[Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
[Notices]
[Pages 1110-1117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-299]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-859-801]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products From Slovakia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 7, 2000.
FOR FURTHER INFORMATION CONTACT: Doug Campau or Abdelali Elouaradia, at
(202) 482-1784 or (202) 482-0498, respectively; Import Administration,
Room 1870, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230.
The Applicable Statute and Regulations
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 (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 the regulations codified at 19 CFR
part 351 (April 1999).
Preliminary Determination
We preliminarily determine that certain cold-rolled flat-rolled
carbon-quality steel products (cold-rolled steel products) from
Slovakia are being sold, or are likely to be sold, in the United States
at less than fair value (LTFV), as provided in section 733 of the Act.
The estimated margins of sales at LTFV are shown in the Suspension of
Liquidation section of this notice.
Case History
This investigation was initiated on June 21, 1999.1 See
Initiation of Antidumping Duty Investigations: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products from Argentina, Brazil, the
People's Republic of China, Indonesia, Japan, the Russian Federation,
Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela, 64 FR
34194 (June 25, 1999) (Initiation Notice). Since the initiation of the
investigation, the following events have occurred:
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\1\ The petitioners in this investigation are Bethlehem Steel
Corporation, Gulf States Steel, the Independent Steelworkers Union,
Ispat Inland Steel, LTV Steel Company Inc., National Steel
Corporation (not a petitioner in the Japan case), Steel Dynamics,
U.S. Steel Group (a unit of USX Corporation), Weirton Steel
Corporation, and United Steelworkers of America.
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On June 22 and July 29, 1999, the Department issued section A non-
market economy (NME) and market economy 2 antidumping
questionnaires, respectively, to VSZ, a.s. (VSZ), the only known
exporter of subject merchandise in Slovakia. As of the date of
initiation of this investigation, Slovakia was still considered an NME
country. On June 25, 1999, the Department received a letter from VSZ,
requesting, on behalf of the Government of Slovakia, that the
Department revoke the NME status of Slovakia under section 771(18)(A)
of the Act. On July 2, 1999, the Department initiated a formal inquiry
into Slovakia's NME status. While the Department conducted this
inquiry, VSZ voluntarily submitted responses to both the Department's
market economy questionnaire and the Department's NME questionnaire.
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\2\ Both versions of the questionnaire were issued because VSZ
had requested that the NME status of Slovakia be revoked.
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On July 16, 1999, the United States International Trade Commission
(ITC) preliminarily determined that there was a reasonable indication
that imports of the products under investigation were materially
injuring the United States industry. See Certain Cold-Rolled Steel
Products From Argentina, Brazil, China, Indonesia, Japan, Russia,
Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela:
Determinations, 64 FR 41458 (July 30, 1999).
On October 13, 1999, the Department revoked Slovakia's NME status.
See Memorandum to Robert S. LaRussa (October 13, 1999). Thereafter,
this investigation continued under the Department's market economy
procedures. See Revocation of Slovakia's Non Market Economy Status,
below.
On October 19, 1999, the Department postponed the preliminary
determination in this case for 30 days in accordance with section
733(c) of the Act and 19 CFR 351.205(b)(2). See Notice of Postponement
of Preliminary Antidumping Duty Determinations: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products from Slovakia, 64 FR 57842
(October 27, 1999). On December 6, 1999, the Department further
extended the deadline for the preliminary determination to December 28,
1999. See Notice of Postponement of Preliminary Antidumping Duty
Determinations: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel
[[Page 1111]]
Products from Slovakia, 64 FR 69491 (December 13, 1999).
On November 9, 1999, the petitioners requested that the Department
initiate a below-cost sales investigation. After examining the
petitioner's request, on November 10, 1999, the Department initiated a
below-cost sales investigation. See Memorandum from Gary Taverman to
Holly Kuga (November 10, 1999).
We issued supplemental questionnaires where appropriate. Responses
to those questionnaires were timely filed, and we have incorporated the
information provided in those responses into this preliminary
determination.
Postponement of Final Determination
Section 735(a)(2) of the Act provides that a final determination
may be postponed until not later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise, or in the event of a negative
preliminary determination, a request for such postponement is made by
the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2),
require that requests by respondents for postponement of a final
determination be accompanied by a request for extension of provisional
measures from a four-month period to not more than six months.
