of this investigation properly
includes covered PC strand. Additionally, we have preliminarily
determined that covered and uncovered PC strand constitute one class or
kind of merchandise.
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\5\ Covered PC strand is usually coated with grease and encased
in plastic covering.
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Although the Department has the authority to define the scope of an
investigation, that authority cannot be used to deprive the petitioner
of relief with respect to products the petitioner clearly and
explicitly intended to be included in the investigation, unless the
resulting order would thereby become unadministrable. Therefore,
without the petitioner's consent, the Department has rarely used its
authority to narrow the scope of an investigation. See Memorandum from
Jim Kemp and Salim Bhabhrawala, Import Compliance Specialists, to Holly
Kuga, Acting Deputy Assistant Secretary for Group II, Re: Consideration
of Scope Exclusion Request and Class or Kind Determination, dated July
10, 2003 (Scope Exclusion Request and Class or Kind Determination).
The Mexican respondents argue that covered PC strand should be
excluded because the petitioners do not manufacture the product.
However, the statute does not require that the petitioners have to
produce every type of product that is encompassed by the scope of the
investigation. See Notice of Final Determination of Sales at Less Than
Fair Value: Circular Seamless Stainless Steel Hollow Products From
Japan, 65 FR 42985 (July 12, 2000).
The Department has the authority to narrow the scope of an
investigation, but rarely does so except in cases where the petitioner
makes such a request or the scope as worded creates ambiguities and
administrability problems. In this case, the petitioners' requested
scope specifically states that covered PC strand should be included in
the investigation. Given the clarity of the petitioners' request to
include covered PC strand within the scope and the apparent absence of
any difficulties in its inclusion, we find no reason to exclude covered
PC strand from the scope of this investigation.
We have also preliminarily determined that there is only one class
or kind of merchandise for PC strand. Our determination is based on an
evaluation of the criteria set forth in Diversified Products v. United
States, 572 F. Supp. 883, 889 (CIT 1983) (Diversified Products), which
look to differences in: (1) The general physical characteristics of the
merchandise; (2) the expectations of the ultimate purchaser; (3) the
ultimate use of the merchandise; (4) the channels of trade in which the
merchandise moves, and; (5) the manner in which the product is
advertised or displayed.
In our analysis of the Diversified Products criteria, we find that
the physical similarities of covered and uncovered PC strand are much
greater than the slight change created by the application of grease and
plastic coating. The defining characteristic of these products
continues to be the strand and covering the merchandise does not change
the strand or its chemical or physical properties. Additionally, the
expectations of the user and the use of the products is generally the
same. It appears to be common practice in the industry for end-users to
purchase uncovered PC strand and add covering for post-tension
applications, creating the same end-use expectations for both products.
Furthermore, the use of the product is essentially the same for post
and pre-tensioning applications. Covered and uncovered PC strand is a
product used in construction designed to ``introduce specified
compressive forces into concrete to offset, or neutralize, forces that
occur when the prestressed concrete is subject to load.'' ITC
Preliminary Determination, 68 FR at 19652; see also Investigations Nos.
701-TA-432 and 731-TA-1024-1028 (Preliminary), USITC Pub. 3589, (March
2003) at 9. Therefore, whether the
[[Page 42380]]
product is covered or not does not change the ultimate use; only the
process employed to apply the PC strand differs between the two
products. With regard to channels of trade, we have concluded that end-
use customers purchase both types of PC strand and there is no clear
division in channels of trade between uncovered and covered PC strand.
Finally, we note that no information was placed on the record regarding
the advertising or display of uncovered or covered PC strand.
Therefore, we find that uncovered and covered PC strand constitute
the same class or kind of merchandise. For a further discussion on this
topic, see Scope Exclusion Request and Class or Kind Determination.
Facts Available
For the reasons discussed below, we determine that the use of AFA
is appropriate for the preliminary determination with respect to
Cablesa.
A. Use of Facts Available
Section 776(a)(2) of the Act provides that, if an interested party
withholds information requested by the Department, fails to provide
such information by the deadline or in the form or manner requested,
significantly impedes a proceeding, or provides information which
cannot be verified, the Department shall use, subject to section 782(d)
and (e) of the Act, facts otherwise available in reaching the
applicable determination. Section 782(d) of the Act provides that if
the Department determines that a response to a request for information
does not comply with the Department's request, the Department shall
promptly inform the responding party and provide an opportunity to
remedy the deficient submission. Section 782(e) of the Act further
states that the Department shall not decline to consider submitted
information if all of the following requirements are met: (1) The
information is submitted by the established deadline; (2) the
information can be verified; (3) the information is not so incomplete
that it cannot serve as a reliable basis for reaching the applicable
determination; (4) the interested party has demonstrated that it acted
to the best of its ability; and (5) the information can be used without
undue difficulties.
