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Code · REGISTER · 2005-04-06 · Import Administration, International Trade Administration, Department of Commerce · Notices

Notices. Notice of public meeting

13,811 words·~63 min read·/register/2005/04/06/05-6779·

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BILLING CODE 3410-11-M DEPARTMENT OF COMMERCE International Trade Administration A-351-828 Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil; Preliminary Results of Antidumping Duty Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce. SUMMARY: In response to a request from Companhia Siderúrgica Nacional (CSN), the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain hot-rolled flat-rolled carbon quality steel products from Brazil (A-351-828).
This administrative review covers imports of subject merchandise produced and exported by CSN. The period of review
(POR)is March 1, 2003, through February 29, 2004. We preliminarily find that during the POR, CSN did not make sales of the subject merchandise at less than normal value (NV). However, since the subject merchandise was further manufactured in the United States by CSN LLC, and affiliated party, and sold to an unaffiliated U.S. customer as a galvanized product outside the scope of the antidumping order, we intend to verify the further manufacturing costs and sales information reported by CSN LLC for the final results. The briefing schedule will be extended accordingly. If these preliminary results are adopted in the final results of this administrative review, we will instruct U.S. Customs and Border Protection
(CBP)to liquidate appropriate entries without regard to antidumping duties. Interested parties are invited to comment on these preliminary results, including the Department's analysis regarding the date of sale. Parties who submit argument in this proceeding are requested to submit with the argument: 1) a statement of the issues, 2) a brief summary of the argument, and 3) a table of authorities. EFFECTIVE DATE: April 6, 2005. FOR FURTHER INFORMATION CONTACT: Helen Kramer or Kristin Najdi, AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230, telephone:
(202)482-0405 or
(202)482-8221, respectively. SUPPLEMENTARY INFORMATION: Background On March 12, 2002, the Department published the antidumping duty order on certain hot-rolled flat-rolled carbon quality steel products from Brazil. *See Antidumping Duty Order: Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil* , 67 FR 11093 (March 12, 2002) (“AD Order”). On March 1, 2004, the Department published the opportunity to request administrative review of, *inter alia* , certain hot-rolled flat-rolled carbon quality steel products from Brazil for the period March 1, 2003, through February 29, 2004. *See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review* , 69 FR 9584 (March 1, 2004). In accordance with 19 CFR 351.213(b)(2), on March 31, 2004, CSN requested that we conduct an administrative review of its sales of the subject merchandise. On April 28, 2004, the Department published in the **Federal Register** a notice of initiation of this antidumping duty administrative review covering the period March 1, 2003, through February 29, 2004. *See Initiation of Antidumping and Countervailing Duty Administrative Reviews* , 69 FR 23170 (April 28, 2004). On May 10, 2004, the Department issued its antidumping duty questionnaire to CSN. On May 24, 2004, CSN requested that the Department agree to a limited home market reporting period, because the review in question only involved a single sale. Therefore, instead of providing the Department with home market sales throughout the POR, CSN proposed reporting home market sales made during the same six month “window” period as the U.S. sale, namely, November 2003, through April 2004. In the same letter, CSN also informed the Department that it intended to prepare a section D response to reflect costs of production during the 2003 fiscal year, not the POR. CSN explained that the subject merchandise sold to the U.S. market was all further-processed and sold as non-subject merchandise in the United States by its U.S. affiliate, CSN LLC, before delivery to the unaffiliated customer, and requested that it be allowed to limit its reporting of U.S. production costs to the actual month of production, instead of relying on the production experience for the entire twelve-month POR. Finally, CSN requested that the Department allow CSN to report its sales to its home market affiliate, Indútria Nacional de Aços Laminados INAL S.A. (INAL), instead of downstream sales of further manufactured merchandise, due to complexities of calculating further manufacturing costs for all of INAL's sales of further manufactured hot-rolled steel. CSN stated that the Department could then decide whether to use these sales in its analysis based on whether CSN's sales to INAL pass the arm's length test. On June 4, 2004, the Department responded to CSN's requests by 1) agreeing to limit the reporting period for home market sales to the six-month window of the U.S. sale; 2) rejecting CSN's request to report costs for the 2003 fiscal year; 3) rejecting CSN's request to limit its period for reporting further manufacturing costs to one month; and 4) allowing CSN to report its home market sales to INAL instead of downstream sales, if these pass the arm's length test. CSN submitted its response to section A of the Department's questionnaire on June 15, 2004, and its responses to sections B and C on July 6, 2004. On July 30, 2004, United States Steel Corporation, a petitioner, submitted comments challenging the validity of this review. The petitioner specifically questioned whether the subject merchandise exported to the United States was actually manufactured by CSN, alleging that another Brazilian company was the manufacturer of the imports in question. The Department issued a supplemental section A, B, and C questionnaire on August 10, 2004, in which it informed CSN that its sales to INAL had failed the arm's length test and that it was required to report INAL's downstream sales. CSN filed its response on August 31, 2004, and submitted a revised sales listing on September 7, 2004, that included INAL's sales to unaffiliated parties. The Department received the sales reconciliation package from CSN on October 12, 2004, and on October 15, 2004, it issued its outline and agenda for the sales verification. During the most recently completed segment of the proceeding in which CSN participated, the antidumping administrative review of the suspension agreement, the Department found and disregarded sales that failed the cost test. *See Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil: Preliminary Results of Antidumping Duty Administrative Review of Suspension Agreement* , 66 FR 41500 (August 8, 2001) (“ *Suspension Agreement* ”). Pursuant to section 773(b)(2)(A)(ii) of the Tariff Act of 1930, as amended (the Act), we had reasonable grounds to believe or suspect that sales by this company of the foreign like product under consideration for the determination of NV in this review were made at prices below the cost of production (COP). Therefore, we instructed CSN to also complete sections D and E of the Department's initial questionnaire, issued May 10, 2004. CSN submitted its responses to these sections on July 14, 2004. Import Administration's Office of Accounting issued a supplemental questionnaire regarding CSN's responses to sections D and E on October 26, 2004 and on November 24, 2004, CSN submitted its supplemental response. On October 18, 2004, Nucor Corporation (Nucor), a domestic interested party, requested that the Department rescind the instant review. Nucor alleged that the date of the only reported POR sale by CSN fell outside of the POR, thus invalidating this entire segment of the proceeding. Because it was not practicable to complete the preliminary results of this review within the normal time frame, we fully extended the time limit for this review until March 31, 2005. *See Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review: Certain Hot-Rolled Carbon Steel Flat Products from Brazil* , 69 FR 60142 (October 7, 2004). Verification As provided in section 782(i) of the Act, we verified the sales and cost information provided by CSN for use in our preliminary results using standard verification procedures, including on-site inspection of the manufacturer's facilities and the examination of relevant sales and financial records. We verified CSN's sales responses from October 25, 2004, through October 29, 2004, and cost responses from February 21, 2005, through February 25, 2005, at CSN's Presidente Vargas plant in Volta Redonda, Brazil. The results of these verifications are found in the sales verification report dated January 6, 2005, and the cost verification report dated March 31, 2005, on file in the Central Records Unit
(CRU)of the Department in room B-099 of the main Department of Commerce Building, 14th Street and Constitution Avenue, NW, Washington, DC. *See* Memorandum to the File, Through Abdelali Elouaradia, Program Manager, From Helen M. Kramer and Kristin A. Najdi, Case Analysts: Verification of Home Market and U.S. Sales Information Submitted by Companhia Siderúrgica Nacional in the Administrative Review of Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil for the Period March 1, 2003, through February 29, 2004, dated January 6, 2005, (Sales Verification Report); and Memorandum to Neal M. Halper, Director, Office of Accounting, Through Theresa Caherty, Program Manager, From Trinette Ruffin, Accountant: Verification Report on the Cost of Production and Constructed Value Data Submitted by Companhia Siderúrgica Nacional, dated March 31, 2005 (Cost Verification Report). We intend to verify at CSN LLC's plant in Terre Haute, Indiana, all information pertaining to the U.S. sales and further manufacturing costs incurred in the United States. Period of Review The POR is March 1, 2003, through February 29, 2004. Scope of the Order For purposes of this order, the products covered are certain hot-rolled flat-rolled carbon-quality steel products, meeting the physical parameters described below, regardless of application. The hot-rolled flat-rolled carbon-quality steel products subject to this review are of a rectangular shape, of a width of 0.5 inch of greater, neither clad, plated, nor coated with metal and whether or not painted, varnished, or coated with plastics of other non-metallic substances, in coils (whether or not in successively superimposed layers) regardless of thickness, and in straight lengths, of a thickness less than 4.75 mm and of a width measuring at least 10 times the thickness. Specifically included in this scope are vacuum degassed, fully stabilized
