Brass Sheet and Strip From Germany: Preliminary Results of Antidumping Duty Administrative Review, 18801-18806 [2010-8419]

Download as PDF Federal Register / Vol. 75, No. 70 / Tuesday, April 13, 2010 / Notices DEPARTMENT OF COMMERCE International Trade Administration [A–428–602] Brass Sheet and Strip From Germany: Preliminary Results of Antidumping Duty Administrative Review sroberts on DSKD5P82C1PROD with NOTICES AGENCY: Import Administration, International Trade Administration, U.S. Department of Commerce. SUMMARY: The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on brass sheet and strip (BSS) from Germany. For the period of review (POR) March 1, 2008, through February 28, 2009, we have preliminarily determined that U.S. sales have not been made below normal value (NV). If these preliminary results are adopted in our final results, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries of subject merchandise during the POR. Interested parties are invited to comment on these preliminary results. DATES: Effective Date: April 13, 2010. FOR FURTHER INFORMATION CONTACT: Dennis McClure or George McMahon, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington DC 20230; telephone: (202) 482–5973 or (202) 482– 1167, respectively. SUPPLEMENTARY INFORMATION: Background The Department published in the Federal Register the antidumping duty order on BSS from Germany on March 6, 1987 (52 FR 6997), amended on September 23, 1987 (52 FR 35750). On May 5, 2008, the Department published a notice of opportunity to request an administrative review of this order for the POR. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 74 FR 9077 (March 2, 2009). On March 30, 2009, the Department received a timely request for an administrative review of this antidumping duty order from Wieland-Werke AG (Wieland). On April 27, 2009, we published a notice initiating an administrative review of the antidumping duty order on BSS from Germany covering one respondent, Wieland. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 74 FR 19042 (April 27, 2009). On May 7, 2009, the Department issued an antidumping duty VerDate Nov<24>2008 17:33 Apr 12, 2010 Jkt 220001 questionnaire to Wieland. We received Wieland’s response to Section A of the Department’s questionnaire on June 11, 2009 (Section AQR), Sections B–C on July 1, 2009 (Section B–C QR), and Section D on July 21, 2009 (Section DQR). The Department received comments from the Petitioners 1 regarding Wieland’s questionnaire responses on June 25, 2009, July 2, 2009, October 22, 2009, and February 4, 2010. After reviewing the Sections A through D responses from Wieland, the Department issued supplemental questionnaires to Wieland. The Department issued additional supplemental questions, after reviewing Wieland’s supplemental questionnaire responses. On November 18, 2009, the Department issued an extension of the deadline for the preliminary results of this antidumping duty administrative review from December 1, 2009, until March 31, 2010. See Brass Sheet and Strip from Germany: Notice of Extension of Time Limit for Preliminary Results of Administrative Review, 74 FR 59523 (November 18, 2009). As explained in the memorandum from the Deputy Assistant Secretary for Import Administration, the Department has exercised its discretion to toll deadlines for the duration of the closure of the Federal Government from February 5, through February 12, 2010. Thus, all deadlines in this segment of the proceeding have been extended by seven days. The revised deadline for the preliminary results of this antidumping duty administrative review is now April 7, 2010. See Memorandum to the Record from Ronald Lorentzen, DAS for Import Administration, regarding ‘‘Tolling of Administrative Deadlines As a Result of the Government Closure During the Recent Snowstorm,’’ dated February 12, 2010.’’ In letters to the Department dated March 4, 2010, and March 12, 2010, the Petitioners state that Wieland was the importer of record for the U.S. sale made during the POR and, therefore, Wieland is liable for any antidumping duties assessed. Pursuant to Wieland’s role as the importer, the Petitioners allege that Wieland has put itself in a position to make payment or reimbursement of any antidumping duties related to its U.S. sale. As such, the Petitioners assert that the transaction in question is subject to a reduction in the export price, pursuant 1 The Petitioners include GBC Metals, LLC of Global Brass and Copper, Inc., doing business as Olin Brass, Heyco Metals, Inc., Luvata Buffalo, Inc., PMX Industries, Inc., and Revere Copper Products, Inc. PO 00000 Frm 00019 Fmt 4703 Sfmt 4703 18801 to 19 CFR 351.402(f).2 In a letter to the Department dated March 8, 2010, at page 6, Wieland rebuts the Petitioners’ assertion that its single U.S. sale is subject to the aforementioned regulation, arguing that Wieland ‘‘was both the exporter and importer and thus cannot reimburse itself.’’ The Department has considered the facts of the instant review. Consistent with the Department’s practice with respect to this issue, we do not find that Wieland’s sale to the United States during the POR is subject to 19 CFR 351.402(f). Our decision as to reimbursement is based upon our interpretation of this regulation, which is that two separate corporate entities must exist to invoke the reimbursement regulation. See Circular Welded NonAlloy Steel Pipe and Tube From Mexico: Final Results of Antidumping Duty Administrative Review, 63 FR 33041, 33044 (June 17, 1998). In this instance, though it is both an exporter and importer, there is still only one corporate entity, Wieland, not two. Scope of the Order The scope of this order covers shipments of brass sheet and strip, other than leaded and tinned, from Germany. The chemical composition of the covered products is currently defined in the Copper Development Association (C.D.A.) 200 Series or the Unified Numbering System (U.N.S.) C2000; this review does not cover products the chemical compositions of which are defined by other C.D.A. or U.N.S. series. In physical dimensions, the products covered by this review have a solid rectangular cross section over 0.006 inches (0.15 millimeters) through 0.188 inches (4.8 millimeters) in finished thickness or gauge, regardless of width. Coiled, wound-on-reels (traverse wound), and cut-to-length products are included. The merchandise is currently classified under Harmonized Tariff Schedule of the United States (HTSUS) item numbers 7409.21.00 and 7409.29.00. Although the HTSUS item numbers are provided for convenience and customs purposes, the Department’s written description of the scope of this order remains dispositive. Period of Review The period of review is March 1, 2008, through February 28, 2009. 2 19 CFR 351.402(f) states: (f) Reimbursement of antidumping duties and countervailing duties—(1) In general. (i) In calculating the export price (or the constructed export price), the Secretary will deduct the amount of any AD duty or CVD duty which the exporter or producer: (A) Paid directly on behalf of the importer; or (B) Reimbursed to the importer. E:\FR\FM\13APN1.SGM 13APN1 18802 Federal Register / Vol. 75, No. 70 / Tuesday, April 13, 2010 / Notices Verification As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), we intend to verify the information relied upon prior to the final results of the instant review. Our verification results will be outlined in the public version of our verification report, which will be on file in the Department’s Central Records Unit (CRU), Room 1117 of the Main Commerce Building. Analysis Product Comparisons In accordance with section 771(16) of the Act, we considered all products produced by the respondent that are covered by the description contained in the ‘‘Scope of the Order’’ section above and were sold in the home market during the POR, to be the foreign like product for purposes of determining appropriate product comparisons to U.S. sales. 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 most similar foreign like product on the basis of the characteristics listed in Appendix V of the initial antidumping questionnaire we provided to Wieland.3 When there were no appropriate comparison market sales of comparable merchandise, we compared the merchandise sold in the United States to constructed value (CV), in accordance with section 773(a)(4) of the Act. For purposes of the preliminary results, where appropriate, we have calculated the adjustment for differences in merchandise based on the difference in the variable cost of manufacturing (VCOM) between each U.S. model and the most similar home market model selected for comparison. sroberts on DSKD5P82C1PROD with NOTICES Normal Value Comparisons To determine whether sales of subject merchandise to the United States were made at less than NV, we compared the export price (EP) to the NV, as described in the ‘‘Export Price’’ and ‘‘Normal Value’’ sections of this notice. During the POR, Wieland had only one shipment of BSS to the United States. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to the individual U.S. transaction price. In order to lessen the potential distortion to sales prices which result from significantly changing costs, we are using a quarterly costing approach; we have not made price-to3 See the Department’s Antidumping Duty Questionnaire issued to Wieland, dated May 7, 2009, on the record in the CRU. VerDate Nov<24>2008 17:33 Apr 12, 2010 Jkt 220001 price comparisons outside of a quarter. See below and Memorandum through James Terpstra from Dennis McClure, titled ‘‘Sales Analysis Memorandum— Wieland-Werke AG (Sales Analysis Memo—Wieland),’’ dated April 7, 2010, and available in the CRU. Export Price For the price to the United States, we used EP, in accordance with section 772(a) of the Act. We calculated EP when the merchandise was sold by the producer or exporter outside of the United States directly to the first unaffiliated purchaser in the United States prior to importation. We based EP on the reported delivery term to the first unaffiliated customer in, or for exportation to, the United States. In accordance with section 772(c)(2) of the Act, we made deductions, where appropriate, for movement expenses including inland freight from plant or warehouse to port of exportation, foreign brokerage, handling and loading charges, international freight, insurance, U.S. inland freight expenses, other transportation expenses for cargo scanning and port charges, and U.S. duties. See Sales Analysis Memo— Wieland. As stated at 19 CFR 351.401(i), the Department will use the respondent’s invoice date as the date of sale unless another date better reflects the date upon which the exporter or producer establishes the essential terms of sale. Wieland reported the order confirmation date as the date of sale for the U.S. market and the earlier of fabrication order confirmation date, shipment date, or invoice date as the sale date in the home market, claiming that these dates reflect the date on which the material terms of sale were finalized. See Section B–C QR at B–12– B–13 and C–7. We have examined the information on the record and preliminarily find that the invoice date better reflects the date upon which the producer established its material terms of sale in both the U.S. and home markets. Specifically, Wieland reported that its ‘‘written general terms of delivery, applicable to both domestic and export sales, provide that Wieland is entitled to make excess or short deliveries up to 10 percent of the agreed weights or units. However, Wieland has unwritten understandings/ established practices with certain customers allowing for greater variations without prior approval.’’ See Wieland’s Section A–C Supplemental Questionnaire Response (Section A–C SQR), dated September 29, 2010, at SAC–29. Thus, Wieland has reported sales transactions, in both the U.S. and PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 home markets, in which the quantity exceeds its standard tolerance, and the basis for such increases can only be supported by ‘‘unwritten understandings/established practices.’’ Based on the fact that there is no written contract or sales agreement documenting agreement to the change in terms, the Department finds that the invoice date represents the date in which the material terms of sale are finalized.4 Because the data specific to the date of sale discussion are proprietary in nature, see the Department’s sales calculation memorandum from Dennis McClure through James Terpstra to the File titled, ‘‘Sales Analysis Memo—Wieland’’ for additional details. Normal Value A. Home Market Viability In accordance with section 773(a)(1)(C) 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 NV, we compared Wieland’s volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise. Pursuant to section 773(a)(1)(B) of the Act and 19 CFR 351.404(b), because Wieland’s aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determined that the home market was viable. Arm’s-Length Test 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, direct selling expenses, discounts, and packing. In accordance with the Department’s practice, if the prices charged to an affiliated party were, on average, between 98 and 102 percent of the prices charged to unaffiliated parties for merchandise identical or most similar to that sold to the affiliated party, we consider the sales to be at arm’s-length prices. See 19 CFR 351.403(c); see also Certain CorrosionResistant Carbon Steel Flat Products from the Republic of Korea: Notice of Preliminary Results of the Antidumping Duty Administrative Review, 74 FR 4 See Notice of Final Determination of Sales at Less Than Fair Value: Citric Acid and Certain Citrate Salts from Canada, 74 FR 16843 (April 13, 2009), and accompanying Issues and Decision Memorandum at Comment 1. E:\FR\FM\13APN1.SGM 13APN1 Federal Register / Vol. 75, No. 70 / Tuesday, April 13, 2010 / Notices sroberts on DSKD5P82C1PROD with NOTICES 46110, 46112 (September 8, 2009); unchanged in the final, see Certain Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Final Results of the Fifteenth Administrative Review, 75 FR 13490 (March 22, 2010). Conversely, where the affiliated party did not pass the arm’slength test, all sales to that affiliated party have been excluded from the NV calculation. See Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 (November 15, 2002). For the arm’s-length test, we matched only affiliated sales to unaffiliated sales within the same quarter in which the sale occurred, because we are using a quarterly costing approach, to lessen the potential distortion to sales prices which result from significantly changing costs. B. Cost Reporting Period The Department’s normal practice is to calculate an annual weighted-average cost for the entire POR. See, e.g., Certain Pasta from Italy: Final Results of Antidumping Duty Administrative Review, 65 FR 77852 (December 13, 2000) (Pasta from Italy), and accompanying Issues and Decision Memorandum at Comment 18 and Notice of Final Results of Antidumping Duty Administrative Review of Carbon and Certain Alloy Steel Wire Rod from Canada, 71 FR 3822 (January 24, 2006) (Wire Rod from Canada), and accompanying Issues and Decision Memorandum at Comment 5 (explaining the Department’s practice of computing a single weighted-average cost for the entire period). This methodology is predictable and generally applicable in all proceedings. However, the Department recognizes that possible distortions may result when our annual average cost method is used during a period of significant cost changes. In these circumstances, in determining whether to deviate from our normal methodology, the Department has evaluated the casespecific record evidence using two primary factors: (1) the change in the cost of manufacturing (COM) recognized by the respondent during the POR must be deemed significant; and, (2) the record evidence must show that sales during the shorter averaging periods could be reasonably linked with the cost of production (COP) or CV during the same shorter averaging periods. See, e.g., Stainless Steel Plate in Coils From Belgium: Final Results of Administrative Review, 73 FR 75398, 75399 (December 11, 2008) (SSPC from Belgium) and Stainless Steel Sheet and Strip in Coils from Mexico: Final Results of VerDate Nov<24>2008 17:33 Apr 12, 2010 Jkt 220001 Administrative Review, 74 FR 6365 (February 9, 2009) (2006–2007 Final Results). a. Significance of Cost Changes Record evidence indicates that Wieland experienced significant changes in the total COM during the POR and that the change in COM is primarily attributable to the price volatility for copper and zinc, major inputs consumed in the production of the merchandise under consideration. The record indicates that copper and zinc prices have decreased dramatically throughout the POR. Specifically, the record data show that the percentage difference between the high and low quarterly costs for brass products exceeded 25 percent during the POR. As a result, we have determined for the preliminary results that the changes in COM for Wieland are significant. b. Linkage Between Cost and Sales Information If the Department finds cost changes to be significant in a given administrative review or investigation, the Department subsequently evaluates whether there is evidence of linkage between the cost changes and the sales prices for the given POI/POR. Our definition of linkage does not require direct traceability between specific sales and their specific production cost, but rather relies on whether there are elements which would indicate a reasonable correlation between the underlying costs and the final sales prices levied by the company. These correlative elements may be measured and defined in a number of ways depending on the associated industry, and the overall production and sales processes. In the instant case, Wieland’s sales process is effectively the sale of two separate products: commodity metal (i.e., copper and zinc) and fabrication. For metal, which represents a significant part of the total price, customers are charged a price that is determined, for the most part, on the London Metal Exchange (LME) metal price on the date of the customer’s choosing (the ‘‘metal fixation date’’). We find that, because both the metal costs and prices charged for the metal are reasonably linked to the market prices promulgated by the LME, there is a reasonable link between the underlying costs and sales prices. In light of the two factors discussed above, we have preliminarily determined that a quarterly costing approach with respect to Wieland would lead to more accurate comparisons in our antidumping duty PO 00000 Frm 00021 Fmt 4703 Sfmt 4703 18803 calculations. Thus, we used quarterly indexed annual average direct material costs and annual weighted-average fabrication costs in the COP and CV calculations. C. Cost of Production Analysis Because we found that Wieland did not act to the best of its ability in providing information to the Department in the most recently completed administrative review in which it participated, we applied total adverse facts available which included a finding on that basis that Wieland’s sales were made below cost. Therefore, the Department disregarded sales below the COP in the last completed review in which Wieland participated.5 Therefore, the Department finds reasonable grounds to believe or suspect, pursuant to section 773(b)(2)(A)(ii) of the Act, that sales of the foreign like product under consideration for the determination of NV in this review may have been made at prices below COP. Thus, pursuant to section 773(b)(1) of the Act, we examined whether sales from Wieland in the home market were made at prices below the COP. We compared sales of the foreign like product in the home market with model-specific COP figures. In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the costs of materials and fabrication employed in producing the foreign like product, plus selling, general and administrative (SG&A) expenses, financial expenses and all costs and expenses incidental to placing the foreign like product in packed condition and ready for shipment. In our sales-below-cost analysis, we relied