02-1651. Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Bar from France

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final determination of sales at less than fair value.

EFFECTIVE DATE:

January 23, 2002.

FOR FURTHER INFORMATION CONTACT:

Brian Smith or Terre Keaton, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; [phone] or [phone], respectively.

Final Determination

The Department of Commerce is conducting an antidumping duty investigation of stainless steel bar from France. We determine that stainless steel bar from France is being, or is likely to be, sold in the United States at less than fair value, as provided in section 735(a) of the Tariff Act of 1930, as amended. On August 2, 2001, the Department of Commerce published its preliminary determination of sales at less than fair value of stainless steel bar from France. Based on the results of verification and our analysis of the comments received, we have made changes in the margin calculations. The final weighted-average dumping margins are listed below in the section entitled “Continuation of Suspension of Liquidation.”

The Applicable Statute

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930, as amended (“the Act”) by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department's”) regulations refer to 19 CFR part 351 (2001).

Case History

Since the publication of the preliminary determination in this investigation (see Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Stainless Steel Bar From France, 66 FR 40201 (August 2, 2001) (“Preliminary Determination”)), the following events have occurred:

In August through September 2001, we conducted verifications of the questionnaire responses submitted by Aubert & Duval S.A. (“A&D”) and Ugine-Savoie Imphy S.A. (“U-SI”). On August 28, 2001, A&D notified the Department that it was no longer participating in this investigation. We issued U-SI's verification report on October 25, 2001. See “Verification” section of this notice for further discussion.

On November 27, 2001, U-SI submitted revised sales and cost databases pursuant to verification findings and to the Department's November 13, 2001, request.

The petitioners ^[1] and respondent filed case and rebuttal briefs in November 2001. A public hearing was held at the request of the petitioners on December 6, 2001.

Although the deadline for this determination was originally December 17, 2001, in order to accommodate certain verifications that were delayed because of the events of September 11, 2001, the Department tolled the final determination deadline in this and the concurrent stainless steel bar investigations until January 15, 2002.

Scope of Investigation

For purposes of this investigation, 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 investigation 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 investigation is dispositive.

Prior to the preliminary determinations in these investigations, the respondent in this and the companion stainless steel bar (“SSB”) investigations filed comments seeking to exclude certain products from the scope of these investigations. The specific products identified in their exclusion requests were: stainless steel tool steel, welding wire, special-quality oil field equipment steel (“SQOFES”), and special profile wire.

In the preliminary determinations, we concluded that all of these products, except for special profile wire, are within the scope of these investigations. Specifically, regarding stainless steel tool steel, welding wire, and SQOFES, after considering the respondents' comments and the petitioners' objections to the exclusion requests, we preliminarily determined that the scope is not overly broad. Therefore, stainless steel tool steel, welding wire, and SQOFES are within the scope of these SSB investigations. In addition, we preliminarily determined that SQOFES does not constitute a separate class or kind of merchandise from SSB. Regarding special profile wire, we preliminarily determined that this product does not fall within the scope as it is written because its cross section is in the shape of a concave polygon. Therefore, we did not include special profile wire in these investigations. For details, see the Memorandum to Susan Kuhbach and Louis Apple from the Stainless Steel Bar Team, dated July 26, 2001, entitled “Scope Exclusion Requests,” and the Memorandum to Louis Apple from the Stainless Steel Bar Team, dated July 26, 2001, entitled “Whether Special Profile Wire Product is Included in the Scope of the Investigation.”

Finally, we note that in the concurrent countervailing duty investigation of stainless steel bar from Italy, the Department preliminarily determined that hot-rolled stainless steel bar is within the scope of these investigations. See Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty Determination with Final Antidumping Duty Determination: Stainless Steel Bar from Italy, 66 FR 30414 (June 6, 2001).

With the exception of one respondent in the Germany investigation which filed comments on the Department's preliminary scope decision with respect to SQOFES, and with which the Department disagrees and has addressed in the January 15, 2002, Decision Memorandum in that case, no other parties filed comments on our preliminary scope decisions. Furthermore, no additional information has otherwise come to our attention to warrant a change in our preliminary decisions. Therefore, we have made no changes for purposes of the final determinations.

Period of Investigation

The period of investigation (“POI”) is October 1, 1999, through September 31, 2000.