On October 28, 1999, VSZ requested that, in the event of an
affirmative preliminary determination in this investigation, the
Department postpone its final determination until not later than 135
days after the date of the publication of an affirmative preliminary
determination in the Federal Register. VSZ also included a request to
extend the provisional measures to not more than six months.
Accordingly, since we have made an affirmative preliminary
determination, we have postponed the final determination until not
later than 135 days after the date of the publication of the
preliminary determination.
Period of Investigation
The period of the investigation (POI) is April 1, 1998, through
March 31, 1999.
This period corresponds to the respondent's four most recent fiscal
quarters prior to the month of the filing of the petition (i.e., June
1999).
Scope of Investigation
For purposes of this investigation, the products covered are
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel
products, neither clad, plated, nor coated with metal, but whether or
not annealed, painted, varnished, or coated with plastics or other non-
metallic substances, both in coils, 0.5 inch wide or wider, (whether or
not in successively superimposed layers and/or otherwise coiled, such
as spirally oscillated coils), and also in straight lengths, which, if
less than 4.75 mm in thickness having a width that is 0.5 inch or
greater and that measures at least 10 times the thickness; or, if of a
thickness of 4.75 mm or more, having a width exceeding 150 mm and
measuring at least twice the thickness. The products described above
may be rectangular, square, circular or other shape and include
products of either rectangular or non-rectangular cross-section where
such cross-section is achieved subsequent to the rolling process (i.e.,
products which have been ``worked after rolling'')--for example,
products which have been beveled or rounded at the edges.
Specifically included in this scope are vacuum degassed, fully
stabilized (commonly referred to as interstitial-free (IF)) steels,
high strength low alloy (HSLA) steels, and motor lamination steels. IF
steels are recognized as low carbon steels with micro-alloying levels
of elements such as titanium and/or niobium added to stabilize carbon
and nitrogen elements. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium,
titanium, vanadium, and molybdenum. Motor lamination steels contain
micro-alloying levels of elements such as silicon and aluminum.
Steel products included in the scope of this investigation,
regardless of definitions in the Harmonized Tariff Schedules of the
United States (HTSUS), are products in which: (1) Iron predominates, by
weight, over each of the other contained elements; (2) the carbon
content is 2 percent or less, by weight, and; (3) none of the elements
listed below exceeds the quantity, by weight, respectively indicated:
1.80 percent of manganese, or
2.25 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium (also called columbium), or
0.15 percent of vanadium, or
0.15 percent of zirconium.
All products that meet the written physical description, and in
which the chemistry quantities do not exceed any one of the noted
element levels listed above, are within the scope of this investigation
unless specifically excluded. The following products, by way of
example, are outside and/or specifically excluded from the scope of
this investigation:
SAE grades (formerly also called AISI grades) above 2300;
Ball bearing steels, as defined in the HTSUS;
Tool steels, as defined in the HTSUS;
Silico-manganese steel, as defined in the HTSUS;
Silicon-electrical steels, as defined in the HTSUS, that are
grain-oriented;
Silicon-electrical steels, as defined in the HTSUS, that are
not grain-oriented and that have a silicon level exceeding 2.25
percent;
All products (proprietary or otherwise) based on an alloy ASTM
specification (sample specifications: ASTM A506, A507);
Silicon-electrical steels, as defined in the HTSUS, that are
not grain-oriented and that have a silicon level less than 2.25
percent, and
(a) fully-processed, with a core loss of less than 0.14 watts/pound
per mil (.001 inches), or
(b) semi-processed, with core loss of less than 0.085 watts/pound
per mil (.001 inches);
Certain shadow mask steel, which is aluminum killed cold-
rolled steel coil that is open coil annealed, has an ultra-flat,
isotropic surface, and which meets the following characteristics:
Thickness: 0.001 to 0.010 inches
Width: 15 to 32 inches
Chemical Composition
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Element................................................ C
Weight %............................................... <0.002% ------------------------------------------------------------------------="" [[page="" 1112]]=""> Certain flapper valve steel, which is hardened and tempered,
surface polished, and which meets the following characteristics:
Thickness: 1.0 mm
Width: 152.4 mm
Chemical Composition
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Element........................... C Si Mn P S
Weight %.......................... 0.90-1.05 0.15-0.35 0.30-0.50 0.03 0.006
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Mechanical Properties
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Tensile Strength....................... 162 Kgf/mm2
Hardness............................... 475 Vickers hardness
number
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Physical Properties
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Flatness............................... <0.2% of="" nominal="" strip="" width="" ------------------------------------------------------------------------="" microstructure:="" completely="" free="" from="" decarburization.="" carbides="" are="" spheroidal="" and="" fine="" within="" 1%="" to="" 4%="" (area="" percentage)="" and="" are="" undissolved="" in="" the="" uniform="" tempered="" martensite.="" non-metallic="" inclusion="" ------------------------------------------------------------------------="" area="" percentage="" ------------------------------------------------------------------------="" sulfide="" inclusion.......................................="">0.0
4%
Oxide Inclusion......................................... 0.0
5%
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Compressive Stress: 10 to 40 Kgf/mmT22.