(IF)steels, high strength low alloy
(HSLA)steels, and the substrate for motor lamination steels. Steel products to be included in the scope of this agreement, regardless of HTSUS definitions, are products in which:
(1)iron predominates, by weight, over each of the other contained elements;
(2)the carbon content is 2 percent of less, by weight; and
(3)none of the elements listed below exceeds certain specified quantities. The merchandise subject to the order is currently classifiable under subheadings 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 7208.90.00.00, 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 7211.19.75.60, 7211.19.75.90, 7212.40.10.00, 7212.40.50.00, and 7212.50.00.00 of the Harmonized Tariff Schedule of the United States (HTSUS). Certain hot-rolled flat-rolled carbon-quality steel covered by this agreement, including vacuum degassed and fully stabilized, high strength low alloy, and the substrate for motor lamination steel may also enter under tariff numbers 7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Although the HTSUS subheadings are provided for convenience and CBP purposes, the written description of the scope of the order is dispositive. Fair Value Comparisons To determine whether CSN made sales of hot-rolled flat-rolled carbon quality steel to the United States at less than fair value, we compared the constructed export price
(CEP)to the NV, as described in the “Constructed Export Price” and “Normal Value” sections of this notice, below. In accordance with section 777A(d)(2) of the Act, we compared the CEP of the single U.S. transaction falling within the period of review to monthly weighted-average NVs. Product Comparisons In accordance with section 771(16) of the Act, we considered all products produced by CSN covered by the descriptions in the “Scope of the Order” section of this notice to be foreign like products for the purpose of determining appropriate product comparisons to CSN's U.S. sale of the subject merchandise. We have relied on the following eleven criteria to match U.S. sales of the subject merchandise to sales in Brazil of the foreign like product: whether or not painted, quality, carbon content, yield strength, nominal thickness, width, cut-to-length or coil, whether or not temper rolled, whether or not pickled, edge trim, and whether or not containing patterns in relief. In order to make a valid comparison between the two markets, we converted the quantity sold in the United States from pounds
(lb)to metric tons (MT), and changed prices from a “per lb” basis to a “per MT” basis. Since there were sales of identical merchandise in the home market in the same month as the date of the U.S. sale, we did not have to compare the U.S. sale to the next most similar foreign like product on the basis of the characteristics and reporting instructions listed in the Department's May 10, 2004 questionnaire. Date of Sale CSN requested this review on the basis of the date of its entry of subject merchandise and the date of the unaffiliated U.S. customer's purchase order within the POR. On October 18, 2004, Nucor alleged that the purchase order did not establish the material terms of sale because the amount of a surcharge imposed by CSN LLC on the further manufactured merchandise was not known until the month of shipment. Nucor argued that, since shipment occurred after the POR, the final price to the U.S. customer was not determined until after the end of the POR, and thus there was no sale for the Department to review. As such, they assert that we should rescind the review. We agree in part with Nucor. As CSN explains, the imposition of surcharges was a practice that developed on an industry-wide basis in the United States during 2004, mainly in response to the rapidly rising cost of steel scrap, which increased production costs for non-integrated manufacturers of steel. *See* CSN's January 31, 2005, submission, “Certain Hot-Rolled Carbon Steel Flat Products from Brazil: CSN Response to the January 18, 2005 Supplemental Questionnaire,” on file in the CRU. Although the CSN LLC policy of adding a surcharge to sales made during this period was made known to CSN LLC's customers in periodic bulletins announcing the effective date of new surcharges, the monthly surcharges were not explicitly linked to a predictable or market formula, and on the date of its purchase order, the customer could not anticipate the final amount due. Because CSN LLC did not conclusively set the actual price on the sales until the date of the invoice, the material terms of sale were established on the invoice date, and not the date of the original purchase order. This determination is consistent with 19 CFR 351.401(i) and the decision of the U. S. Court of International Trade in *Allied Tube and Conduit Corp. v. United States* , 132 F. Supp. 2d 1087 (CIT 2001) (“ *Allied Tube* ”). In *Allied Tube* , the plaintiff asked the court to reject the invoice date as the date of sale. The CIT declared, “ the party seeking to establish a date of sale other than the invoice date bears the burden of producing sufficient evidence to 'satisfy' the Department that 'a different date better reflects the date on which the exporter or producer establishes the material terms of sale.'” *See Allied Tube* , 132 F. Supp. 2d at 1090. Furthermore, “as elaborated by Department practice, a date other than invoice date 'better reflects' the date when 'material terms of sale' are established if the party shows that the 'material terms of sale' undergo no meaningful change (and are not subject to meaningful change) between the proposed date and the invoice date.” *Id* . The CIT ruled that the plaintiff in this case “failed to cite sufficient evidence to compel a rejection of the regulatory presumption in favor of invoice date as the date of sale.” *Id* . *See also Hornos Electricos de Venezuela, S.A. v. United States* , 285 F. Supp. 2d 1353, 1367-1368 (CIT 2003). Thus, the Department's rejection of the date of the purchase order as the date of sale is warranted, since CSN failed to establish that the material terms of sale were set on the purchase order date. Therefore, for purposes of these preliminary results of review, the appropriate date of sale is the date of the invoice, which sets the final price to the customer. We disagree with Nucor that the absence of a sale during the POR is a basis for terminating this review. While section 751(a)(2)(A) of the Act states that a dumping calculation should be performed for each entry during the POR, section 351.213(e) of the Department's regulations gives the Department flexibility in this regard by stating that the review can be based on entries, exports, or sales. Indeed, the Department's normal practice for CEP sales made after importation is to examine each transaction that has a date of sale within the POR and to liquidate POR entries based on the dumping margin calculated on those POR sales. *See* section 351.212 of the Department's regulations and the preamble to that section of *Antidumping Duties; Countervailing Duties; Final Rule* , 62 FR 27296, 27314-15 (May 19, 1997). We have also recognized that unique circumstances could lead us to base the margin for CEP sales on the sales entered rather than sold during the POR. Here, the respondent requesting an administrative review of its POR entries had only one entry during the POR, but no POR sales upon which to calculate a dumping margin for that entry. Because the entry during the POR can be tied to a sale occurring after the end of the POR and there are no other U.S. sales during the POR that could be considered for examination as a proxy for the post-POR sale, it is appropriate to determine the duties to be assessed on this entry based on the corresponding sale. Therefore, because the purpose of an administrative review is to establish the antidumping duty for entries, as well as to establish a new cash deposit rate (see section 751(a)), and we are able to tie the sale occurring shortly after the end of the POR to the entry during the POR, we are using this U.S. sale and the corresponding home market sales in the month of the U.S. sale in our margin calculation. Thus, we are conducting this review on the basis of the date of entry within the POR, and linking the entered subject merchandise to the appropriate sale to the unaffiliated U.S. customer. We will instruct the CBP to liquidate the specific entry at the calculated rate. If CSN is a respondent in an administrative review covering the period March 1, 2004, through February 28, 2005, we will exclude this U.S. sale from our margin calculation. Constructed Export Price Section 772(b) of the Act defines constructed export price
(CEP)as the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by, or for the account of, the producer or exporter of such merchandise, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter, as adjusted under sections 772(c) and (d). In contrast, section 772(a) of the Act defines export price