on home market sales and COP information provided by Wieland in its questionnaire responses, except where noted below. As discussed above, we used quarterly indexed annual average direct material costs and annual weightedaverage conversion costs in the COP and CV calculations. See Sales Analysis Memo—Wieland and Memorandum from Ernest Gziryan to Neal Halper ‘‘Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results—Wieland-Werke AG (Wieland),’’ dated April 7, 2010 (Wieland Cost Calculation Memo— Wieland). Volatility in Raw Materials Wieland explains that it offers three types of sales: single date (release) 5 See Final Results of Antidumping Duty Administrative Review: Brass Sheet and Strip from Germany, 64 FR 43342 (August 10, 1999). E:\FR\FM\13APN1.SGM 13APN1 sroberts on DSKD5P82C1PROD with NOTICES 18804 Federal Register / Vol. 75, No. 70 / Tuesday, April 13, 2010 / Notices pricing, split date pricing, and tolling. See Section AQR at 34–35. In its Section AQR, Wieland asserts that the volatility in daily commodity metal prices experienced during the POR poses unique issues that the Department’s traditional antidumping methodology does not adequately account for. For example, Wieland states that in the case of split pricing sales in the home market, a U.S. sale with a metal fixation date occuring on one date would be compared with home market sales in which that metal fixation date falls, not only on a different date, but also in completely different months (since metal fixation can occur both before and after the fabrication order confirmation date). Wieland states that customers in the United States and Germany that purchased metal with the same metal fixation date will pay the same price for the LME metal price component of their metal purchase. However, Wieland asserts that if the price comparison is made such that sales with different metal fixation dates are compared, margins will be artificially created or masked simply because LME metal prices fluctuate. Wieland asserts that, because the LME metal price is a full pass through to the customer, and is treated as such by Wieland both in its sales and cost accounting, the Department should make a circumstance of sale (COS) adjustment which adjusts for the price difference resulting from differences in metal fixation dates between U.S. and home market sales. More specifically, Wieland proposes that the Department adjust all U.S. and Home Market sales prices by the LME metal price for the alloy on the metal fixation date associated with the specific sale. In its letter dated June 25, 2009, at 14, the Petitioners state that the Department has never, to the best of its knowledge, adjusted metal pricing components as a circumstance of sale. The Petitioners state that if Wieland believes that changes in the prices of copper and zinc during the POR were (1) Very significant, (2) related to long-term changes and (3) that in and of themselves, (i.e., apart from other cost factors), unduly changed total production costs, then the proper methodological remedy might be a potential change in the temporal structure of the cost of production. Id. The Department does not find that a COS adjustment is warranted in the instant review, because it is the Department’s practice to limit such adjustments to direct selling expenses. However, the Department preliminarily finds that, based on the sales pricing structure reported by Wieland and the VerDate Nov<24>2008 17:33 Apr 12, 2010 Jkt 220001 volatility experienced in commodity metal prices in this particular POR, the date of sale methodology and transaction-to-average price comparisons may not adequately account for the volatility in metal prices which occurred during the POR. Therefore, for these preliminary results, we are accounting for the volatility in commodity metal prices by ensuring that the home market sales selected for comparison purposes will first be matched based on the invoice date as the date of sale, and secondly, will have a metal fixation date in the same month as the metal fixation date of the U.S. sale. Absent a metal fixation date in the same month, we will make comparisons based on the same quarter of the POR as the metal fixation date reported for Wieland’s U.S. sale. Absent such a match, we will use CV as the basis for comparison to Wieland’s U.S. sale. We find that by limiting the comparisons to sales made within the same quarter of the POR and the same month for the metal fixation date, we reasonably account for the volatility experienced by Wieland during the POR associated with its split date pricing structure, thereby, preventing potential distortions in the Department’s transaction-to-average price comparison methodology. 1. Calculation of COP Before making any comparisons to NV, we conducted a quarterly COP analysis of Wieland pursuant to section 773(b) of the Act to determine whether Wieland comparison market sales were made at prices below the COP. We calculated the COP based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for SG&A expenses and packing, in accordance with section 773(b)(3) of the Act. 2. Test of Comparison Market Prices As required under section 773(b)(2) of the Act, we compared the quarterly weighted-average COP to the per-unit price of the comparison market sales of the foreign like product based on the metal fixation date to determine whether these sales had been made at prices below the COP within an extended period of time in substantial quantities, and whether such prices were sufficient to permit the recovery of all costs within a reasonable period of time. We determined the net comparison market prices for the belowcost test by subtracting from the gross unit price any applicable movement charges, discounts, rebates, direct and indirect selling expenses (also subtracted from the COP), and packing PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 expenses. See Sales Analysis Memo— Wieland. 3. Results of COP Test Where less than 20 percent of the respondent’s home market sales of a given model were at prices below the COP, we did not disregard any belowcost sales of that model because we determined that the below-cost sales were not made within an extended period of time and in ‘‘substantial quantities.’’ Where 20 percent or more of the respondent’s home market sales of a given model were at prices less than the COP, we disregarded the below-cost sales because: (1) they were made within an extended period of time in ‘‘substantial quantities,’’ in accordance with sections 773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of prices to the indexed POR weightedaverage COPs, they were at prices which would not permit the recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Therefore, for Wieland, we disregarded below-cost sales of a given product of 20 percent or more and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act. See Sales Analysis Memo—Wieland. D. Calculation of Normal Value Based on Comparison Market Prices We calculated NV based on the reported delivery terms to comparison market customers. We made deductions from the starting price, when appropriate, for handling, loading, inland freight, warehousing, inland insurance, discounts, and rebates. In accordance with sections 773(a)(6)(A) and (B) of the Act, we added U.S. packing costs and deducted comparison market packing, respectively. In addition, we made circumstance-of-sale adjustments for direct expenses, including imputed credit expenses, in accordance with section 773(a)(6)(C)(iii) of the Act. Where appropriate, we added other revenue and applied billing adjustments to the gross unit price. When comparing U.S. sales with comparison market sales of similar, but not identical, merchandise, we also made adjustments for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We based this adjustment on the difference in the variable cost of manufacture (VCOM) for the foreign like product and subject merchandise, using weightedaverage costs. E:\FR\FM\13APN1.SGM 13APN1 sroberts on DSKD5P82C1PROD with NOTICES Federal Register / Vol. 75, No. 70 / Tuesday, April 13, 2010 / Notices E. Level of Trade Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same level of trade (LOT) as the EP or CEP. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 (November 19, 1997) (Plate from South Africa). Consistent with 19 CFR 351.412, to determine whether comparison market sales were at a different LOT than the U.S. sales, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated (or arm’s-length) customers, including selling functions, class of customer (customer category), and the level of selling expenses for each type of sale. If the comparison market sales were at a different LOT and the differences affect 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 will make an LOT adjustment under section 773(a)(7)(A) of the Act. Wieland reported that its U.S. sale and home market sales were made at the same LOT. Wieland has two channels of distribution for U.S. sales: (1) manufacture to order and ship directly to customer, and (2) sales through Wieland Metals, Inc. The one sale occurring during the POR was made through channel (1) to an end-user. Wieland reported that during the POR, it sold subject merchandise through one channel of distribution in both the U.S. and home market, which is direct to the customer, to one customer category in the United States and three customer categories in the home market, consisting of OEM/end users, broker/ distributors, and service center/slitting center. Our analysis of the selling activities for Wieland shows that there is overlap in these activities for channels of distribution and customer categories. Wieland performs similar selling activities for all customer categories and channels of distribution. Wieland reports that its sales functions are basic services provided for all sales. For example, every sale involves packing, VerDate Nov<24>2008 17:33 Apr 12, 2010 Jkt 220001 order processing, the salesperson’s time, and logistics support. Furthermore, Wieland states that its selling functions do not vary by type of customer. See Section AQR