Surface Roughness
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Roughness
Thickness (mm) (m)
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t0.209....................................... Rz0
.5
0.209<>0.310................................. Rz0
.6
0.310<>0.440................................. Rz0
.7
0.440<>0.560................................. Rz0
.8
0.5601
.0
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Certain ultra thin gauge steel strip, which meets the
following characteristics:
Thickness: 0.100 mm 7%
Width: 100 to 600 mm
Chemical Composition
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Element........................ C Mn P S Al Fe
Weight %....................... 0.07 0.2-0.5 0.05 0.05 0.07 Balance
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Mechanical Properties
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Hardness............................... Full Hard (Hv 180 minimum)
Total Elongation....................... <3% tensile="" strength.......................="" 600="" to="" 850="">2
------------------------------------------------------------------------
Physical Properties
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------------------------------------------------------------------------
Surface Finish......................... 0.3 micron
Camber (in 2.0 m)...................... <3.0 mm="" flatness="" (in="" 2.0="" m)....................="">0.5 mm
Edge Burr.............................. <0.01 mm="" greater="" than="" thickness="" coil="" set="" (in="" 1.0="" m)....................=""><75.0 mm="" ------------------------------------------------------------------------=""> Certain silicon steel, which meets the following
characteristics:
Thickness: 0.024 inches .0015 inches
Width: 33 to 45.5 inches
[[Page 1113]]
Chemical Composition
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Element........................ C Mn P S Si Al
Min. Weight %.................. ................... .................. .................. .................. 0.65 ..................
Max. Weight %.................. 0.004 0.4 0.09 0.009 .................. 0.4
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Mechanical Properties
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Hardness............................... B 60-75 (AIM 65)
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Physical Properties
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Finish................................. Smooth (30-60 microinches)
Gamma Crown (in 5 inches).............. 0.0005 inches, start measuring
\1/4\ inch from slit edge
Flatness............................... 20 I-UNIT max.
Coating................................ C3A-.08A max. (A2 coating
acceptable)
Camber (in any 10 feet)................ \1/16\ inch
Coil Size I.D.......................... 20 inches
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Magnetic Properties
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Core Loss (1.5T/60 Hz) NAAS............ 3.8 Watts/Pound max.
Permeability (1.5T/60 Hz) NAAS......... 1700 gauss/oersted typical 1500
minimum
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Certain aperture mask steel, which has an ultra-flat surface
flatness and which meets the following characteristics:
Thickness: 0.025 to 0.245 mm
Width: 381-1000 mm
Chemical Composition
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Element............................. C N Al
Weight %............................ <0.01 0.004="" to="" 0.007=""><0.007 ----------------------------------------------------------------------------------------------------------------=""> Certain tin mill black plate, annealed and temper-rolled,
continuously cast, which meets the following characteristics:
Chemical Composition
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Element...................... C Mn P S Si Al As Cu B N
Min. Weight %................ 0.02 0.20 .......... ........ .......... 0.03 .......... .......... .......... 0.003
Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 .......... 0.008 (Aiming
(Aiming (Aiming 0.005)
0.018 0.05)
Max.)
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Non-metallic Inclusions: Examination with the S.E.M. shall not
reveal individual oxides >1 micron (0.000039 inches) and inclusion
groups or clusters shall not exceed 5 microns (0.000197 inches) in
length.
Surface Treatment as follows:
The surface finish shall be free of defects (digs, scratches, pits,
gouges, slivers, etc.) and suitable for nickel plating.
Surface Finish
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Roughness, RA Microinches (Micrometers)
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Aim Min. Max.
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Extra Bright........................ 5 (0.1) 0 (0) 7 (0.2)
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Certain full hard tin mill black plate, continuously cast,
which meets the following characteristics:
Chemical Composition
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Element...................... C Mn P S Si Al As Cu B N
Min. Weight %................ 0.02 0.20 .......... ........ .......... 0.03 .......... .......... .......... 0.003
Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 .......... 0.008
(Aiming (Aiming (Aiming
0.018 0.05) 0.005)
Max.)