In accordance with section 776 of the Act, for the reasons
explained below, we preliminarily determine that the use of total AFA
is warranted with respect to Cablesa. The Department received Cablesa's
incomplete response to section D of the antidumping duty questionnaire
on May 28, 2003. In that response, Cablesa failed to respond to section
III (Response Methodology) of the questionnaire. Instead, Cablesa
stated that it was working diligently to complete its response to that
section and that it would submit its response as soon as possible.
Section III of the section D questionnaire instructs the respondent
to fully explain its cost response methodology, provide reconciliations
of the cost of sales from its financial statements to the reported
costs, provide detailed cost build-ups for two models sold in the home
and U.S. markets, provide a worksheet showing the computation of the
general and administrative (G&A) expenses rate, and provide a worksheet
showing the computation of the net financial expense rate. After
receiving a telephone call from Department officials, on June 5, 2003,
Cablesa responded to the missing items in part. See Memorandum from
Salim Bhabhrawala, International Trade Compliance Analyst, to the File,
Re: Missing Portions of Cablesa's Section D Response, dated June 9,
2003. On June 11, 2003, the Department issued Cablesa a supplemental
section D questionnaire requesting that it provide additional
information or clarification on several issues, as well as the missing
items from the prior cost response. The response to this supplemental
questionnaire was due on June 25, 2003. On June 13, 2003 Cablesa
requested an extension until July 2, 2003. The Department granted an
extension until June 30, 2003. Cablesa again submitted a wholly
inadequate response to the supplemental section D questionnaire. The
deficiencies are detailed below.
Throughout the course of this investigation, Cablesa has repeatedly
failed to submit information and data on the record of this proceeding
in the proper manner as established in the Department's regulations.
The Department, on numerous occasions, provided Cablesa detailed
information on how to properly submit the information and data, granted
Cablesa extensions to reply to requests for information, and provided
Cablesa an opportunity to explain and correct the deficiencies in its
responses. However, at no point in the investigation did Cablesa notify
the Department that it had any difficulties in submitting the
information. Instead, Cablesa stated that it was working diligently to
complete its responses.
Because of the deficiencies in Cablesa's initial, subsequent and
supplemental section D responses, the Department finds that the cost
information on the record is so incomplete that it cannot serve as a
reliable basis for reaching a determination. Specifically, Cablesa
failed to provide: (1) A reconciliation of the cost of sales in their
financial statements to the reported costs; (2) detailed cost build-ups
for the requested models sold in the home and U.S. markets; (3)
worksheets showing the weight-averaging of the costs for the models
produced at more than one production facility; (4) an explanation of
its cost accounting system and how costs were allocated between subject
and non-subject merchandise; (5) an explanation of its cost response
methodology; (6) an explanation as to whether the reported costs were
based on world-wide production quantities and not on any specific
market; (7) a reconciliation of the production quantities to the sales
quantities; (8) audited consolidated financial statements together with
independent auditors report and footnotes; (9) audited unconsolidated
financial statements together with independent auditors report and
footnotes; (10) the summary trial balance from which the unconsolidated
financial statements were prepared; (11) treatment of depreciation
expense related to idle assets; (12) an explanation of capitalizing the
G&A expenses in their normal books and records; and (13) the requested
G&A expenses rate calculation.
Cablesa failed to provide adequate responses to the Department's
requests for cost information. Despite the Department's attempts to
obtain the missing information, pursuant to section 782(d) of the Act,
Cablesa failed to rectify its deficiencies. Because the information
that Cablesa failed to report is critical for purposes of the
preliminary dumping calculations, the Department must resort to facts
otherwise available in reaching its preliminary determination, pursuant
to sections 776(a)(2)(A), (C), and (D) of the Act.
On July 10, 2003, the Department issued its final supplemental
questionnaire to Cablesa addressing the deficiencies, as detailed
above, in the company's cost response. Cablesa's response to our
request for information is due on July 17, 2003.
Furthermore, our review of Cablesa's U.S. sales response has led us
to conclude that the reported sales may be inappropriate as the basis
for CEP. The Department's original questionnaire specifically
instructed Cablesa to identify any parties with which it is affiliated,
including affiliations based on control. The questionnaire defines
situations which may indicate control to
[[Page 42381]]
include close relationship with a supplier, (sub) contractor, lender,
distributor, exporter or reseller. Evidence currently on the record
suggests that Cablesa may be affiliated with its sole U.S. customer,
thereby necessitating that Cablesa provide the downstream sales of that
customer. We intend to pursue this issue further.