at Section A–C SQR at SAC–7. In the U.S. market, Wieland reported that its sale was made through one channel of distribution to one customer category, and therefore, at one LOT. The Department has determined that Wieland’s home market sales were made at one LOT and at the same stage of marketing as the U.S. sales LOT. Therefore, the Department will not make an LOT adjustment for Wieland’s sale to the United States. Currency Conversion For purposes of these preliminary results, we made currency conversions in accordance with section 773A(a) of the Act, based on the official exchange rates published by the Federal Reserve Bank. Preliminary Results of Review As a result of our review, we preliminarily determine that the following weighted-average percentage margin exists for the period March 1, 2008, through February 28, 2009, for Wieland: Manufacturer/exporter Wieland-Werke AG ................... Margin (percent) 0.00 The Department will disclose the calculations performed for these preliminary results within five days of the date of publication of this notice to the parties of this proceeding, in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Pursuant to section 782(i) of the Act, the Department intends to verify the information upon which we will rely in making our final determination. As a result, we intend to establish the briefing schedule upon the completion of verification. Pursuant to section 751(3)(A) of the Act and 19 CFR 351.213(h), the Department intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, or at a hearing, if requested, within 120 days of publication of these preliminary results. Assessment Rate Pursuant to 19 CFR 351.212(b), the Department calculated an assessment rate for each importer of the subject merchandise. Upon issuance of the final PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 18805 results of this administrative review, if any importer-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent), the Department will issue appraisement instructions directly to CBP to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise. For assessment purposes, we calculated importer-specific assessment rates for the subject merchandise by aggregating the dumping margins for all U.S. sales to each importer and dividing the amount by the total entered value of the sales to that importer. Where appropriate, to calculate the entered value, we subtracted international movement expenses (e.g., international freight) from the gross sales value. The Department clarified its ‘‘automatic assessment’’ regulation on May 6, 2003 (68 FR 23954). This clarification will apply to entries of subject merchandise during the POR produced by companies included in these preliminary results of review for which the reviewed companies did not know their merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction. For a full discussion of this clarification, see Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). Cash Deposit Requirements To calculate the cash deposit rate for Wieland, we divided its total dumping margin by the total net value of its sales during the review period. The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of BSS from Germany entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for companies subject to this review will be the rate established in the final results of this review, except if the rate is less than 0.5 percent and, therefore, de minimis, no cash deposit will be required; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent final results for a review in which that manufacturer or exporter participated; (3) if the exporter is not a firm covered in this review, a prior review, or the original less-than-fairvalue (LTFV) investigation, but the manufacturer is, the cash deposit rate E:\FR\FM\13APN1.SGM 13APN1 18806 Federal Register / Vol. 75, No. 70 / Tuesday, April 13, 2010 / Notices will be the rate established for the most recent final results for the manufacturer of the merchandise; and (4) if neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will be 7.30 percent, the all-others rate established in the LTFV investigation. See Antidumping Duty Order: Brass Sheet and Strip from the Federal Republic of Germany, 52 FR 6997 (March 6, 1987), amended at 52 FR 35750 (September 23, 1987). These cash deposit requirements, when imposed, shall remain in effect until further notice. Notification to Importers This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary’s presumption that reimbursement of antidumping duties occurred and increase the subsequent assessment of the antidumping duties by the amount of antidumping duties reimbursed. These preliminary results of administrative review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4). Dated: April 7, 2010. Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration. [FR Doc. 2010–8419 Filed 4–12–10; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [C–475–819] sroberts on DSKD5P82C1PROD with NOTICES Certain Pasta From Italy: Preliminary Results of the 13th (2008) Countervailing Duty Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce. SUMMARY: The Department of Commerce (‘‘Department’’) is conducting an administrative review of the countervailing duty order on certain pasta from Italy for the period January 1, 2008, through December 31, 2008. We preliminarily find that Pastificio Lucio Garofalo S.p.A. (‘‘Garofalo’’) received countervailable subsidies and that F.lli De Cecco di Filippo Fara San Martino VerDate Nov<24>2008 17:33 Apr 12, 2010 Jkt 220001 S.p.A. (‘‘De Cecco Pastificio’’)/Molino e Pastificio De Cecco S.p.A. (‘‘De Cecco Pescara’’), members of the De Cecco group of companies, received de minimis countervailable subsidies. See the ‘‘Preliminary Results of Review’’ section, below. Interested parties are invited to comment on these preliminary results. See the ‘‘Public Comment’’ section of this notice. DATES: Effective Date: April 13, 2010. FOR FURTHER INFORMATION CONTACT: Andrew McAllister or Anna Flaaten, AD/CVD Operations, Office 1, Import Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482–1174 and (202) 482–5156, respectively. SUPPLEMENTARY INFORMATION: Background On July 24, 1996, the Department published a countervailing duty order on certain pasta (‘‘pasta’’ or ‘‘subject merchandise’’) from Italy. See Notice of Countervailing Duty Order and Amended Final Affirmative Countervailing Duty Determination: Certain Pasta From Italy, 61 FR 38544 (July 24, 1996). On July 1, 2009, the Department published a notice of ‘‘Opportunity to Request Administrative Review’’ of this countervailing duty order for calendar year 2008, the period of review (‘‘POR’’). See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 74 FR 31406 (July 1, 2009). On July 2, 2009, we received such a request from De Cecco Pastificio. On July 31, 2009, we received additional review requests from De Matteis Agroalimentare S.p.A. (‘‘De Matteis’’); Agritalia S.r.L. (‘‘Agritalia’’); F. Divella S.p.A. (‘‘Divella’’); and Garofalo. In accordance with 19 CFR 351.221(c)(1)(i), we published a notice of initiation of this review on August 25, 2009. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 74 FR 42873 (August 25, 2009). On October 9, 2009, the Department selected De Cecco Pastificio and Garofalo as mandatory respondents. See Memorandum to Susan H. Kuhbach, Senior Office Director, ‘‘Certain Pasta from Italy: Thirteenth Countervailing Duty Administrative Review— Respondent Selection,’’ dated October 9, 2009 which is on file in the Department’s Central Records Unit (‘‘CRU’’) in Room 1117 of the main Department building. On November 10, 2009, we issued countervailing duty questionnaires to PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 the Commission of the European Union (‘‘EU’’), the Government of Italy (‘‘GOI’’), De Cecco Pastificio and Garofalo. We received responses to our questionnaires in December 2009. We issued supplemental questionnaires to De Cecco Pastificio, Garofalo, and the GOI in January and March 2010, and we received responses to our supplemental questionnaires in February, March, and April 2010. As explained in the memorandum from the Deputy Assistant Secretary for Import Administration, the Department has exercised its discretion to toll deadlines for the duration of the closure of the Federal Government from February 5, through February 12, 2010. Thus, all deadlines in this segment of the proceeding have been extended by seven days. The revised deadline for the preliminary results of this review is now June 7, 2010. See Memorandum to the Record from Ronald Lorentzen, DAS for Import Administration, regarding ‘‘Tolling of Administrative Deadlines As a Result of the Government Closure During the Recent Snowstorm,’’ dated February 12, 2010. Period of Review The POR for which we are measuring subsidies is January 1, 2008, through December 31, 2008. Scope of the Order Imports covered by the order are shipments of certain non-egg dry pasta in packages of five pounds four ounces or less, whether or not enriched or fortified or containing milk or other optional ingredients such as chopped vegetables, vegetable purees, milk, gluten, diastasis, vitamins, coloring and flavorings, and up to two percent egg white. The pasta covered by the scope of the order is typically sold in the retail market, in fiberboard or cardboard cartons, or polyethylene or polypropylene bags of varying dimensions. Excluded from the scope of the order are refrigerated, frozen, or canned pastas, as well as all forms of egg pasta, with the exception of non-egg dry pasta containing up to two percent egg white. Also excluded are imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by the Instituto Mediterraneo Di Certificazione, Bioagricoop S.r.l., QC&I International Services, Ecocert Italila, Consorzio per il Controllo dei Prodotti Biologici, Associazione Italiana per l’Agricoltura Biologica, or Codex S.r.l. In addition, based on publicly available information, the Department has determined that, as of August 4, 2004, imports of organic pasta from Italy that are accompanied by E:\FR\FM\13APN1.SGM 13APN1