Facts Available

In the Preliminary Determination, the Department determined that facts available was warranted in accordance with section 776(a) of the Act to calculate the dumping margin for the respondent A&D. Therefore, for the preliminary determination A&D's dumping margin was based on the simple average of the margins contained in the petition. The use of facts available was required because although A&D responded to the Department's questionnaires, it did not provide usable data for purposes of our preliminary margin analysis. See Preliminary Determination, 66 FR at 40201 (August 2, 2001).

Since the preliminary determination and prior to the verification of A&D's home market data, A&D notified the Department of its withdrawal from participation in this investigation.² section 776(a)(2) of the Act provides that “if an interested party or any other person (A) withholds information that has been requested by the {Department} under this title, (B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding under this title, or (D) provides such information but the information cannot be verified as provided in section 782(i), the {Department} shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.” Use of facts available is warranted in this case under section 776(a)(2)(C) and (D) of the Act because A&D failed to allow the Department to verify its data, thereby significantly impeding the proceeding.

Section 776(b) of the Act further provides that adverse inferences may be used when an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information. A&D decided to withdraw its participation in this investigation, thereby precluding the Department from verifying its data. On this basis the Department determined that it failed to cooperate by not acting to the best of its ability in this investigation. Thus, the Department has determined that, in selecting from among the facts otherwise available, an adverse inference is warranted and has assigned A&D an antidumping rate based on adverse inferences.

In accordance with our standard practice, we determine the margin used as adverse facts available by selecting the higher of (1) the highest margin stated in the notice of initiation, or (2) the highest margin calculated for any respondent. See e.g., Notice of Preliminary Determinations of Sales at Less Than Fair Value: Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and the Republic of South Africa, 64 FR 69718, 69722 (December 14, 1999), followed in Notice of Final Determinations of Sales at Less Than Fair Value: Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and Certain Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and the Republic of South Africa, 65 FR 25907, 25908 (May 4, 2000); see also Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod From Germany, 63 FR 10847, 10848 (March 5, 1998), followed in Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod From Germany, 63 FR 40433 (July 29, 1998). In accordance with our stated practice, in this case we applied to A&D the highest margin in the notice of initiation which was based on the petition.

Section 776(c) of the Act provides that, when the Department relies on secondary information (such as the petition) in using the facts otherwise available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The Statement of Administrative Action accompanying the URAA, H. Doc. No. 103-316 (1994) (“SAA”), states that “corroborate” means to determine that the information used has probative value. See SAA at 870.

In this case, when analyzing the petition for purposes of the initiation, the Department reviewed all of the data upon which the petitioners relied in calculating the estimated dumping margins and determined that the margins in the petition were appropriately calculated and supported by adequate evidence in accordance with the statutory requirements for initiation. In order to corroborate the petition margins for purposes of using them as adverse facts available, we examined the price and cost information provided in the petition when making our preliminary determination. For further details, see Memorandum to Louis Apple from The Team entitled “Preliminary Determination of Stainless Steel Bar from France: Use of Facts Available and Corroboration of Petition Margins,” dated July 26, 2001. Since the preliminary determination, we have received no additional information which would cause us to reconsider whether the information in the petition has probative value. Therefore, we have continued to find in the final determination that the rates contained in the petition have probative value.

In accordance with Section 776(c) of the Act, we were able to corroborate the information in the petition using information from independent sources that were reasonably at our disposal. As a result, we are assigning A&D the highest margin contained in the petition, 71.83 percent, for purposes of the final determination.

Fair Value Comparisons

To determine whether sales of stainless steel bar from France to the United States were made at less than fair value, we compared export price (“EP”) or constructed export price (“CEP”) to normal value (“NV”). Our calculations followed the methodologies described in the Preliminary Determination, except as noted below and in the January 15, 2002, Decision Memorandum, which is on file in the Import Administration's Central Records Unit (“CRU”), Room B-099 of the main Department of Commerce building.

Constructed Export Price

For all sales to the United States, we used CEP as defined in section 772(b) of the Act. We calculated CEP based on the same methodologies described in the Preliminary Determination, with the following exception:

• We treated the technical service expense as an indirect rather than as a direct selling expense.