B. Application of Adverse Inferences for Facts Available
In applying facts otherwise available, section 776(b) of the Act
provides that the Department may use an inference adverse to the
interests of a party that has failed to cooperate by not acting to the
best of its ability to comply with the Department's requests for
information. See, e.g., Notice of Final Determination of Sales at Less
Than Fair Value and Final Negative Critical Circumstances: Carbon and
Certain Alloy Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August
30, 2002). Adverse inferences are appropriate ``to ensure that the
party does not obtain a more favorable result by failing to cooperate
than if it had cooperated fully.'' See Statement of Administrative
Action accompanying the Uruguay Round Agreements Act, H.R. Rep. No.
103-316, at 870 (1994) (SAA). Furthermore, ``{a{time} ffirmative
evidence of bad faith on the part of a respondent is not required
before the Department may make an adverse inference.'' See Antidumping
Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 1997).
We find that the application of an adverse inference in this case
is appropriate. Cablesa failed to provide critical data regarding its
costs. Despite the Department's instructions in the original and
supplemental questionnaires, and the extensions granted, Cablesa made
no effort to provide any explanation or propose an alternate form of
submitting the data. Cablesa's actions have rendered the cost response
useless for purposes of the dumping analysis. This constitutes a
failure on the part of this company to cooperate ``to the best of its
ability to comply with a request for information'' by the Department
within the meaning of section 776 of the Act. Therefore, the Department
has preliminarily determined that in selecting from among the facts
otherwise available, an adverse inference is warranted because Cablesa
has failed to respond adequately to the Department's request. See
Notice of Final Determinations of Sales at Less Than Fair Value:
Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from
Turkey, 65 FR 15123 (March 21, 2000).
C. Selection and Corroboration of Information Used as Facts Available
Where the Department applies AFA because a respondent failed to
cooperate by not acting to the best of its ability to comply with a
request for information, section 776(b) of the Act authorizes the
Department to rely on information derived from the petition, a final
determination, a previous administrative review, or other information
placed on the record. See also 19 CFR 351.308(c); SAA at 829-831. In
this case, because we are unable to calculate a margin for Cablesa, we
assign to Cablesa the highest margin alleged for Mexico in the
petition. See Initiation Notice, 68 FR at 9053.
When using facts otherwise available, section 776(c) of the Act
provides that, when the Department relies on secondary information
(such as the petition) in using facts otherwise available, it must, to
the extent practicable, corroborate that 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.
The Department's regulations state that independent sources used to
corroborate such evidence may include, for example, published price
lists, official import statistics and customs data, and information
obtained from interested parties during the particular investigation.
See 19 CFR 351.308(d); see also SAA at 870.
To assess the reliability of the petition margin for the purposes
of this investigation, to the extent appropriate information was
available, we reviewed the adequacy and accuracy of the information in
the petition for both this preliminary determination and during our
pre-initiation analysis. See Office of AD/CVD Enforcement Initiation
Checklist, at 15 (February 20, 2003) (Initiation Checklist). Also, as
discussed below, we examined evidence supporting the calculations in
the petition to determine the probative value of the margins in the
petition for use as AFA for purposes of this preliminary determination.
In accordance with section 776(c) of the Act, to the extent
practicable, we examined the key elements of the export price (EP) and
normal value (NV) calculations on which the margins in the petition
were based. See Memorandum from Daniel O'Brien, International Trade
Compliance Analyst, to the File, Re: Corroboration of Data Contained in
the Petition for Assigning Facts Available Rate (Corroboration Memo),
dated July 10, 2003.
1. Corroboration of Export Price
The petitioners based EP on prices within the POI for sales of PC
strand manufactured by a Mexican producer and offered for sale directly
to an unaffiliated U.S. customer. The petitioners averaged the gross
prices for the individual prices and deducted U.S. import duties,
freight and insurance to the U.S. port of entry, and U.S. inland
freight from the average price. The petitioners did not deduct U.S.
harbor maintenance and merchandise processing fees, based on the
conservative assumption that the Mexican products were shipped over
land.
In the petition, the Department was provided with two affidavits
for U.S. pricing data for Camesa, one for pricing of \1/2\ inch, 270
grade PC strand delivered to the U.S. port of entry, and the other for
pricing of \1/2\ inch, 270 grade PC strand delivered to the U.S.
customer. For purposes of corroborating these price-to-price
calculations in the petition, we compared this price to Cablesa's U.S.
sales database submitted on June 18, 2003. Using this data, we noted
that the prices listed in the affidavits in the petition were
comparable to the data submitted by Camesa; therefore, we find that the
petitioners' information for U.S. price continues to have probative
value. See Corroboration Memo.
2. Corroboration of Normal Value
With respect to NV, the petitioners provided a home market price
that was obtained from an invoice for a sale by Camesa in Mexico to an
unaffiliated customer. The petitioners state that the invoice price
reported was a delivered price. To calculate the NV, the petitioners
deducted inland freight from the home market price, and, consistent
with our statutory EP circumstances-of-sale calculation methodology,
adjusted the home market price for imputed credit and commissions by
deducting home market credit expenses from the home market prices and
adding the U.S. imputed credit and U.S. commission expenses to this
price.