Agencies

[Federal Register Volume 75, Number 70 (Tuesday, April 13, 2010)]
[Notices]
[Pages 18801-18806]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-8419]



[[Page 18801]]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-428-602]


Brass Sheet and Strip From Germany: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, U.S. 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on brass sheet and 
strip (BSS) from Germany. For the period of review (POR) March 1, 2008, 
through February 28, 2009, we have preliminarily determined that U.S. 
sales have not been made below normal value (NV). If these preliminary 
results are adopted in our final results, we will instruct U.S. Customs 
and Border Protection (CBP) to assess antidumping duties on all 
appropriate entries of subject merchandise during the POR. Interested 
parties are invited to comment on these preliminary results.

DATES: Effective Date: April 13, 2010.

FOR FURTHER INFORMATION CONTACT: Dennis McClure or George McMahon, AD/
CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington DC 20230; telephone: (202) 482-
5973 or (202) 482-1167, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    The Department published in the Federal Register the antidumping 
duty order on BSS from Germany on March 6, 1987 (52 FR 6997), amended 
on September 23, 1987 (52 FR 35750).
    On May 5, 2008, the Department published a notice of opportunity to 
request an administrative review of this order for the POR. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity To Request Administrative Review, 74 FR 9077 
(March 2, 2009). On March 30, 2009, the Department received a timely 
request for an administrative review of this antidumping duty order 
from Wieland-Werke AG (Wieland). On April 27, 2009, we published a 
notice initiating an administrative review of the antidumping duty 
order on BSS from Germany covering one respondent, Wieland. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 74 FR 19042 (April 27, 
2009).
    On May 7, 2009, the Department issued an antidumping duty 
questionnaire to Wieland. We received Wieland's response to Section A 
of the Department's questionnaire on June 11, 2009 (Section AQR), 
Sections B-C on July 1, 2009 (Section B-C QR), and Section D on July 
21, 2009 (Section DQR). The Department received comments from the 
Petitioners \1\ regarding Wieland's questionnaire responses on June 25, 
2009, July 2, 2009, October 22, 2009, and February 4, 2010.
---------------------------------------------------------------------------

    \1\ The Petitioners include GBC Metals, LLC of Global Brass and 
Copper, Inc., doing business as Olin Brass, Heyco Metals, Inc., 
Luvata Buffalo, Inc., PMX Industries, Inc., and Revere Copper 
Products, Inc.
---------------------------------------------------------------------------

    After reviewing the Sections A through D responses from Wieland, 
the Department issued supplemental questionnaires to Wieland. The 
Department issued additional supplemental questions, after reviewing 
Wieland's supplemental questionnaire responses. On November 18, 2009, 
the Department issued an extension of the deadline for the preliminary 
results of this antidumping duty administrative review from December 1, 
2009, until March 31, 2010. See Brass Sheet and Strip from Germany: 
Notice of Extension of Time Limit for Preliminary Results of 
Administrative Review, 74 FR 59523 (November 18, 2009). As explained in 
the memorandum from the Deputy Assistant Secretary for Import 
Administration, the Department has exercised its discretion to toll 
deadlines for the duration of the closure of the Federal Government 
from February 5, through February 12, 2010. Thus, all deadlines in this 
segment of the proceeding have been extended by seven days. The revised 
deadline for the preliminary results of this antidumping duty 
administrative review is now April 7, 2010. See Memorandum to the 
Record from Ronald Lorentzen, DAS for Import Administration, regarding 
``Tolling of Administrative Deadlines As a Result of the Government 
Closure During the Recent Snowstorm,'' dated February 12, 2010.''
    In letters to the Department dated March 4, 2010, and March 12, 
2010, the Petitioners state that Wieland was the importer of record for 
the U.S. sale made during the POR and, therefore, Wieland is liable for 
any antidumping duties assessed. Pursuant to Wieland's role as the 
importer, the Petitioners allege that Wieland has put itself in a 
position to make payment or reimbursement of any antidumping duties 
related to its U.S. sale. As such, the Petitioners assert that the 
transaction in question is subject to a reduction in the export price, 
pursuant to 19 CFR 351.402(f).\2\ In a letter to the Department dated 
March 8, 2010, at page 6, Wieland rebuts the Petitioners' assertion 
that its single U.S. sale is subject to the aforementioned regulation, 
arguing that Wieland ``was both the exporter and importer and thus 
cannot reimburse itself.''
---------------------------------------------------------------------------

    \2\ 19 CFR 351.402(f) states: (f) Reimbursement of antidumping 
duties and countervailing duties--(1) In general. (i) In calculating 
the export price (or the constructed export price), the Secretary 
will deduct the amount of any AD duty or CVD duty which the exporter 
or producer: (A) Paid directly on behalf of the importer; or (B) 
Reimbursed to the importer.
---------------------------------------------------------------------------

    The Department has considered the facts of the instant review. 
Consistent with the Department's practice with respect to this issue, 
we do not find that Wieland's sale to the United States during the POR 
is subject to 19 CFR 351.402(f). Our decision as to reimbursement is 
based upon our interpretation of this regulation, which is that two 
separate corporate entities must exist to invoke the reimbursement 
regulation. See Circular Welded Non-Alloy Steel Pipe and Tube From 
Mexico: Final Results of Antidumping Duty Administrative Review, 63 FR 
33041, 33044 (June 17, 1998). In this instance, though it is both an 
exporter and importer, there is still only one corporate entity, 
Wieland, not two.

Scope of the Order

    The scope of this order covers shipments of brass sheet and strip, 
other than leaded and tinned, from Germany. The chemical composition of 
the covered products is currently defined in the Copper Development 
Association (C.D.A.) 200 Series or the Unified Numbering System 
(U.N.S.) C2000; this review does not cover products the chemical 
compositions of which are defined by other C.D.A. or U.N.S. series. In 
physical dimensions, the products covered by this review have a solid 
rectangular cross section over 0.006 inches (0.15 millimeters) through 
0.188 inches (4.8 millimeters) in finished thickness or gauge, 
regardless of width. Coiled, wound-on-reels (traverse wound), and cut-
to-length products are included. The merchandise is currently 
classified under Harmonized Tariff Schedule of the United States 
(HTSUS) item numbers 7409.21.00 and 7409.29.00. Although the HTSUS item 
numbers are provided for convenience and customs purposes, the 
Department's written description of the scope of this order remains 
dispositive.

Period of Review

    The period of review is March 1, 2008, through February 28, 2009.