(EP)as the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States, as adjusted under section 772(c). In the instant review, CSN sold subject merchandise through an affiliated company, CSN LLC of Terre Haute, Indiana. CSN reported its single U.S. sale of subject merchandise as a CEP transaction and explained that its U.S. affiliate, CSN LLC, further manufactured the subject merchandise. The resulting product sold to the unaffiliated U.S. customer falls outside the scope of this antidumping duty order. After reviewing the evidence on the record of this review, we have preliminarily found that this particular CSN transaction is classified properly as a CEP sale because the sale occurred in the United States and was made through its U.S. affiliate to an unaffiliated U.S. buyer. Such a determination is consistent with section 772(b) of the Act and the U.S. Court of Appeals for the Federal Circuit's decision in *AK Steel Corp. v. United States* , 226 F. 3d 1361, 1374 (Fed. Cir. 2000) (“ *AK Steel* ”). In *AK Steel* , the Court of Appeals examined the definitions of EP and CEP, noting “the plain meaning of the language enacted by Congress in 1994, focuses on where the sale takes place and whether the foreign producer or exporter and the U.S. importer are affiliated, making these two factors dispositive of the choice between the two classifications.” *See AK Steel* , 226 F. 3d at 1369. The Court of Appeals declared, “ the critical differences between EP and CEP sales are whether the sale or transaction takes place inside or outside the United States and whether it is made by an affiliate,” and noted the phrase “outside the United States” had been added to the 1994 statutory definition of EP. *See AK Steel* , 226 F. 3d at 1368-70. Thus, the classification of a sale as either EP or CEP depends upon where the contract for sale was concluded ( *i.e.* , in or outside the United States) and whether the foreign producer or exporter is affiliated with the U.S. importer. In the case of this review, we find that CSN LLC, which is affiliated with CSN, the Brazilian manufacturer and exporter, concluded the contract of sale inside the United States, thereby supporting the classification of this sale as CEP. For this particular CEP sales transaction, we calculated price in conformity with section 772(b) of the Act. We based CEP on the packed, delivered prices to an unaffiliated purchaser in the United States. Pursuant to section 772(c)(2)(A) of the Act, we made deductions for movement expenses; these included foreign inland freight, foreign inland insurance, foreign brokerage and handling, international freight, marine insurance, U.S. brokerage and handling, U.S. customs duties, and inland freight to the unaffiliated U.S. customer. In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activities occurring in the United States, including imputed credit expenses and indirect selling expenses. We also made adjustments for the cost of further manufacturing and profit from economic activities in the United States, in accordance with sections 772(d)(2) and
(3)of the Act. Normal Value A. Home Market Viability To determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared CSN's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(B) of the Act. Because CSN'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 for the subject merchandise, we determined that the home market was viable. *See* CSN's section A Questionnaire Response at Attachment A-1, dated June 15, 2004. B. Price-to-Price Comparisons CSN reported sales in the home market to an affiliated company, INAL. The Department calculates NV based on sales to affiliated parties only if it is satisfied that the prices to the affiliates are comparable to the prices at which sales are made to unaffiliated parties, *i.e.* , sales at arm's length. 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 and direct selling expenses, discounts and packing. In current 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). Conversely, where sales to the affiliated party do not pass the arm's length test, we exclude all sales to that affiliated party from the NV calculation, as was the case in this review. We found that the sales to INAL failed the arm's length test, and therefore we disregarded them and used INAL's downstream sales to unaffiliated customers in our calculation of NV. We calculated NV based on prices to unaffiliated customers. We adjusted gross unit price for billing adjustments, interest revenue and indirect taxes. We made deductions, where appropriate, for foreign inland freight, warehousing expense and insurance, pursuant to section 773(a)(6)(B) of the Act. In addition, we made adjustments for differences in circumstances of sale for imputed credit expenses and commissions, in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. Finally, we deducted home market packing costs and added U.S. packing costs in accordance with sections 773(a)(6)(A) and
(B)of the Act. C. Cost of Production Analysis At the time the questionnaire was issued in this administrative review, the antidumping duty administrative review of the suspension agreement was the most recently completed segment of this proceeding. In accordance with section 773(b)(2)(A)(ii) of the Act, and consistent with the Department's practice, because we disregarded certain below-cost sales by CSN in the review of the suspension agreement, we found reasonable grounds to believe or suspect that this respondent made sales in the home market at prices below the cost of producing the merchandise. We, therefore, initiated a cost investigation with regard to CSN in order to determine whether this respondent made home market sales during the POR at prices below COP within the meaning of section 773(b)(2)(A)(ii) of the Act. In accordance with section 773(b)(3) of the Act, we calculated the weighted-average COP for each model based on the sum of CSN's material and fabrication costs for the foreign like product, plus amounts for selling expenses, general and administrative expenses (G&A), interest expenses and packing costs. The Department relied on the COP data reported by CSN, except for the G&A expense ratios. We revised their reported home market and U.S. G&A expense ratios to correct for fees that were incurred by the U.S. affiliate, CSN LLC, but which CSN reported as expenses in Brazil. For changes made to the COP information, *see* Memorandum to Neal Harper from Trinette Ruffin, Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results Companhia Siderurgica Nacional (CSN), dated March 31, 2005 (COP Memo). We compared the weighted-average COP figures to the 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 COP. On a product-specific basis, we compared the COP to home market prices net of any applicable billing adjustments, state ICMS and federal IPI indirect taxes (which were not included in CSN's reported manufacturing costs), and any applicable movement charges. Pursuant to section 773(b)(2)(C)(i) of the Act, where less than twenty percent of a respondent's sales of a given product were at prices less than the COP, we do not disregard any below-cost sales of that product because the below-cost sales were not made in “substantial quantities.” Where twenty percent or more of a respondent's sales of a given product during the POR were at prices less than the COP, we determine such sales to have been made in substantial quantities. Our cost test revealed that more than twenty percent of CSN's home market sales of certain products were made at below-cost prices during the reporting period. Therefore, we disregarded those below-cost sales, while retaining the above-cost sales for our analysis. Level of Trade In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade
(LOT)as the export transaction. The NV LOT is that of the starting-price sales in the comparison market. For CEP, it is the level of the constructed sale from the exporter to the importer. We consider only the selling activities reflected in the U.S. price after the deduction of expenses incurred in the United States and CEP profit under section 772(d) of the Act. *See Micron Technology Inc. v. United States* , 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). To determine whether NV sales are at a different LOT than CEP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. We analyze whether different selling activities are performed, and whether any price differences (other than those for which other allowances are made under the Act) are shown to be wholly or partly due to a difference in LOT between the CEP and NV. Pursuant to section 773(a)(7)(A) of the Act, we make an upward or downward adjustment to NV for LOT if the difference in LOT involves the performance of different selling activities and is demonstrated to affect price comparability, based on a pattern of consistent price differences between sales at different LOTs in the country in which NV is determined. Finally, if the NV LOT is at a more advanced stage of distribution than the LOT of the CEP, but the data available do not provide an appropriate basis to determine a LOT adjustment, we reduce NV by the amount of indirect selling expenses incurred in the foreign comparison market on sales of the foreign like product, but by no more than the amount of the indirect selling expenses incurred for CEP sales. *See* section 773(a)(7)(B) of the Act (the CEP offset provision). In analyzing differences in selling functions, we determine whether the LOTs identified by the respondent are meaningful. *See Antidumping Duties; Countervailing Duties, Final Rule* , 62 FR 27296, 27371 (May 19, 1997). If the claimed LOTs are the same, we expect that the functions and activities of the seller should be similar. Conversely, if a party claims that LOTs are different for different groups of sales, the functions and activities of the seller should be dissimilar. *See Porcelain-on-Steel Cookware from Mexico: Final Results of Administrative Review* , 65 FR 30068 (May 10, 2000). In the present review, CSN claimed that there was no LOT in the home market comparable to the LOT of the CEP sale, and that consequently it was not in a position to calculate an LOT adjustment. Pursuant to the Department's practice, CSN requested a CEP offset adjustment to NV. *See* CSN's section B Questionnaire Response at page 21, dated July 6, 2004. CSN claimed three LOTs in the home market based on distinct channels of distribution to two categories of customers: distributors and end-users. CSN's channels of distribution were direct sales from the mill to customers, sales through branches located at service centers where further processing services were provided, such as cutting and slitting, and downstream sales made through CSN's affiliate, INAL. We examined the reported selling functions and found that CSN's home market selling functions for all customers include pre-sale technical assistance, continuous technical service, price negotiation/customer communications, processing of customer orders, freight and delivery arrangements, sales calls and visits, credit evaluation, and warranty and return services. In addition, CSN also performs inventory maintenance for all customers except end-users buying directly from CSN. Finally, CSN makes small quantity sales only through INAL. *See* CSN's section A Questionnaire Response at Exhibit 11, June 15, 2004. We preliminarily find that there are three LOTs in the home market:
(1)direct sales,
(2)sales through branches, and
(3)sales through INAL. CSN's U.S. sale was made through one channel of distribution to its U.S. affiliate. Pursuant to the Department's practice, we determined the LOT of the U.S. sale based on the selling functions performed for the sale to CSN LLC, which include price negotiation/customer communications, processing customer orders, and freight and delivery arrangements. *See* CSN's section A Questionnaire Response at Exhibit 11, June 15, 2004. We preliminarily find that there is only one LOT in the U.S. market. We compared CSN's channels of distribution and selling functions in the home market with the selling functions for U.S. sales to its affiliate, CSN LLC. CSN's selling functions for sales to the United States are less numerous and less complex than CSN's selling functions for its home market sales in any of the channels of distribution. Further, in the home market, the chain of distribution is further from the factory, *e.g.* , many sales are made to distributors and may go through branches where they are further processed. We therefore preliminarily agree with CSN's claim that there is no LOT in the home market comparable to the LOT of the CEP sale, and that there is no basis to calculate an LOT adjustment. We then examined whether a CEP offset may be appropriate. Pursuant to section 351.412(f) of the Department's regulations, we grant a CEP offset only where NV is determined at a more advanced LOT than the LOT of the CEP price, and despite the fact that a person has cooperated to the best of its ability, the data available do not provide an appropriate basis to determine whether the difference in LOT affects price comparability. Accordingly, because the data available do not provide an appropriate basis for making an LOT adjustment, but the LOTs in the home market are at more advanced stages of distribution than the LOT of the CEP sale, we preliminarily find that a CEP offset adjustment is appropriate, in accordance with section 773(a)(7)(B) of the Act. Currency Conversion We made currency conversions into U.S. dollars, in accordance with section 773A(a) of the Act, based on the exchange rates in effect on the dates of the U.S. sales, as certified by the Dow Jones Reuters Business Interactive LLC (trading as Factiva). Preliminary Results of Review As a result of our review, we preliminarily find the weighted-average dumping margin for the period March 1, 2003, through February 29, 2004, to be as follows: Manufacturer / Exporter Margin (percent) Companhia Siderúrgica Nacional 0.00 The Department will disclose calculations performed in connection with these preliminary results of review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Case briefs for this review must be submitted to the Department no later than fourteen days after the date of the final U.S. verification report issued in this proceeding. Rebuttal briefs must be filed seven days from the deadline date for case briefs. Parties submitting arguments in this proceeding are requested to submit with the argument: 1) a statement of the issue, 2) a brief summary of the argument, and
(3)a table of authorities. Case and rebuttal briefs and comments must be served on interested parties in accordance with section 351.303(f) of the Department's regulations. Also, an interested party may request a hearing within 30 days of the date of publication of this notice. *See* section 351.310(c) of the Department's regulations. Unless otherwise specified, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs, or the first business day thereafter. The Department will issue the final results of this administrative review, including the results of its analysis of the issues raised in any briefs or comments at a hearing, within 120 days of publication of these preliminary results. Assessment Rates Upon completion of this administrative review, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an importer-specific *ad valorem* rate for merchandise subject to this review. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of review. If these preliminary results are adopted in the final results of review, we will direct CBP to assess the resulting assessment rates ( *ad valorem* ) against the entered customs values for the subject merchandise on each of the importer's entries during the review period. Cash Deposit Requirements The following cash deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act:
(1)the cash deposit rate for CSN will be the rate established in the final results of the administrative review (except that no deposit will be required if the rate is zero or *de minimis, i.e.* , less than 0.50 percent);
(2)for previously reviewed or investigated companies not covered in this review, the cash deposit rate will continue to be the company-specific rate published for the most recent period;
(3)if the exporter is not a firm covered in this review, a prior review or the original less-than-fair-value
(LTFV)investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and
(4)if neither the exporter nor the manufacturer is a firm covered in this review, any prior review, or the original LTFV investigation, the cash deposit rate for all other manufacturers or exporters will continue to be 42.12 percent, the “all others” rate established in the LTFV investigation. *See AD Order* , 67 FR at 11094. Notification to Interested Parties This notice also 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 the subsequent assessment of double antidumping duties. These preliminary results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act. Dated: March 31, 2005. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. [FR Doc. E5-1574 Filed 4-5-05; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE International Trade Administration A-427-820 Stainless Steel Bar from France: Preliminary Results of Antidumping Duty Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce. SUMMARY: In response to a timely request by the petitioners, 1 the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on stainless steel bar
(SSB)from France with respect to UGITECH S.A. (UGITECH). The period of review is March 1, 2003, through February 29, 2004. 1 The petitioners include the following companies: Carpenter Technology Corporation; Crucible Specialty Metals Division, Crucible Materials Corporation; and Electroalloy Corporation, a Division of G.O. Carlson, Inc. We preliminarily determine that sales have been made below normal value. Interested parties are invited to comment on the preliminary results. If the preliminary results are adopted in our final results of administrative review, we will instruct U.S. Customs and Border Protection
(CBP)to assess antidumping duties on all appropriate entries. In addition, the Department has received information sufficient to warrant a successor-in-interest analysis in this administrative review. Based on this information, we preliminarily determine that UGITECH S.A. is the successor-in-interest to Ugine-Savoie Imphy S.A. (Ugine-Savoie) for purposes of determining antidumping duty liability. Interested parties are invited to comment on the preliminary results. EFFECTIVE DATE: April 6, 2005. FOR FURTHER INFORMATION CONTACT: Terre Keaton or David J. Goldberger, AD/CVD Operations, Office 2, Import Administration-Room B099, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone:
(202)482-1280 or
(202)482-4136, respectively. SUPPLEMENTARY INFORMATION: Background On March 7, 2002, the Department published in the **Federal Register** an antidumping duty order on SSB from France. *See* 67 FR 10385. On March 31, 2004, the petitioners submitted a letter timely requesting that the Department conduct an administrative review of the sales of SSB made by Ugine-Savoie. Also in this letter, the petitioners claimed that Ugine-Savoie had recently gone through a change in corporate structure and that the corporate entity is now known as UGITECH. The Department published a notice of initiation of an administrative review with respect to UGITECH, formerly known as Ugine-Savoie. *See* 69 FR 23170, (April 28, 2004). On May 6, 2004, we issued a antidumping duty questionnaire to UGITECH which included successor-in-interest questions. Responses to the original questionnaire were received in July 2004. We issued a supplemental questionnaire in October 2004, and received responses in October and November 2004 and January 2005. On November 5, 2004, we extended the time limit for the preliminary results in this review until March 30, 2005. *See Stainless Steel Bar from France: Notice of Extension of Time Limit for Preliminary Results in Antidumping Duty Administrative Review* , 69 FR 64563. In November 2004, we conducted a verification of certain portions of UGITECH's questionnaire responses, in accordance with 19 CFR 351.307. The results of this verification are described in the Memorandum to the File dated January 13, 2005, from Terre Keaton and David J. Goldberger, International Trade Compliance Analysts, through Irene Darzenta Tzafolias, Program Manager, entitled: *Sales Verification in Ugine, France of UGITECH S.A. (UGITECH Verification Report)* . In January 2005, as instructed by the Department, UGITECH submitted revised sales data pursuant to verification findings and revised cost data pursuant to cost supplemental questionnaires. In February 2005, the petitioner and the respondent submitted comments for purposes of the preliminary results. On March 15, 2005, we issued UGITECH a supplemental questionnaire concerning certain cost of production