We confirmed that the invoice submitted by the petitioners was
correctly included in Camesa's home market database submitted to the
Department on June 18, 2003, and note therefore that it has probative
value. See Corroboration Memo at 2.
The implementing regulation for section 776 of the Act, at 19 CFR
351.308(d) states, ``{t{time} he fact that corroboration may not be
practicable in
[[Page 42382]]
a given circumstance will not prevent the Secretary from applying an
adverse inference as appropriate and using the secondary information in
question.'' Additionally, we note that the SAA at 870 specifically
states that, where ``corroboration may not be practicable in a given
circumstance,'' the Department need not ``prove that the facts
available are the best alternative.'' There are no independent sources
for the cost data used to calculate the CV in the petition. Where
relevant information was available from Cablesa's financial statements,
that information was used in the calculation of CV.
Therefore, based on our efforts, described above, to corroborate
information contained in the petition, and in accordance with 776(c) of
the Act, we consider the margins in the petition to be corroborated to
the extent practicable for purposes of this preliminary determination.
Accordingly, in selecting AFA with respect to Cablesa, we have
applied the margin rate of 77.20 percent, which is the highest
estimated dumping margin set forth in the notice of initiation. See
Initiation Notice, 68 FR at 9053.
Product Comparisons
In accordance with section 771(16) of the Act, all products
produced by the respondents covered by the description in the Scope of
Investigation section, above, and sold in Mexico during the POI, are
considered to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. We have relied on four
criteria to match U.S. sales of subject merchandise to comparison-
market sales of the foreign like product: diameter, covering/coating,
grade, and type. 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 listed above.
Fair Value Comparisons
To determine whether sales of PC strand from Mexico were made in
the United States at LTFV, we compared the EP and the constructed
export price (CEP) to the NV, as described in the Export Price and
Constructed Export Price and Normal Value sections of this notice. In
accordance with section 777A(d)(1)(A)(i) of the Act, we calculated
weighted-average EPs and CEPs. We compared these to weighted-average
home market prices in Mexico. For Camesa, we compared all U.S. and home
market sales made during the POI, based on the date of issuance of
Camesa's purchase orders. We determined this to be the appropriate date
of sale because the quantity and price of the sales did not change
after the date of the purchase order.
Export Price and Constructed Export Price
For the price to the United States, we used, as appropriate, EP or
CEP, as defined in sections 772(a) and 772(b) of the Act, respectively.
Section 772(a) of the Act defines EP as the price at which the subject
merchandise is first sold before the date of importation by the
producer or exporter outside of the United States to an unaffiliated
purchaser in the United States or to an unaffiliated purchaser for
exportation to the United States, as adjusted under subsection 722(c)
of the Act.
Section 772(b) of the Act defines CEP as the price at which the
subject merchandise is first 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, as adjusted under subsections 772(c) and (d) of the Act.
For Camesa, we calculated EP and CEP, as appropriate, based on the
packed prices charged to the first unaffiliated customer in the United
States. We found that Camesa made EP sales during the POI. These sales
are properly classified as EP sales because they were made outside the
United States by the exporter or producer to unaffiliated customers in
the United States prior to the date of importation. We note that
Camesa's affiliated reseller in the United States provided certain
administrative services pertaining to the reported EP sales. However,
our analysis of sales documents in the questionnaire response,
indicated that these services were minor and that the invoicing was
done by Camesa and payment was made to Camesa. Therefore, since CEP was
not otherwise warranted based on the facts on the record, we have
preliminarily concluded that the sales were, in fact, EP. We will
continue to analyze these sales and this issue for the final
determination.
We also found that Camesa made CEP sales during the POI. These
sales are properly classified as CEP sales because they were made for
the account of Camesa, by a seller affiliated with Camesa, to an
unaffiliated purchaser in the United States.
In accordance with section 772(c)(2) of the Act, for both EP and
CEP sales we made deductions from the starting price for movement
expenses and export taxes and duties, where appropriate. These included
inland freight, insurance expenses, brokerage and handling fees, and
customs duties. Section 772(d)(1) of the Act provides for additional
adjustments to calculate CEP. Accordingly, where appropriate, we
deducted direct and indirect selling expenses related to commercial
activity in the United States. Pursuant to section 772(d)(3) of the
Act, where applicable, we made an adjustment for CEP profit.
Regarding CEP profit and deductions from the starting price, we
recalculated the indirect selling expenses incurred by Camesa's U.S.
affiliate, based on the affiliate's 2002 income statement. See
Memorandum from Jim Kemp, Import Compliance Specialist, to Constance
Handley, Program Manager, Re: Analysis Memorandum for Aceros Camesa
S.A. de C.V., dated July 10, 2003.