[[Page 18802]]

Verification

    As provided in section 782(i) of the Tariff Act of 1930, as amended 
(the Act), we intend to verify the information relied upon prior to the 
final results of the instant review. Our verification results will be 
outlined in the public version of our verification report, which will 
be on file in the Department's Central Records Unit (CRU), Room 1117 of 
the Main Commerce Building.

Analysis

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent that are covered by the description 
contained in the ``Scope of the Order'' section above and were sold in 
the home market during the POR, to be the foreign like product for 
purposes of determining appropriate product comparisons to U.S. sales. 
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 most similar 
foreign like product on the basis of the characteristics listed in 
Appendix V of the initial antidumping questionnaire we provided to 
Wieland.\3\ When there were no appropriate comparison market sales of 
comparable merchandise, we compared the merchandise sold in the United 
States to constructed value (CV), in accordance with section 773(a)(4) 
of the Act.
---------------------------------------------------------------------------

    \3\ See the Department's Antidumping Duty Questionnaire issued 
to Wieland, dated May 7, 2009, on the record in the CRU.
---------------------------------------------------------------------------

    For purposes of the preliminary results, where appropriate, we have 
calculated the adjustment for differences in merchandise based on the 
difference in the variable cost of manufacturing (VCOM) between each 
U.S. model and the most similar home market model selected for 
comparison.

Normal Value Comparisons

    To determine whether sales of subject merchandise to the United 
States were made at less than NV, we compared the export price (EP) to 
the NV, as described in the ``Export Price'' and ``Normal Value'' 
sections of this notice. During the POR, Wieland had only one shipment 
of BSS to the United States.
    In accordance with section 777A(d)(2) of the Act, we calculated 
monthly weighted-average prices for NV and compared these to the 
individual U.S. transaction price. In order to lessen the potential 
distortion to sales prices which result from significantly changing 
costs, we are using a quarterly costing approach; we have not made 
price-to-price comparisons outside of a quarter. See below and 
Memorandum through James Terpstra from Dennis McClure, titled ``Sales 
Analysis Memorandum--Wieland-Werke AG (Sales Analysis Memo--Wieland),'' 
dated April 7, 2010, and available in the CRU.

Export Price

    For the price to the United States, we used EP, in accordance with 
section 772(a) of the Act. We calculated EP when the merchandise was 
sold by the producer or exporter outside of the United States directly 
to the first unaffiliated purchaser in the United States prior to 
importation. We based EP on the reported delivery term to the first 
unaffiliated customer in, or for exportation to, the United States.
    In accordance with section 772(c)(2) of the Act, we made 
deductions, where appropriate, for movement expenses including inland 
freight from plant or warehouse to port of exportation, foreign 
brokerage, handling and loading charges, international freight, 
insurance, U.S. inland freight expenses, other transportation expenses 
for cargo scanning and port charges, and U.S. duties. See Sales 
Analysis Memo--Wieland.
    As stated at 19 CFR 351.401(i), the Department will use the 
respondent's invoice date as the date of sale unless another date 
better reflects the date upon which the exporter or producer 
establishes the essential terms of sale. Wieland reported the order 
confirmation date as the date of sale for the U.S. market and the 
earlier of fabrication order confirmation date, shipment date, or 
invoice date as the sale date in the home market, claiming that these 
dates reflect the date on which the material terms of sale were 
finalized. See Section B-C QR at B-12-B-13 and C-7.
    We have examined the information on the record and preliminarily 
find that the invoice date better reflects the date upon which the 
producer established its material terms of sale in both the U.S. and 
home markets. Specifically, Wieland reported that its ``written general 
terms of delivery, applicable to both domestic and export sales, 
provide that Wieland is entitled to make excess or short deliveries up 
to 10 percent of the agreed weights or units. However, Wieland has 
unwritten understandings/established practices with certain customers 
allowing for greater variations without prior approval.'' See Wieland's 
Section A-C Supplemental Questionnaire Response (Section A-C SQR), 
dated September 29, 2010, at SAC-29. Thus, Wieland has reported sales 
transactions, in both the U.S. and home markets, in which the quantity 
exceeds its standard tolerance, and the basis for such increases can 
only be supported by ``unwritten understandings/established 
practices.'' Based on the fact that there is no written contract or 
sales agreement documenting agreement to the change in terms, the 
Department finds that the invoice date represents the date in which the 
material terms of sale are finalized.\4\ Because the data specific to 
the date of sale discussion are proprietary in nature, see the 
Department's sales calculation memorandum from Dennis McClure through 
James Terpstra to the File titled, ``Sales Analysis Memo--Wieland'' for 
additional details.
---------------------------------------------------------------------------

    \4\ See Notice of Final Determination of Sales at Less Than Fair 
Value: Citric Acid and Certain Citrate Salts from Canada, 74 FR 
16843 (April 13, 2009), and accompanying Issues and Decision 
Memorandum at Comment 1.
---------------------------------------------------------------------------

Normal Value

A. Home Market Viability

    In accordance with section 773(a)(1)(C) 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 NV, we compared Wieland's 
volume of home market sales of the foreign like product to the volume 
of U.S. sales of the subject merchandise. Pursuant to section 
773(a)(1)(B) of the Act and 19 CFR 351.404(b), because Wieland's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales of the 
subject merchandise, we determined that the home market was viable.
Arm's-Length Test
    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, 
direct selling expenses, discounts, and packing. In accordance with the 
Department's practice, if the prices charged to an affiliated party 
were, on average, between 98 and 102 percent of the prices charged to 
unaffiliated parties for merchandise identical or most similar to that 
sold to the affiliated party, we consider the sales to be at arm's-
length prices. See 19 CFR 351.403(c); see also Certain Corrosion-
Resistant Carbon Steel Flat Products from the Republic of Korea: Notice 
of Preliminary Results of the Antidumping Duty Administrative Review, 
74 FR

[[Page 18803]]

46110, 46112 (September 8, 2009); unchanged in the final, see Certain 
Corrosion-Resistant Carbon Steel Flat Products from the Republic of 
Korea: Notice of Final Results of the Fifteenth Administrative Review, 
75 FR 13490 (March 22, 2010). Conversely, where the affiliated party 
did not pass the arm's-length test, all sales to that affiliated party 
have been excluded from the NV calculation. See Antidumping 
Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 
FR 69186 (November 15, 2002). For the arm's-length test, we matched 
only affiliated sales to unaffiliated sales within the same quarter in 
which the sale occurred, because we are using a quarterly costing 
approach, to lessen the potential distortion to sales prices which 
result from significantly changing costs.