(COP)issues. We received UGITECH's response on March 23, 2005. Scope of the Order For purposes of this order, the term “stainless steel bar” includes articles of stainless steel in straight lengths that have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise cold-finished, or ground, having a uniform solid cross section along their whole length in the shape of circles, segments of circles, ovals, rectangles (including squares), triangles, hexagons, octagons, or other convex polygons. Stainless steel bar includes cold-finished stainless steel bars that are turned or ground in straight lengths, whether produced from hot-rolled bar or from straightened and cut rod or wire, and reinforcing bars that have indentations, ribs, grooves, or other deformations produced during the rolling process. Except as specified above, the term does not include stainless steel semi-finished products, cut length flat-rolled products ( *i.e.* , cut length rolled products which if less than 4.75 mm in thickness have a width measuring at least 10 times the thickness, or if 4.75 mm or more in thickness having a width which exceeds 150 mm and measures at least twice the thickness), products that have been cut from stainless steel sheet, strip or plate, wire ( *i.e.* , cold-formed products in coils, of any uniform solid cross section along their whole length, which do not conform to the definition of flat-rolled products), and angles, shapes and sections. The stainless steel bar subject to this order is currently classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 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 scope of this order is dispositive. Successor-In-Interest Analysis In its July 2, 2004, section A response (hereafter section A response), UGITECH reported that on November 28, 2003, the shareholders of Ugine-Savoie voted to change the company's name to UGITECH S.A. UGITECH claimed that Ugine-Savoie and UGITECH remain the same legal entity and there was no change in ownership associated with the change in name. According to the section A response, prior to the name change, Ugine-Savoie Imphy dissolved one of its wholly-owned French subsidiaries ( *i.e.* , Ugine-Savoie France S.A.) and integrated that company's operations as an internal department within Ugine-Savoie Imphy. Similarly, shortly after the name change, UGITECH dissolved another wholly-owned French subsidiary ( *i.e.* , Sprint Metal S.A.) and integrated its operations as a internal department within UGITECH. Also at that time, the former chief executive officer of Sprint Metal was made vice president of sales at UGITECH. Other than the name change and the incorporation of the two former subsidiaries into the company, UGITECH operations and facilities remain essentially unchanged. Thus, in accordance with section 751(b) of the Act, the Department is conducting a successor-in-interest analysis to determine whether UGITECH is the successor-in-interest to Ugine-Savoie Imphy S.A. for purposes of determining antidumping liability with respect to the subject merchandise. In making such a successor-in-interest determination, the Department examines several factors including, but not limited to, changes in:
(1)management;
(2)production facilities;
(3)supplier relationships; and
(4)customer base. *See, e.g., Polychloroprene Rubber from Japan: Final Results of Changed Circumstances Review* , 67 FR 58 (January 2, 2002) ( *Polychloroprene Rubber from Japan), and Brass Sheet and Strip from Canada; Final Results of Antidumping Duty Administrative Review* , 57 FR 20460 (May 13, 1992) ( *Canadian Brass* ). While no individual factor or combination of these factors will necessarily provide a dispositive indication, the Department will generally consider the new company to be the successor to the previous company if its resulting operation is not materially dissimilar to that of its predecessor. *See, e.g., Polychloroprene Rubber from Japan, Industrial Phosphoric Acid from Israel: Final Results of Changed Circumstances Review* , 59 FR 6944 (February 14, 1994), *Canadian Brass, and Fresh and Chilled Atlantic Salmon from Norway: Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review* , 63 FR 50880 (September 23, 1998). Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the former company, the Department will accord the new company the same antidumping duty treatment as its predecessor. We preliminarily determine that UGITECH is the successor-in-interest to Ugine-Savoie. UGITECH submitted documentation supporting its claims that its name change resulted in no significant changes in either production facilities, supplier relationships, customer base, or management. This documentation consisted of:
(1)a copy of the board meeting minutes for the name change;
(2)a copy of the article of incorporation for UGITECH;
(3)copies of the official registration of Ugine-Savoie (before the name change) and UGITECH (after the name change); and
(4)copies of the statements of dissolution for Ugine-Savoie France S.A. and Sprint Metal S.A. These documents, which the Department examined thoroughly at verification, demonstrate that UGITECH operates as the same business entity as Ugine-Savoie. Because UGITECH has presented evidence to establish a *prima facie* case of its successorship status, we preliminarily find that UGITECH should receive the same antidumping duty treatment with respect to SSB as the former Ugine-Savoie. Fair Value Comparisons To determine whether sales of SSB by UGITECH to the United States were made at less than normal value (NV), we compared constructed export price
(CEP)to the NV, as described in the “Constructed Export Price” and “Normal Value” sections of this notice. Pursuant to section 777A(d)(2) of the Act, we compared the CEPs of individual U.S. transactions to the weighted-average NV of the foreign like product where there were sales made in the ordinary course of trade, as discussed in the “Cost of Production Analysis” section below. Product Comparisons In accordance with section 771(16) of the Act, we considered all products produced by UGITECH covered by the description in the “Scope of the Order” section, above, to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We compared U.S. sales to sales made in the home market within the contemporaneous window period, which extends from three months prior to the month of the U.S. sale until two months after the sale. Where there were no sales of identical merchandise in the comparison market made in the ordinary course of trade to compare to U.S. sales, we compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade. In making the product comparisons, we matched foreign like products based on the physical characteristics reported by UGITECH in the following order: general type of finish; grade; remelting process; type of final finishing operation; shape; and size range. For the preliminary results, we have reclassified UGITECH's separate grade codes 0760 and 0780 as a single grade code because the information on the record indicates that these grades are essentially identical (they have exactly the same specifications for nickel, chromium, molybdenum, sulphur and carbon components). UGITECH identified its sales of reinforcing bar under the final finishing product characteristic (FFINISHH/U) but did not identify it under the shape product characteristic (SHAPEH/U). We have preliminarily determined that this type of bar should be identified under the SHAPEH/U variable, as such SSB normally features indentations, ribs, grooves, or other deformations produced during the rolling process. Accordingly, we have identified the reinforcing SSB under the SHAPEH/U variable. In addition, based on the information provided by UGITECH in its March 14, 2005, letter, we reclassified the FFINISHH/U product characteristics for reinforcing bar. In addition, UGITECH reported sales of hot-rolled bar that was peeled or descaled, and added a FFINISHH/U code for this characteristic at the end of the FFINISHH/U hierarchy. Based on our analysis of UGITECH's production flow chart at Appendix SA-1 of the October 28, 2004, supplemental questionnaire response, we believe that it is more appropriate to place the peeled or descaled characteristic between “shot blasted” and “rough-turned,” rather than after “centerless ground,” as reported by UGITECH. Consequently, we have revised UGITECH's coding of the final finishing characteristic in order to provide more appropriate model matches. Constructed Export Price We calculated CEP in accordance with section 772(b) of the Act because the subject merchandise was sold for the account of UGITECH by its subsidiary Ugine Stainless & Alloy, Inc. (US&A) in the United States to unaffiliated purchasers. In addition, UGITECH reported sales of SSB which were further processed by US&A in the United States. For the subject merchandise further processed in the United States, we used the starting price of the subject merchandise and deducted the costs of the further processing to determine CEP for such merchandise, in accordance with section 772(d)(2) of the Act. To calculate the cost of further manufacturing, we relied on UGITECH's reported cost of further manufacturing materials, labor, and overhead, plus amounts for further manufacturing general and administrative expenses (G&A) and financial expenses, as reported in the January 14, 2005, supplemental section E questionnaire response. We based CEP on the packed prices to unaffiliated purchasers in the United States. We identified the correct starting price, by adjusting for alloy surcharges, freight revenue, other revenue and billing adjustments associated with the sale, and by making deductions for discounts, where applicable. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act. These expenses included, where appropriate, foreign inland freight (including freight from the plant/warehouse to the port of exportation), brokerage and handling, ocean freight, marine insurance, U.S. inland freight expenses (including freight from the U.S. port to the warehouse, freight between warehouses, and freight from the warehouse to the unaffiliated customer), and U.S. customs duties and fees (including harbor maintenance fees and merchandise processing fees). In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (commissions, credit expenses, warranty expenses, other direct selling expenses and repacking expenses) and indirect selling expenses (indirect selling expenses and inventory carrying costs) incurred in the country of exportation and the United States. For the sales where the payment date was not reported, we set the payment date equal to the preliminary results date ( *i.e.* , March 30, 2005). Where US&A reported a shipment date that preceded the invoice date, we set the sale date equal to the shipment date. We also deducted an amount for further-manufacturing costs, where applicable, in accordance with section 772(d)(2) of the Act, and made an adjustment for profit in accordance with section 772(d)(3) of the Act. In Appendix SA-2 of the November 22, 2004, supplemental questionnaire response, UGITECH reported that the terms of its sales agreement with a certain U.S. customer involved the transfer of specific equipment from UGITECH to the customers. While it may be appropriate to consider the cost of this equipment to be a direct selling expense attributable to all sales covered by the agreement, the per-unit amount for such an expense, according to UGITECH's February 23, 2005, letter at page 8, is well under 0.33 percent *ad valorem* , the Department's threshold under 19 CFR 351.413 for insignificant adjustments. Therefore, we have disregarded any adjustment for this selling expense in accordance with section 777A(a)(2) of the Act and 19 CFR 351.413. Normal Value A. Home Market Viability In order 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 the volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(C) of the Act. Because UGITECH'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 for the subject merchandise, we determined that its home market was viable. B. Affiliated-Party Transactions and Arm's-Length Test During the POR, UGITECH sold the foreign like product to affiliated customers. To test whether these sales were made at arm's-length prices, we compared, on a product-specific basis, the starting prices of sales to affiliated and unaffiliated customers, net of all discounts and rebates, movement charges, direct selling expenses (including commissions), and packing expenses. Where the price to the affiliated party was, on average, within a range of 98 to 102 percent of the price of the same or comparable merchandise sold to unaffiliated parties, we determined that sales made to the affiliated party were at arm's-length. *See* 19 CFR 351.403(c). Sales to affiliated customers in the home market that were not made at arm's-length prices were excluded from our analysis because we considered these sales to be outside the ordinary course of trade. *See* 19 CFR 351.102(b). 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 (id.); *see also 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* ). In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market ( *i.e.* , the “chain of distribution”), including selling functions, class of customer (“customer category”), and the level of selling expenses for each type of sale. Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for EP and comparison market sales ( *i.e.* , NV based on either home market or third country prices 2 ), we consider the starting prices before any adjustments. For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Act. *See Micron Technology, Inc. v. United States* , 243 F. 3d 1301, 1314-1315 (Fed. Cir. 2001). 2 Where NV is based on constructed value (CV), we determine the NV LOT based on the LOT of the sales from which we derive selling expenses, G&A expenses, and profit for CV, where possible. When the Department is unable to match U.S. sales of the foreign like product in the comparison market at the same LOT as the EP or CEP, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP or CEP sales at a different LOT in the comparison market, where available data make it practicable, we make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales only, if the NV LOT is more remote from the factory than the CEP LOT and there is no basis for determining whether the difference in LOTs between NV and CEP affects price comparability ( *i.e.* , no LOT adjustment was practicable), the Department shall grant a CEP offset, as provided in section 773(a)(7)(B) of the Act. *See Plate from South Africa* at 61731. We obtained information from UGITECH regarding the marketing stages involved in making the reported foreign market and U.S. sales, including a description of the selling activities performed for each channel of distribution. UGITECH sold SSB to end-users and distributors in both the U.S. and home markets. UGITECH claims that it made CEP sales in the U.S. market (through its U.S. affiliate, US&A) through the following two channels of distribution: 1) sales of UGITECH-produced SSB purchased from UGITECH, and 2) sales of UGITECH-produced SSB purchased from Trafilerie Bedini, S.r.l (Bedini) 3 . We compared the selling activities performed in each channel, and found that the same selling functions ( *e.g.* , production planning, warranty, technical service, and freight & delivery) were performed at the same relative level of intensity in both channels of distribution. Accordingly, we find that all CEP sales constitute one LOT. 3 Bedini is an affiliated Italian company which purchases SSB from UGITECH, further processes it and then resells the SSB to the United States. With respect to the home market, UGITECH claimed five channels of distribution (channels 3 through 7) described as follows: 3) factory direct sales; 4) ex-inventory sales of standard SSB; 5) ex-inventory sales of SSB for special applications; 6) sales of ex-inventory French-origin standard SSB purchased from Bedini; and 7) sales of ex-inventory French-origin SSB for special applications purchased from Bedini. According to UGITECH, the direct sales (channel 3), the ex-inventory standard SSB sales (channels 4 and 6), and the ex-inventory SSB with special application sales (channels 5 and 7) constitute three distinct levels of trade in the home market. In determining whether separate LOTs exist in the home market, we compared the selling functions performed across all channels of distribution. We found that, except for inventory maintenance, all selling functions were performed across all channels of distribution with only slight variances in the levels of intensity for a few sales activities listed within certain selling functions. We note that the selling functions ( *e.g.* , strategy planning and marketing, customer sales contact, production/planning/order evaluation, advertising, warranty, technical service, computer systems and freight and delivery) were all generally performed at varying levels of intensity for both the direct ex-works sales and the inventory sales. In certain activities such as strategy planning and marketing, customer sales contact and production/planning/order evaluation, the level of intensity for direct ex-works sales and the inventory sales was identical. Based on this analysis, we find that, although the level of intensity varies within a few of the selling activities performed for UGITECH's direct ex-works and inventory sales, these variances are not so significant to constitute distinct LOTs. With respect to inventory maintenance, we find that there is a significant difference in the level of intensity reported for the three activities ( *i.e.* , light general warehouse services, further manufacturing/special services and pre-sale warehousing) being performed under this selling function by the inventory sales channels. However, we note that, although UGITECH has classified light general warehouse services ( *e.g.* , cutting and grinding), further manufacturing and special services performed on SSB for special applications as selling activities, we do not consider these activities to be selling functions and thus they are not relevant to the LOT analysis. *See Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Bar From France* , 66 FR 40201 (August 2, 2001); continued in *Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Bar From France* , 67 FR 3143 (January 23, 2002) ( *See Stainless Steel Bar From France* ). In addition, we find that the pre-sale warehousing selling activity which UGITECH defined as “the holding of merchandise after production and before sale and shipment” is not a sufficient basis in and of itself to distinguish separate LOTs between direct ex-works and inventory sales. Therefore, based on the analysis above, taken as a whole, we find that all home market sales were made at the same LOT. Finally, we compared the CEP LOT to the home market LOT and found that the selling functions performed for home market customers are either performed at a higher degree of intensity or are greater in number than the selling functions performed for the U.S. customer. For example, in comparing the selling activities noted under the various selling functions reported ( *e.g.* , strategy planning/marketing and customer sales contact), UGITECH performed each of these selling activities at a higher level of intensity in the home market than in the U.S. market. Similarly, we noted that the advertising selling function was performed at the highest level of intensity in the home market, whereas, in the U.S. market it was not performed at all. Therefore, we conclude that UGITECH's home market sales are at a more advanced LOT than its U.S. sales. As home market and U.S. sales were made at different LOTs, we could not match CEP sales to home market sales at the same LOT. Moreover, as we found only one LOT in the home market, it was not possible to make an LOT adjustment to home market sales because such an adjustment is dependent upon our ability to identify a pattern of consistent price differences between the home market sales on which NV is based and home market sales at the LOT of the export transaction. Furthermore, we have no other information that provides an appropriate basis for determining an LOT adjustment. Because the data available do not form an appropriate basis for making an LOT adjustment, but the home market LOT is at a more advanced stage of distribution than the CEP LOT, we have made a CEP offset to NV in accordance with section 773(a)(7)(B) of the Act. The CEP offset is calculated as the lesser of:
(1)the indirect selling expenses on home market sales, or
(2)the indirect selling expenses deducted from the starting price in calculating CEP. Cost of Production Analysis In the less-than-fair-value
(LTFV)investigation, the Department disregarded certain sales made by UGITECH that failed the cost test ( *see Stainless Steel Bar From France* at 3143). Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or suspect that UGITECH made sales in the home market at prices below the cost of producing the merchandise in the current review period. Accordingly, we initiated a COP investigation covering UGITECH's home market sales. A. Calculation of Cost of Production In accordance with section 773(b)(3) of the Act, we calculated UGITECH's COP and constructed value
(CV)based on the sum of UGITECH's costs of materials and conversion for the foreign like product, plus amounts for G&A expenses and interest expenses ( *see* “Test of Home Market Sales Prices” section below for treatment of home market selling expenses). The Department relied on the COP data submitted by UGITECH in its most recent supplemental section D questionnaire response, dated January 14, 2005, for the COP calculation, except in the following instances: 1. For the preliminary results, we relied on UGITECH's weighted-average costs during the POR. UGITECH argued that the standard methodology of weight-averaging costs over a single cost-reporting period is distortive in this instance. UGITECH reported weighted-average direct materials costs in six separate cost reporting periods, arguing that the prices of certain raw material alloys fluctuated significantly during the POR. We preliminarily determine that weighted-average costs over the POR are not distortive. 2. UGITECH reported its G&A expense ratio on a division-specific basis by allocating company-wide G&A expenses to the Ugine and Imphy divisions, rather than on a company-wide basis. We have divided UGITECH's total company-wide G&A expenses by the company's total cost of goods sold (COGS), which we adjusted for packing expenses, freight-out expenses, and custom taxes, to derive a company-wide G&A expense ratio. 3. In fiscal year 2003, UGITECH accrued restructuring costs related to a multi-year restructuring plan which is expected to be completed in 2007. Although UGITECH's home-country GAAP require the company to accrue the total estimated costs during the year in which the costs are probable and reasonably estimable, UGITECH reported that the accrued costs relate to activities which occurred or are expected to occur in five separate fiscal years (2003 through 2007). Therefore, we estimated the current portion of the restructuring costs as one-fifth of the total accrued amount. 4. UGITECH recognized expenses related to R&D costs during fiscal year 2003, including an amount for amortization expense of capitalized R&D expenditures and an amount of direct R&D expenses. Prior to fiscal year 2003, UGITECH did not capitalize any R&D expenditures. During fiscal year 2003, UGITECH changed its accounting methodology, and began to capitalize certain R&D expenditures, amortizing them over a period of five years. Thus, the R&D amortization expense represents one-fifth of the capitalized R&D expenditures which were incurred during 2003. We adjusted UGITECH's reported R&D costs to reflect the accounting method used historically by the company. As such, we added the entire amount of 2003 capitalized R&D costs to UGITECH's G&A expenses. 5. In accordance with its home country GAAP, UGITECH incurred and recognized a loss for the impairment of fixed assets during fiscal year 2003. Impairment is the condition that exists when the carrying amount of a long-lived asset or asset group exceeds its fair value and the excess carrying amount is unrecoverable. ( *See* UGITECH's January 14, 2005 supplemental section D response at 8). However, UGITECH excluded the loss from the company's reported G&A expenses for purposes of this administrative review. Because the impairment loss relates to the general operations of the company during the 2003 fiscal year, we included UGITECH's recognized impairment in the company-wide G&A expenses. 6. For the purpose of calculating the financial expense ratio, because UGITECH's parent, Arcelor, does not report COGS, UGITECH estimated Arcelor's COGS by calculating UGITECH's division-specific COGS-to-operating costs and applying that ratio to Arcelor's total operating costs, deriving an estimate of Arcelor's COGS. Rather than attempting to estimate Arcelor's unreported COGS, we recalculated the financial expense ratio based on Arcelor's actual total operating expenses. Arcelor's total operating expenses include Arcelor's COGS and G&A expenses. Therefore, we applied the resulting financial expense ratio to UGITECH's per-unit COM and G&A expenses to derive the total per-unit COP of subject merchandise. 7. To calculate the short-term interest income offset to UGITECH's financial expense ratio, UGITECH estimated the short-term interest income recognized by Arcelor by analyzing the experience of Arcelor's two largest subsidiaries. UGITECH included income from mutual fund investments in the total short-term interest income of the two largest subsidiaries. We revised UGITECH's calculations to exclude the mutual fund income from the calculation of the short-term interest income offset. We also added “Charges linked to securitization programmes” to Arcelor's total financial expenses for purposes of calculating UGITECH's financial expense ratio. This expense was recognized in Arcelor's audited financial statement as a financial expense, but was excluded from the calculations in UGITECH's responses. Our revisions to UGITECH's COP data are discussed in the Memorandum from Joseph Welton, Accountant, to Neal Halper, Director, entitled * Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Determination - UGITECH, S.A. * , dated March 30, 2005. B. Test of Home Market Sales Prices On a product-specific basis, we compared the adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether the sale prices were below the COP. For purposes of this comparison, we used COP exclusive of selling and packing expenses. The prices (inclusive of interest revenue, where appropriate) were exclusive of any applicable movement charges, rebates, discounts, and direct and indirect selling expenses and packing expenses, revised where appropriate, as discussed below under “Price-to-Price Comparisons.” In determining whether to disregard home market sales made at prices less than their COP, we examined, in accordance with sections 773(b)(1)(A) and
(B)of the Act, whether such sales were made:
(1)within an extended period of time,
(2)in substantial quantities, and
(3)at prices which did not permit the recovery of all costs within a reasonable period of time. C. Results of the COP Test Pursuant to section 773(b)(1) of the Act, where less than 20 percent of the respondent's sales of a given product are at prices less than the COP, we do not disregard any below-cost sales of that product, because we determine that in such instances the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product are at prices less than the COP, we determine the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act. We found that, for certain specific products, more than 20 percent of UGITECH's home market sales were at prices less than the COP and, in addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act. Price-to-Price Comparisons We calculated NV based on delivered prices to unaffiliated customers or prices to affiliated customers that were determined to be at arm's length. We made adjustments, where appropriate, to the starting price for billing corrections, early payment discounts and rebates. We made deductions, where appropriate, from the starting price for inland freight (from the plant to the warehouse or plant to the customer), warehousing expenses, and inland insurance, under section 773(a)(6)(B)(ii) of the Act. For the sales where the payment date was not reported, we set the payment date equal to the preliminary results date ( *i.e.* , March 30, 2005). Where UGITECH reported a shipment date that preceded the invoice date, we set the sale date equal to the shipment date. We made adjustments for differences in costs attributable to differences in the physical characteristics of the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. In addition, we made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in circumstances of sale for imputed credit expenses and warranty expenses. We also deducted home market packing costs and added U.S. packing costs, in accordance with section 773(a)(6)(A) and