Normal Value
A. Selection of Comparison Markets
Section 773(a)(1) of the Act directs that NV be based on the price
at which the foreign like product is sold in the home market, provided
that the merchandise is sold in sufficient quantities (or value, if
quantity is inappropriate), that the time of the sales reasonably
corresponds to the time of the sale used to determine EP or CEP, and
that there is no particular market situation that prevents a proper
comparison with the EP or CEP. The statute contemplates that quantities
(or value) will normally be considered insufficient if they are less
than five percent of the aggregate quantity (or value) of sales of the
subject merchandise to the United States.
We found that Camesa had a viable home market for PC strand. As
such, Camesa submitted home market sales data for purposes of the
calculation of NV.
In deriving NV, we made adjustments as detailed in the Calculation
of Normal Value Based on Home Market Prices section, below.
B. Cost of Production Analysis
Based on allegations contained in the petition, and in accordance
with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to
believe or suspect that PC strand sales were made in Mexico at prices
below the cost of production (COP). See Initiation Notice, 68 FR 9050.
As a result, the Department has conducted an investigation to determine
whether Camesa made home market sales at prices below their respective
COPs during the POI within the meaning of section 773(b) of the Act.
[[Page 42383]]
We conducted the COP analysis described below.
1. Calculation of Cost of Production
In accordance with section 773(b)(3) of the Act, we calculated a
weighted-average COP based on the sum of the cost of materials and
fabrication for the foreign like product, plus amounts for the home
market G&A expenses, including interest expenses, and packing expenses.
We relied on the COP data submitted by Camesa in its cost questionnaire
response, except for an adjustment to the calculation of Camesa's
interest expense ratio to include net foreign exchange gains and losses
and exclude monetary position gain. See Memorandum from Margaret Pusey,
Accountant, to Neal M. Halper, Director, Office of Accounting, Re: Cost
of Production Calculation Adjustments for the Preliminary
Determination, dated July 10, 2003.
2. Test of Home Market Sales Prices
We compared the adjusted weighted-average COP for Camesa to its
home-market sales prices of the foreign like product, as required under
section 773(b) of the Act, to determine whether these sales had been
made at prices below the COP within an extended period of time (i.e., a
period of one year) in substantial quantities and whether such prices
were sufficient to permit the recovery of all costs within a reasonable
period of time.
On a model-specific basis, we compared the revised COP to the home
market prices, less any applicable movement charges, discounts,
rebates, and direct and indirect selling expenses (which were also
deducted from COP).
3. Results of the COP Test
Pursuant to section 773(b) of the Act, which provides that sales
made below COP may be disregarded only if, among other things, they are
made in ``substantial quantities'' (i.e. 20 percent or more of a
respondent's sales of a given product), we did not disregard any below-
cost sales because we determined that the below-cost sales were not
made in ``substantial quantities.'' As this was the case for all
products sold in the home market, we did not disregard any sales as
below-cost.
C. Calculation of Normal Value Based on Home Market Prices
We determined NV for Camesa as follows. We made adjustments for any
differences in packing and deducted home market movement expenses
pursuant to sections 773(a)(6)(A) and 773(a)(6)(B)(ii) of the Act. In
addition, where applicable in comparison to EP transactions, we made
adjustments for differences in circumstances of sale (COS) pursuant to
section 773(a)(6)(C)(iii) of the Act.
We made COS adjustments for Camesa's EP transactions by deducting
direct selling expenses incurred for home market sales (credit
expenses) and adding U.S. direct selling expenses (credit expenses).
D. Level of Trade/Constructed Export Price Offset
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 as the EP or CEP transaction. The NV level of
trade is that of the starting-price sales in the comparison market. For
EP sales, the U.S. level of trade is also the level of the starting-
price sale, which is usually from exporter to importer. For CEP
transactions, it is the level of the constructed sale from the exporter
to the importer.
To determine whether NV sales are at a different level of trade
than EP or CEP transactions, we examine stages in the marketing process
and selling functions along the chain of distribution between the
producer and the unaffiliated customer. If the comparison-market sales
are at a different level of trade 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 level of trade of the export transaction, we make a
level-of-trade adjustment under section 773(a)(7)(A) of the Act.
In implementing these principles in this investigation, we obtained
information from Camesa about the marketing stages involved in the
reported U.S. and home market sales, including a description of the
selling activities performed by the respondent for each channel of
distribution. In identifying levels of trade for EP and home market
sales we considered the selling functions reflected in the starting
price before any adjustments. For CEP sales, we considered only the
selling activities reflected in the price after the deduction of
expenses pursuant to section 772(d) of the Act.
In conducting our level-of-trade analysis for Camesa, we examined
the specific types of customers, the channels of distribution, and the
selling practices of the respondent. Generally, if the reported levels
of trade are the same, 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 may be dissimilar. We found the following.