Normal Value

We used the same methodology as that described in the Preliminary Determination to determine the cost of production and NV, with the following exceptions:

Calculation of NV

• We determined that although there are but two levels of trade (“LOT”) in the home market, each of those LOTs were different from the U.S. LOT. Therefore, we granted a CEP offset.
• We treated expenses incurred by a home market affiliate, which acted as a commission agent, as indirect selling expenses rather than direct selling expenses.
• We recalculated home market warranty expenses on a customer-specific basis rather than on a general-product basis and treated both the respondent and its affiliate's home market warranty expenses as direct selling expenses.

Currency Conversions

We made currency conversions in accordance with section 773A of the Act in the same manner as in the Preliminary Determination.

Verification

In this investigation, and in the companion SSB investigations from Germany, Italy, Korea, Taiwan, and the United Kingdom, verifications were scheduled for all responding companies during the period August through October 2001. Based on the security concerns and logistical difficulties brought about by the tragic events of September 11, for some companies in these countries we were unable to complete our verifications as scheduled. However, for these companies, we did verify major portions of the company's questionnaire responses.

While the statute at 782(i)(1) and the Department's regulations at 351.307(b)(1)(i) direct the Department to verify all information relied upon in a final determination of an investigation, the Department's verification process is akin to an “audit” and the Department has the discretion to determine the specific information it will examine in its audits. See Bomont Industries v. United States, 733 F. Supp. 1507, 1508 (CIT 1990) (comparing verification to an audit). The courts concur that verification is a spot check and it is not intended to be an exhaustive examination of the respondent's records. See Mansato v. United States, 698 F. Supp. 275, 281 (CIT 1988). Furthermore, the courts have noted that Congress has given Commerce wide latitude in formulating its verification procedures. See Micron Tech., Inc. v. United States, 117 F.3d 1386, 1396 (CAFC 1997).

In these investigations, we believe that we have met the standard for having verified the information being used in this final determination, despite our inability to complete the verifications as originally scheduled. Although the amount of information verified was less than planned in certain SSB cases, verification was conducted as scheduled in this SSB proceeding.

Based on the information verified, we are relying on the responses as submitted, subject to the minor corrections previously noted elsewhere in this notice and the Decision Memorandum.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the January 15, 2002, Decision Memorandum, which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Department's CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/​frn/​frnhome.htm. The paper copy and electronic version of the Decision Memorandum are identical in content.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing the Customs Service to continue to suspend all entries of SSB from France that are entered, or withdrawn from warehouse, for consumption on or after August 2, 2001, the date of publication of the Preliminary Determination in the Federal Register. The Customs Service shall continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the CEP, as indicated in the chart below. These instructions will remain in effect until further notice. The weighted-average dumping margins for this LTFV proceeding are as follows:

Exporter/manufacturer	Margin percentage
Aubert & Duval, S.A.	71.83
Ugine-Savoie Imphy, S.A.	3.90
All Others *	3.90
* Pursuant to section 735(c)(5)(A), we have excluded from the calculation of the all-others rate margins which are zero or de minimis, or determined entirely on facts available.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our final determination. As our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order.

This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This determination is issued and published pursuant to sections 735(d) and 777(i)(1) of the Act.

Dated: January 15, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix—Issues in Decision Memo

Comments

1. Whether to Collapse the Sales Prices and Production Costs of two Affiliates Across Countries

2. Defining Foreign Like Product for Making Product Comparisons

3. Ranking “Peeled and Descaled” as a Final Finish Characteristic

4. Assigning Total Facts Available

5. Calculating the Dumping Margin

6. Level of Trade

7. Home Market Expenses Reported In Lieu of Commissions

8. Treatment of Movement and Selling Expenses Between Home Market Affiliates as Manufacturing Costs

9. Home Market Warranty Expenses

10. Treatment of UFS/U-SF's Restructuring Costs as Selling Expenses

11. U.S. Credit Expenses for Consignment Sales

12. Whether to Include Freight Revenue in Calculation Formulas Used to Report Certain U.S. Discounts and Expenses

13. Treatment of the French Tax Provision

Footnotes

1.  The petitioners in this case are Carpenter Technology Corp., Crucible Speciality Metals, Electralloy Corp., Empire Specialty Steel Inc., Slater Steels Corp., and the United Steelworkers of America.