(B)of the Act. Finally, as discussed above under the Level of Trade section, we made a CEP offset pursuant to section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). We calculated the CEP offset as the lesser of the indirect selling expenses on the comparison-market sales or the indirect selling expenses deducted from the starting price in calculating CEP. Currency Conversion We made currency conversions in accordance with section 773A of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank. Preliminary Results of Review As a result of this review, we preliminarily determine that the weighted-average dumping margin for the period March 1, 2003, through February 29, 2004, is as follows: Manufacturer/Exporter Percent Margin UGITECH S.A. (Successor-in-interest to Ugine-Savoie Imphy S.A.) 17.71 We will disclose the calculations used in our analysis to parties to this proceeding within five days of the publication date of this notice. *See* 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of publication. *See* 19 CFR 351.310(c). If requested, a hearing will be scheduled after determination of the briefing schedule. Interested parties who wish to request a hearing or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, Room B-099, 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 issues to be discussed. *See* 19 CFR 351.310(c). Issues raised in the hearing will be limited to those raised in the respective case briefs. Case briefs from interested parties and rebuttal briefs, limited to the issues raised in the respective case briefs, may be submitted in accordance with a schedule to be determined. Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument
(1)a statement of the issue and
(2)a brief summary of the argument. Parties are also encouraged to provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any written briefs, not later than 120 days after the date of publication of this notice, pursuant to section 751(a)(3)(A) of the Act. Assessment Rates The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries, in accordance with 19 CFR 351.212. The Department will issue appropriate appraisement instructions for the companies subject to this review directly to CBP within 15 days of publication of the final results of this review. For assessment purposes, we calculated importer- or customer-specific ad valorem duty assessment rates based on the ratio of the total amount of dumping margins calculated for the examined sales to the total entered value of those same sales. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review if any importer- or customer-specific assessment rate calculated in the final results of this review is above *de minimis* ( *i.e.* , at or above 0.50 percent). *See* 19 CFR 351.106(c)(1). The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated duties, where applicable. Cash Deposit Requirements The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act:
(1)the cash deposit rate for the reviewed company will be that established in the final results of this review, except if the rate is less than 0.50 percent, and therefore, *de minimis* within the meaning of 19 CFR 351.106(c)(1), in which case the cash deposit rate will be zero;
(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 period;
(3)if the exporter is not a firm covered in this review, a prior review, or the original LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and
(4)the cash deposit rate for all other manufacturers or exporters will continue to be 3.90 percent, the “All Others” rate made effective by the LTFV investigation ( *see Notice of Antidumping Duty Order: Stainless Steel Bar From France* , 67 FR 10385 (March 7, 2002)). These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review. Notification to Importers This notice also 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 the subsequent assessment of double antidumping duties. This administrative review and notice are published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221. Dated: March 30, 2005. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. [FR Doc. E5-1577 Filed 4-5-05; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration [I.D. 040105B] Pacific Fishery Management Council; Public Meeting AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice of public meeting. SUMMARY: The Pacific Fishery Management Council's (Council) Ad Hoc Groundfish Trawl Individual Quota Committee
(TIQC)will hold a working meeting which is open to the public. DATES: The TIQC working meeting will begin Tuesday, May 10, 2005 at 8:30 a.m. and may go into the evening if necessary to complete business for the day. The meeting will reconvene from 8:30 a.m. and continue until business for the day is complete on Wednesday, May 11, 2005. ADDRESSES: The meeting will be held in the Broadway Room at the Residence Inn by Marriott-Portland Downtown, RiverPlace, 2115 SW River Parkway, Portland, OR 97201. Telephone: 503-552-9500 *Council address:* Pacific Fishery Management Council, 7700 NE Ambassador Place, Suite 200, Portland, OR 97220-1384. FOR FURTHER INFORMATION CONTACT: Mr. Jim Seger, Staff Officer (Economist), 503-820-2280. SUPPLEMENTARY INFORMATION: The purpose of the TIQC working meeting is to continue to review results from public scoping and some preliminary analysis, and refine recommendations to the Council on an individual quota program to cover limited entry trawl landings in the West Coast groundfish fishery. Although nonemergency issues not contained in the TIQC meeting agenda may come before the TIQC for discussion, those issues may not be the subject of formal TIQC action during these meetings. TIQC action will be restricted to those issues specifically listed in this notice and to any issues arising after publication of this notice requiring emergency action under Section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the TIQC's intent to take final action to address the emergency. Special Accommodations The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Ms. Carolyn Porter at 503-820-2280 at least 5 days prior to the meeting date. Dated: April 1, 2005. Emily Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E5-1556 Filed 4-5-05; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration [I.D. 040105A] Pacific Fishery Management Council; Public Meeting AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice of public meeting. SUMMARY: The Pacific Fishery Management Council's (Council) Highly Migratory Species Management Team (HMSMT) will hold a work session, which is open to the public. DATES: The work session will be Thursday, May 12, 2005, from 1 p.m. until 5 p.m. and Friday, May 13, 2005, from 9 a.m. until business for the day is completed. ADDRESSES: The work session will be held at the National Marine Fisheries Service, Southwest Fisheries Science Center, Large Conference Room, 8604 La Jolla Shores Drive, Room D-203, La Jolla, CA 92037,
(858)546-7000 *Council address:* Pacific Fishery Management Council, 7700 NE Ambassador Place, Suite 200, Portland, OR 97220-1384. FOR FURTHER INFORMATION CONTACT: Dr. Kit Dahl, Pacific Fishery Management Council
(503)820-2280. SUPPLEMENTARY INFORMATION: The main purpose of this work session is for the HMSMT to review issues related to the implementation of the HMS fishery management plan and make recommendations to the Council on future action on these issues. Issues discussed could include the Council's response to overfishing of bigeye tuna and other HMS so declared in the future, developing sea turtle bycatch mitigation measures for the West Coast high seas longline fishery, establishing a limited entry program for the West Coast high seas longline fishery, implementation of an observer coverage plan, and review of exempted fishing permits, among others. This HMSMT work session is for the purpose of developing information for the Council's consideration at a future Council meeting; no management actions will be decided by the HMSMT at this work session. Although nonemergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency. Special Accommodations The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Ms. Carolyn Porter at
(503)820-2280 at least 5 days prior to the meeting date. Dated: April 1, 2005. Emily Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E5-1570 Filed 4-5-05; 8:45 am] BILLING CODE 3510-22-S COMMODITY FUTURES TRADING COMMISSION Agricultural Advisory Committee; Eleventh Renewal The Commodity Futures Trading Commission has determined to renew again for a period of two years its advisory committee designated as the “Agricultural Advisory Committee.” The Commission certifies that the renewal of the advisory committee is in the public interest in connection with duties imposed on the Commission by the Commodity Exchange Act, 7 U.S.C. 1, *et seq.,* as amended. The objectives and scope of activities of the Agricultural Advisory Committee are to conduct public meetings and submit reports and recommendations on issues affecting agricultural producers, processors, lenders and others interested in or affected by agricultural commodities markets, and to facilitate communications between the Commission and the diverse agricultural and agriculture-related organizations represented on the Committee. The Committee's membership represents a cross-section of interested and affected groups including representatives of producers, processors, lenders and other interested agricultural groups. Interested persons may obtain information or make comments by writing to the Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Issued in Washington, DC, on March 31, 2005, by the Commission. Jean A. Webb, Secretary of the Commission. [FR Doc. 05-6779 Filed 4-5-05; 8:45 am]
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Traces to 16 documents
CFR
5 references not yet in our index
  • 132 F. Supp. 2d 1087
  • 132 F. Supp. 2
  • 285 F. Supp. 2d 1353
  • 226 F.3d 1361
  • 243 F.3d 1301
Citation graph
cites case law
Notices
Notice of public meeting
C.F.R.§ 351.213
C.F.R.§ 351.401
C.F.R.§ 351.403
C.F.R.§ 351.410
C.F.R.§ 351.224
C.F.R.§ 351.212
C.F.R.§ 351.402
C.F.R.§ 351.307
C.F.R.§ 351.413
F. Supp.132 F. Supp. 2d 1087
F. Supp.132 F. Supp. 2
F. Supp.285 F. Supp. 2d 1353
Cites 21 · showing 12Cited by 0 across 0 sources
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