Camesa has reported one channel of distribution in the home market,
(1) sales to unaffiliated end users and distributors, and three
channels of distribution in the U.S. market, (2) EP sales to
unaffiliated end users, (3) CEP sales through an affiliated importer to
unaffiliated end users, and (4) CEP sales through an affiliated
importer to unaffiliated resellers. Camesa has reported two customer
categories in the home market, (1) distributors and (2) direct
customers. The company performed the same selling functions for all
home market customers, and, therefore, has only one level of trade in
the home market. Camesa has reported two customer categories in the
U.S. market, (1) trading companies and (2) direct customers. In the
U.S. market all of the EP sales were sold to direct customers. In
comparing EP sales to home market sales, we found that the selling
functions performed by Camesa for its different customers and channels
of distribution were very similar in each market. Therefore, we
concluded that the EP and home market levels of trade were the same.
With regard to the U.S. sales through an affiliated importer, which
were all CEP sales, we considered only the selling activities reflected
in the price after the deduction of expenses and profit covered in
section 772(d) of the Act. For home market sales, Camesa provided
selling functions such as sales processing, credit and collections,
inventory, and freight. We found that for CEP sales, except for credit
and collections, Camesa provided the same services with the addition of
packing and documentation for export. Based on the similarities of
selling functions provided by Camesa in both markets, we have
determined that the CEP sales are made at the same level of trade as
the home market sales. Therefore, we find it unnecessary to make any
LOT or CEP adjustments.
Currency Conversions
We made currency conversions into U.S. dollars in accordance with
section 773A of the Act based on exchange rates in effect on the dates
of the U.S. sale, as obtained from the Federal Reserve Bank (the
Department's preferred source for exchange rates).
Critical Circumstances
On June 17, 2003, the petitioners alleged that there is a
reasonable basis to believe or suspect critical circumstances exist
with respect to the antidumping investigations of PC strand
[[Page 42384]]
from Mexico. In accordance with 19 CFR 351.206(c)(2)(i), because
petitioners submitted critical circumstances allegations more than 20
days before the scheduled date of the preliminary determination, the
Department must issue preliminary critical circumstances determinations
not later than the date of the preliminary determination.
Section 733(e)(1) of the Act provides that the Department, upon
receipt of a timely allegation of critical circumstances, will
determine whether there is a reasonable basis to believe or suspect
that: (A)(i) there is a history of dumping and material injury by
reason of dumped imports in the United States or elsewhere of the
subject merchandise, or (ii) the person by whom, or for whose account,
the merchandise was imported knew or should have known that the
exporter was selling the subject merchandise at less than its fair
value and there was likely to be material injury by reason of such
sales, and (B) there have been massive imports of the subject
merchandise over a relatively short period.
According to 19 CFR 351.206(h)(1), in determining whether imports
of the subject merchandise have been ``massive,'' the Department
normally will examine: (i) The volume and value of the imports; (ii)
seasonal trends; and (iii) the share of domestic consumption accounted
for by the imports. In addition, 19 CFR 351.206(h)(2) provides that
``unless the imports during a `relatively short period' have increased
by at least 15 percent over the imports during an immediately preceding
period of comparable duration, the Secretary will not consider the
imports massive.''
In accordance with 19 CFR 351.206(i), the Department defines
``relatively short period'' as generally the period beginning on the
date the proceeding begins (i.e., the date the petition is filed) and
ending at least three months later. This section further provides that,
if the Department finds that importers, exporters or producers had
reason to believe at some time prior to the filing of the petition that
a proceeding was likely, then the Department may consider a period of
not less than three months from that earlier time.
In determining whether the above statutory criteria have been
satisfied, we examined: (1) The evidence presented in the petitioners'
submission of June 17, 2003; (2) exporter-specific shipment data
requested by the Department; (3) evidence obtained since the initiation
of the LTFV investigation (i.e., additional import statistics released
by the Census Bureau); and (4) the ITC preliminary injury
determination.
To determine whether a history of dumping and material injury
exists, the Department generally considers current or previous
antidumping duty orders on the subject merchandise from the country in
question in the United States and current orders in any other country.
The Department will normally not consider the initiation of a case, or
a preliminary or final determination of sales at LTFV in the absence of
an affirmative finding of material injury by the ITC, as indicative of
a history sufficient to satisfy this criterion. See Preliminary
Determination of Critical Circumstances: Steel Concrete Reinforcing
Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). With
regard to imports of PC strand from Mexico, the petitioners make no
specific mention of a history of dumping. We are not aware of any
antidumping order in the United States or elsewhere on PC strand from
Mexico. For this reason, the Department does not find a history of
injurious dumping of the subject merchandise from Mexico pursuant to
section 733(e)(1)(A)(i) of the Act.