B. Cost Reporting Period

    The Department's normal practice is to calculate an annual 
weighted-average cost for the entire POR. See, e.g., Certain Pasta from 
Italy: Final Results of Antidumping Duty Administrative Review, 65 FR 
77852 (December 13, 2000) (Pasta from Italy), and accompanying Issues 
and Decision Memorandum at Comment 18 and Notice of Final Results of 
Antidumping Duty Administrative Review of Carbon and Certain Alloy 
Steel Wire Rod from Canada, 71 FR 3822 (January 24, 2006) (Wire Rod 
from Canada), and accompanying Issues and Decision Memorandum at 
Comment 5 (explaining the Department's practice of computing a single 
weighted-average cost for the entire period). This methodology is 
predictable and generally applicable in all proceedings. However, the 
Department recognizes that possible distortions may result when our 
annual average cost method is used during a period of significant cost 
changes.
    In these circumstances, in determining whether to deviate from our 
normal methodology, the Department has evaluated the case-specific 
record evidence using two primary factors: (1) the change in the cost 
of manufacturing (COM) recognized by the respondent during the POR must 
be deemed significant; and, (2) the record evidence must show that 
sales during the shorter averaging periods could be reasonably linked 
with the cost of production (COP) or CV during the same shorter 
averaging periods. See, e.g., Stainless Steel Plate in Coils From 
Belgium: Final Results of Administrative Review, 73 FR 75398, 75399 
(December 11, 2008) (SSPC from Belgium) and Stainless Steel Sheet and 
Strip in Coils from Mexico: Final Results of Administrative Review, 74 
FR 6365 (February 9, 2009) (2006-2007 Final Results).
a. Significance of Cost Changes
    Record evidence indicates that Wieland experienced significant 
changes in the total COM during the POR and that the change in COM is 
primarily attributable to the price volatility for copper and zinc, 
major inputs consumed in the production of the merchandise under 
consideration. The record indicates that copper and zinc prices have 
decreased dramatically throughout the POR. Specifically, the record 
data show that the percentage difference between the high and low 
quarterly costs for brass products exceeded 25 percent during the POR. 
As a result, we have determined for the preliminary results that the 
changes in COM for Wieland are significant.
 b. Linkage Between Cost and Sales Information
    If the Department finds cost changes to be significant in a given 
administrative review or investigation, the Department subsequently 
evaluates whether there is evidence of linkage between the cost changes 
and the sales prices for the given POI/POR. Our definition of linkage 
does not require direct traceability between specific sales and their 
specific production cost, but rather relies on whether there are 
elements which would indicate a reasonable correlation between the 
underlying costs and the final sales prices levied by the company. 
These correlative elements may be measured and defined in a number of 
ways depending on the associated industry, and the overall production 
and sales processes.
    In the instant case, Wieland's sales process is effectively the 
sale of two separate products: commodity metal (i.e., copper and zinc) 
and fabrication. For metal, which represents a significant part of the 
total price, customers are charged a price that is determined, for the 
most part, on the London Metal Exchange (LME) metal price on the date 
of the customer's choosing (the ``metal fixation date'').
    We find that, because both the metal costs and prices charged for 
the metal are reasonably linked to the market prices promulgated by the 
LME, there is a reasonable link between the underlying costs and sales 
prices.
    In light of the two factors discussed above, we have preliminarily 
determined that a quarterly costing approach with respect to Wieland 
would lead to more accurate comparisons in our antidumping duty 
calculations. Thus, we used quarterly indexed annual average direct 
material costs and annual weighted-average fabrication costs in the COP 
and CV calculations.

C. Cost of Production Analysis

    Because we found that Wieland did not act to the best of its 
ability in providing information to the Department in the most recently 
completed administrative review in which it participated, we applied 
total adverse facts available which included a finding on that basis 
that Wieland's sales were made below cost. Therefore, the Department 
disregarded sales below the COP in the last completed review in which 
Wieland participated.\5\
---------------------------------------------------------------------------

    \5\ See Final Results of Antidumping Duty Administrative Review: 
Brass Sheet and Strip from Germany, 64 FR 43342 (August 10, 1999).
---------------------------------------------------------------------------

    Therefore, the Department finds reasonable grounds to believe or 
suspect, pursuant to section 773(b)(2)(A)(ii) of the Act, that sales of 
the foreign like product under consideration for the determination of 
NV in this review may have been made at prices below COP. Thus, 
pursuant to section 773(b)(1) of the Act, we examined whether sales 
from Wieland in the home market were made at prices below the COP.
    We compared sales of the foreign like product in the home market 
with model-specific COP figures. In accordance with section 773(b)(3) 
of the Act, we calculated COP based on the sum of the costs of 
materials and fabrication employed in producing the foreign like 
product, plus selling, general and administrative (SG&A) expenses, 
financial expenses and all costs and expenses incidental to placing the 
foreign like product in packed condition and ready for shipment.
    In our sales-below-cost analysis, we relied on home market sales 
and COP information provided by Wieland in its questionnaire responses, 
except where noted below.
    As discussed above, we used quarterly indexed annual average direct 
material costs and annual weighted-average conversion costs in the COP 
and CV calculations. See Sales Analysis Memo--Wieland and Memorandum 
from Ernest Gziryan to Neal Halper ``Cost of Production and Constructed 
Value Calculation Adjustments for the Preliminary Results--Wieland-
Werke AG (Wieland),'' dated April 7, 2010 (Wieland Cost Calculation 
Memo--Wieland).

Volatility in Raw Materials

    Wieland explains that it offers three types of sales: single date 
(release)

[[Page 18804]]

pricing, split date pricing, and tolling. See Section AQR at 34-35. In 
its Section AQR, Wieland asserts that the volatility in daily commodity 
metal prices experienced during the POR poses unique issues that the 
Department's traditional antidumping methodology does not adequately 
account for. For example, Wieland states that in the case of split 
pricing sales in the home market, a U.S. sale with a metal fixation 
date occuring on one date would be compared with home market sales in 
which that metal fixation date falls, not only on a different date, but 
also in completely different months (since metal fixation can occur 
both before and after the fabrication order confirmation date). Wieland 
states that customers in the United States and Germany that purchased 
metal with the same metal fixation date will pay the same price for the 
LME metal price component of their metal purchase. However, Wieland 
asserts that if the price comparison is made such that sales with 
different metal fixation dates are compared, margins will be 
artificially created or masked simply because LME metal prices 
fluctuate.
    Wieland asserts that, because the LME metal price is a full pass 
through to the customer, and is treated as such by Wieland both in its 
sales and cost accounting, the Department should make a circumstance of 
sale (COS) adjustment which adjusts for the price difference resulting 
from differences in metal fixation dates between U.S. and home market 
sales. More specifically, Wieland proposes that the Department adjust 
all U.S. and Home Market sales prices by the LME metal price for the 
alloy on the metal fixation date associated with the specific sale. In 
its letter dated June 25, 2009, at 14, the Petitioners state that the 
Department has never, to the best of its knowledge, adjusted metal 
pricing components as a circumstance of sale. The Petitioners state 
that if Wieland believes that changes in the prices of copper and zinc 
during the POR were (1) Very significant, (2) related to long-term 
changes and (3) that in and of themselves, (i.e., apart from other cost 
factors), unduly changed total production costs, then the proper 
methodological remedy might be a potential change in the temporal 
structure of the cost of production. Id.
    The Department does not find that a COS adjustment is warranted in 
the instant review, because it is the Department's practice to limit 
such adjustments to direct selling expenses. However, the Department 
preliminarily finds that, based on the sales pricing structure reported 
by Wieland and the volatility experienced in commodity metal prices in 
this particular POR, the date of sale methodology and transaction-to-
average price comparisons may not adequately account for the volatility 
in metal prices which occurred during the POR. Therefore, for these 
preliminary results, we are accounting for the volatility in commodity 
metal prices by ensuring that the home market sales selected for 
comparison purposes will first be matched based on the invoice date as 
the date of sale, and secondly, will have a metal fixation date in the 
same month as the metal fixation date of the U.S. sale. Absent a metal 
fixation date in the same month, we will make comparisons based on the 
same quarter of the POR as the metal fixation date reported for 
Wieland's U.S. sale. Absent such a match, we will use CV as the basis 
for comparison to Wieland's U.S. sale. We find that by limiting the 
comparisons to sales made within the same quarter of the POR and the 
same month for the metal fixation date, we reasonably account for the 
volatility experienced by Wieland during the POR associated with its 
split date pricing structure, thereby, preventing potential distortions 
in the Department's transaction-to-average price comparison 
methodology.
1. Calculation of COP
    Before making any comparisons to NV, we conducted a quarterly COP 
analysis of Wieland pursuant to section 773(b) of the Act to determine 
whether Wieland comparison market sales were made at prices below the 
COP. We calculated the COP based on the sum of the cost of materials 
and fabrication for the foreign like product, plus amounts for SG&A 
expenses and packing, in accordance with section 773(b)(3) of the Act.
2. Test of Comparison Market Prices
    As required under section 773(b)(2) of the Act, we compared the 
quarterly weighted-average COP to the per-unit price of the comparison 
market sales of the foreign like product based on the metal fixation 
date to determine whether these sales had been made at prices below the 
COP within an extended period of time in substantial quantities, and 
whether such prices were sufficient to permit the recovery of all costs 
within a reasonable period of time. We determined the net comparison 
market prices for the below-cost test by subtracting from the gross 
unit price any applicable movement charges, discounts, rebates, direct 
and indirect selling expenses (also subtracted from the COP), and 
packing expenses. See Sales Analysis Memo--Wieland.
3. Results of COP Test
    Where less than 20 percent of the respondent's home market sales of 
a given model were at prices below the COP, we did not disregard any 
below-cost sales of that model because we determined that the below-
cost sales were not made within an extended period of time and in 
``substantial quantities.'' Where 20 percent or more of the 
respondent's home market sales of a given model were at prices less 
than the COP, we disregarded the below-cost sales because: (1) they 
were made within an extended period of time in ``substantial 
quantities,'' in accordance with sections 773(b)(2)(B) and (C) of the 
Act; and (2) based on our comparison of prices to the indexed POR 
weighted-average COPs, they were at prices which would not permit the 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(2)(D) of the Act.
    Therefore, for Wieland, we disregarded below-cost sales of a given 
product of 20 percent or more and used the remaining sales as the basis 
for determining NV, in accordance with section 773(b)(1) of the Act. 
See Sales Analysis Memo--Wieland.

D. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on the reported delivery terms to comparison 
market customers. We made deductions from the starting price, when 
appropriate, for handling, loading, inland freight, warehousing, inland 
insurance, discounts, and rebates. In accordance with sections 
773(a)(6)(A) and (B) of the Act, we added U.S. packing costs and 
deducted comparison market packing, respectively. In addition, we made 
circumstance-of-sale adjustments for direct expenses, including imputed 
credit expenses, in accordance with section 773(a)(6)(C)(iii) of the 
Act. Where appropriate, we added other revenue and applied billing 
adjustments to the gross unit price.
    When comparing U.S. sales with comparison market sales of similar, 
but not identical, merchandise, we also made adjustments for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We based this 
adjustment on the difference in the variable cost of manufacture (VCOM) 
for the foreign like product and subject merchandise, using weighted-
average costs.

[[Page 18805]]

E. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (LOT) as the EP or CEP. Sales are made at different 
LOTs if they are made at different marketing stages (or their 
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in 
selling activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 
(November 19, 1997) (Plate from South Africa). Consistent with 19 CFR 
351.412, to determine whether comparison market sales were at a 
different LOT than the U.S. sales, we examined stages in the marketing 
process and selling functions along the chain of distribution between 
the producer and the unaffiliated (or arm's-length) customers, 
including selling functions, class of customer (customer category), and 
the level of selling expenses for each type of sale. If the comparison 
market sales were at a different LOT and the differences affect 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 will make an LOT 
adjustment under section 773(a)(7)(A) of the Act.
    Wieland reported that its U.S. sale and home market sales were made 
at the same LOT. Wieland has two channels of distribution for U.S. 
sales: (1) manufacture to order and ship directly to customer, and (2) 
sales through Wieland Metals, Inc. The one sale occurring during the 
POR was made through channel (1) to an end-user. Wieland reported that 
during the POR, it sold subject merchandise through one channel of 
distribution in both the U.S. and home market, which is direct to the 
customer, to one customer category in the United States and three 
customer categories in the home market, consisting of OEM/end users, 
broker/distributors, and service center/slitting center.
    Our analysis of the selling activities for Wieland shows that there 
is overlap in these activities for channels of distribution and 
customer categories. Wieland performs similar selling activities for 
all customer categories and channels of distribution. Wieland reports 
that its sales functions are basic services provided for all sales. For 
example, every sale involves packing, order processing, the 
salesperson's time, and logistics support. Furthermore, Wieland states 
that its selling functions do not vary by type of customer. See Section 
AQR at Section A-C SQR at SAC-7.
    In the U.S. market, Wieland reported that its sale was made through 
one channel of distribution to one customer category, and therefore, at 
one LOT. The Department has determined that Wieland's home market sales 
were made at one LOT and at the same stage of marketing as the U.S. 
sales LOT. Therefore, the Department will not make an LOT adjustment 
for Wieland's sale to the United States.

Currency Conversion

    For purposes of these preliminary results, we made currency 
conversions in accordance with section 773A(a) of the Act, based on the 
official exchange rates published by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following weighted-average percentage margin exists for the period 
March 1, 2008, through February 28, 2009, for Wieland:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Wieland-Werke AG...........................................         0.00
------------------------------------------------------------------------

    The Department will disclose the calculations performed for these 
preliminary results within five days of the date of publication of this 
notice to the parties of this proceeding, in accordance with 19 CFR 
351.224(b). An interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). 
Pursuant to section 782(i) of the Act, the Department intends to verify 
the information upon which we will rely in making our final 
determination. As a result, we intend to establish the briefing 
schedule upon the completion of verification.
    Pursuant to section 751(3)(A) of the Act and 19 CFR 351.213(h), the 
Department intends to issue the final results of this administrative 
review, which will include the results of its analysis of issues raised 
in any such comments, or at a hearing, if requested, within 120 days of 
publication of these preliminary results.

Assessment Rate

    Pursuant to 19 CFR 351.212(b), the Department calculated an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this administrative review, if any 
importer-specific assessment rates calculated in the final results are 
above de minimis (i.e., at or above 0.5 percent), the Department will 
issue appraisement instructions directly to CBP to assess antidumping 
duties on appropriate entries by applying the assessment rate to the 
entered value of the merchandise. For assessment purposes, we 
calculated importer-specific assessment rates for the subject 
merchandise by aggregating the dumping margins for all U.S. sales to 
each importer and dividing the amount by the total entered value of the 
sales to that importer. Where appropriate, to calculate the entered 
value, we subtracted international movement expenses (e.g., 
international freight) from the gross sales value.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification will apply to entries of 
subject merchandise during the POR produced by companies included in 
these preliminary results of review for which the reviewed companies 
did not know their merchandise was destined for the United States. In 
such instances, we will instruct CBP to liquidate unreviewed entries at 
the all-others rate if there is no rate for the intermediate 
company(ies) involved in the transaction. For a full discussion of this 
clarification, see Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

Cash Deposit Requirements

    To calculate the cash deposit rate for Wieland, we divided its 
total dumping margin by the total net value of its sales during the 
review period. The following deposit rates will be effective upon 
publication of the final results of this administrative review for all 
shipments of BSS from Germany entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided by section 
751(a)(2)(C) of the Act: (1) The cash deposit rate for companies 
subject to this review will be the rate established in the final 
results of this review, except if the rate is less than 0.5 percent 
and, therefore, de minimis, no cash deposit will be required; (2) for 
previously reviewed or investigated companies not listed above, the 
cash deposit rate will continue to be the company-specific rate 
published for the most recent final results for a review in which that 
manufacturer or exporter participated; (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

[[Page 18806]]

will be the rate established for the most recent final results for the 
manufacturer of the merchandise; and (4) if neither the exporter nor 
the manufacturer is a firm covered in this or any previous review 
conducted by the Department, the cash deposit rate will be 7.30 
percent, the all-others rate established in the LTFV investigation. See 
Antidumping Duty Order: Brass Sheet and Strip from the Federal Republic 
of Germany, 52 FR 6997 (March 6, 1987), amended at 52 FR 35750 
(September 23, 1987). These cash deposit requirements, when imposed, 
shall remain in effect until further notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and increase the 
subsequent assessment of the antidumping duties by the amount of 
antidumping duties reimbursed.
    These preliminary results of administrative review are issued and 
published in accordance with sections 751(a)(1) and 777(i)(1) of the 
Act and 19 CFR 351.221(b)(4).

     Dated: April 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-8419 Filed 4-12-10; 8:45 am]
BILLING CODE 3510-DS-P