In determining whether there is a reasonable basis to believe or
suspect that an importer knew or should have known that the exporter
was selling PC strand at LTFV, the Department must rely on the facts
before it at the time the determination is made. The Department
normally considers margins of 25 percent or more for EP sales and 15
percent or more for CEP sales sufficient to impute knowledge of
dumping. See e.g., Preliminary Determination of Sales at Less Than Fair
Value: Certain Cut-to-Length Carbon Steel Plate From the People's
Republic of China, 62 FR 31972, 31978 (June 11, 1997). The Department
generally bases its decision, with respect to knowledge, on the margins
calculated in the preliminary determination. Because the preliminary
dumping margins for the respondents are greater than 25 percent, we
find there is a reasonable basis to impute knowledge of dumping with
respect to these imports from Mexico.
In determining whether there is a reasonable basis to believe or
suspect that an importer knew or should have known that there was
likely to be material injury by reason of dumped imports, the
Department normally will look to the preliminary injury determination
of the ITC. If the ITC finds a reasonable indication of present
material injury to the relevant U.S. industry, the Department will
determine that a reasonable basis exists to impute importer knowledge
that material injury is likely by reason of dumped imports. See Final
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length
Carbon Steel Plate from the People's Republic of China, 62 FR 61964
(November 20, 1997). In this case, the ITC preliminarily found that
there is material injury to the United States by reason of imports of
subject merchandise from Brazil, India, Mexico, the Republic of Korea,
and Thailand. See Determinations and Views of the Commission, USITC
Publication No. 3589, March 2003. Therefore, we preliminarily find that
there is a reasonable basis to believe or suspect that Mexican
importers knew or should have known that dumped imports of PC strand
from these countries were likely to cause material injury. See
Preliminary Determination of Sales at Less Than Fair Value; Certain
Cut-to-Length Carbon Steel Plate from the People's Republic of China,
62 FR 31972 (June 11, 1997); Preliminary Determination of Sales at Less
Than Fair Value, Certain Cut-to-Length Carbon Steel Plate from the
Russian Federation, 62 FR 31967 (June 11, 1997); Preliminary
Determination of Sales at Less Than Fair Value, Certain Cut-to-Length
Carbon Steel Plate from Ukraine, 62 FR 31958 (June 11, 1997).
In determining whether there are ``massive imports'' over a
``relatively short period,'' pursuant to section 733(e)(1)(B) of the
Tariff Act, the Department normally compares the import volumes of the
subject merchandise for at least three months immediately preceding the
filing of the petition (i.e., the ``base period'') to a comparable
period of at least three months following the filing of the petition
(i.e., the ``comparison period''). However, as stated at 19 CFR
351.206(i), if the Secretary finds importers, exporters, or producers
had reason to believe at some time prior to the beginning of the
proceeding that a proceeding was likely, then the Secretary may
consider a time period of not less than three months from that earlier
time. Imports normally will be considered massive when imports during
the comparison period have increased by 15 percent or more compared to
imports during the base period.
In accordance with 19 CFR 351.206(i), the comparison period must be
at least three months; however, if we determine that importers, or
exporters or producers, had reason to believe that a proceeding was
likely, then the Department may consider a longer period. The
Department requested and obtained from both Camesa and Cablesa monthly
shipment data for 2001, 2002, and January through June 2003. In
addition, we obtained U.S. import data
[[Page 42385]]
for PC strand through April 2003, as reported on the ITC's DataWeb
site. Due to our application of total AFA to Cablesa, we relied on U.S.
import data provided by BCBP to conduct our surge analysis. Since this
import information is only currently available through the end of April
2003, we have decided that three-month base periods and three-month
comparison periods are the most appropriate. Therefore, we have
concluded that the comparison period should be February 2003 to April
2003, while the base period should be November 2002 to January 2003.
Pursuant to 19 CFR 351.206(h), we will not consider imports to be
massive unless imports in the comparison period have increased by at
least 15 percent over imports in the base period. For Camesa, we found
the volume of shipments of PC strand increased by less than 15 percent;
for Cablesa, according to import information obtained from BCBP, we
found the volume of shipments of PC strand increased by more than 15
percent. We therefore find that imports of subject merchandise were
massive in the comparison period for Cablesa, but not for Camesa. See
Memorandum from Salim Bhabrawla and Carol Henninger, International
Trade Compliance Analysts, to Constance Handley, Program Manager, Re:
Antidumping Duty Investigation of Prestressed Concrete Steel Wire
Strand from Mexico and Thailand--Preliminary Affirmative and Negative
Determinations of Critical Circumstances (Critical Circumstances Memo),
dated July 10, 2003.
It is also the Department's practice to conduct its critical
circumstances analysis of companies in the ``All Others'' category
based on the experience of the investigated companies. Because we are
determining that critical circumstances did not exist for Camesa, and
Camesa is the only respondent that has received a margin not based on
AFA in this investigation, we are concluding that critical
circumstances did not exist for companies covered by the ``All Others''
rate.
In summary, we find there is a reasonable basis to believe or
suspect importers had knowledge of dumping and the likelihood of
material injury with respect to PC strand from Mexico. We further find
there have been massive imports of PC strand over a relatively short
period from respondent Cablesa. However, imports from Camesa have been
found to be not massive over a relatively short period. In addition, we
find that imports of PC strand have not been massive over a relatively
short period from companies covered by the ``All-Other'' rate. Given
the analysis summarized above, and described in more detail in the
Critical Circumstances Memo, we preliminarily determine critical
circumstances exist for imports of PC strand produced and exported by
Cablesa.
In accordance with section 733(e)(2) of the Act, upon issuance of
an affirmative preliminary determination of sales at LTFV in the
investigation with respect to PC strand produced and exported by
Cablesa, the Department will direct the BCBP to suspend liquidation of
all entries of PC strand from Mexico that are entered, or withdrawn
from warehouse, for consumption on or after 90 days prior to the date
of publication in the Federal Register of our preliminary determination
in this investigation. BCBP shall require a cash deposit or posting of
a bond equal to the estimated preliminary dumping margins reflected in
the preliminary determinations published in the Federal Register. The
suspension of liquidation to be issued after our preliminary
determination will remain in effect until further notice. We will make
a final determination concerning critical circumstances for all
producers and exporters of subject merchandise from Mexico when we make
our final determinations in this investigation, which will be 135 days
after the date of publication of the preliminary determination.
Verification
In accordance with section 782(i) of the Act, we intend to verify
all information relied upon in making our final determination for
Camesa. Verification of Cablesa's data is contingent upon the
sufficiency of the company's response to our July 10, 2003, request,
and any subsequent requests, for additional information.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we are directing
the BCBP to suspend liquidation of all entries of PC strand from
Mexico, that are entered, or withdrawn from warehouse, for consumption
on or after the date of publication of this notice in the Federal
Register. Additionally, for Cablesa, we are instructing the BCBP to
suspend liquidation of entries made on or after 90 days prior to the
publication of this notice. We are also instructing the BCBP to require
a cash deposit or the posting of a bond equal to the weighted-average
dumping margin as indicated in the chart below. These instructions
suspending liquidation will remain in effect until further notice.
The weighted-average dumping margins are provided below:
------------------------------------------------------------------------
Weighted-
average
Producer/exporter margin
(percentage)
------------------------------------------------------------------------
Aceros Camesa S.A. de C.V................................. 57.64
Cablesa S.A. de C.V....................................... 77.20
All Others................................................ 57.64
------------------------------------------------------------------------
Disclosure
The Department will disclose calculations performed within five
days of the date of publication of this notice to the parties in this
proceeding in accordance with 19 CFR 351.224(b).
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of the Department's preliminary affirmative determination. If the
final determination in this proceeding is affirmative, the ITC will
determine before the later of 120 days after the date of this
preliminary determination or 45 days after the final determination
whether imports of PC strand from Mexico are materially injuring, or
threaten material injury to, the U.S. industry.
Public Comment
Interested parties are invited to comment on the preliminary
determination. Interested parties may submit case briefs on the later
of 50 days after the date of publication of this notice or one week
after the issuance of the verification reports. See 19 CFR
351.309(c)(1)(i). Rebuttal briefs, the content of which is limited to
the issues raised in the case briefs, must be filed within five days
after the deadline for the submission of case briefs. See 19 CFR
351.309(d). A list of authorities used, a table of contents, and an
executive summary of issues should accompany any briefs submitted to
the Department. Executive summaries should be limited to five pages
total, including footnotes. Further, we request that parties submitting
briefs and rebuttal briefs provide the Department with a copy of the
public version of such briefs on diskette.
In accordance with section 774 of the Act, we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on arguments raised in case or rebuttal briefs. If a request
for a hearing is made, we will tentatively hold the hearing two days
after the deadline for submission of rebuttal briefs at the U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230, at a time and in a room to be determined.
[[Page 42386]]
Parties should confirm by telephone the date, time, and location of the
hearing 48 hours before the scheduled date.
Interested parties who wish to request a hearing, or to participate
in a hearing if one is requested, must submit a written request to the
Assistant Secretary for Import Administration, U.S. Department of
Commerce, Room 1870, within 30 days of the date of publication of this
notice. Requests should contain: (1) The party's name, address, and
telephone number; (2) the number of participants; and (3) a list of the
issues to be discussed. At the hearing, oral presentations will be
limited to issues raised in the briefs. See 19 CFR 351.310(c). The
Department will make its final determination no later than 135 days
after the date of publication of this preliminary determination.
This determination is issued and published pursuant to sections
733(f) and 777(i)(1) of the Act.
Dated: July 10, 2003.
Jeffrey May,
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-18130 Filed 7-16-03; 8:45 am]