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Non-metallic Inclusions: Examination with the S.E.M. shall not
reveal individual oxides >1 micron (0.000039 inches) and inclusion
groups or clusters shall not exceed 5 microns (0.000197 inches) in
length.
[[Page 1114]]
Surface Treatment as follows:
The surface finish shall be free of defects (digs, scratches, pits,
gouges, slivers, etc.) and suitable for nickel plating.
Surface Finish
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Roughness, RA Microinches (Micrometers)
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Aim Min. Max
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Stone Finish........................ 16 (0.4) 8 (0.2) 24 (0.6)
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Certain ``blued steel'' coil (also know as ``steamed blue
steel'' or ``blue oxide'') with a thickness and size of 0.38 mm x 940
mm x coil, and with a bright finish;
Certain cold-rolled steel sheet, which meets the following
characteristics:
Thickness (nominal): 0.019 inches
Width: 35 to 60 inches
Chemical Composition
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Element............................. C 0 B
Max. Weight %....................... 0.004 ....................... .......................
Min. Weight %....................... ........................ 0.010 0.012
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Certain band saw steel, which meets the following
characteristics:
Thickness: 1.31 mm
Width: 80 mm
Chemical Composition
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Element........................ C Si Mn P S Cr Ni
Weight %....................... 1.2 to 1.3 0.15 to 0.35 0.20 to 0.35 0.03 0.007 0.3 to 0.5 0.25
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Other properties:
Carbide: fully spheroidized having > 80% of carbides, which are
0.003 mm and uniformly dispersed
Surface finish: bright finish free from pits, scratches, rust,
cracks, or seams
Smooth edges
Edge camber (in each 300 mm of length): 7 mm arc height
Cross bow (per inch of width): 0.015 mm max.
The merchandise subject to this investigation is typically
classified in the HTSUS at subheadings: 7209.15.0000, 7209.16.0030,
7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090,
7209.18.1530, 7209.18.1560, 7209.18.2550, 7209.18.6000, 7209.25.0000,
7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000,
7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500,
7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030, 7211.29.2090,
7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 7212.40.1000,
7212.40.5000, 7212.50.0000, 7225.19.0000, 7225.50.6000, 7225.50.7000,
7225.50.8010, 7225.50.8085, 7225.99.0090, 7226.19.1000, 7226.19.9000,
7226.92.5000, 7226.92.7050, 7226.92.8050, and 7226.99.0000.
Although the HTSUS subheadings are provided for convenience and
United States Customs Service (U.S. Customs) purposes, the written
description of the merchandise under investigation is dispositive.
The Department set aside a period for all interested parties to
raise issues regarding product coverage. From July through October
1999, the Department received responses from a number of parties
including importers, respondents, consumers, and petitioners, aimed at
clarifying the scope of the investigation. See Memorandum to Joseph A.
Spetrini (Scope Memorandum), dated November 1, 1999, for a list of all
persons submitting comments and a discussion of all scope comments.
There are several scope exclusion requests for products which are
currently covered by the scope of this investigation that are still
under consideration by the Department. These items are considered to be
within the scope for this preliminary determination; however, these
requests will be reconsidered for the final determination. See Scope
Memorandum.
Product Comparisons
In accordance with section 771(16) of the Act, all products
produced by the respondent covered by the description in the Scope of
Investigation section, above, and sold in Slovakia during the POI, are
considered to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. We have relied on 14
criteria to match U.S. sales of subject merchandise to comparison-
market sales of the foreign like product: hardening and tempering,
paint, carbon level, quality, yield strength, minimum thickness,
thickness tolerance, width, edge finish, form, temper rolling,
leveling, annealing, and surface finish. These characteristics have
been weighted by the Department, where appropriate. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the next most similar foreign like
product on the basis of the characteristics as listed above.
Revocation of Slovakia's Non-Market Economy Status
In determining whether to revoke NME-country status under section
771(18)(A) of the Act, the Department must take into account the
following factors under section 771(18)(B): (1) The extent to which the
currency of the foreign country is convertible into the currency of
other countries; (2) the extent to which wage rates in the foreign
country are determined by free
[[Page 1115]]
bargaining between labor and management; (3) the extent to which joint
ventures or other investments by firms of other foreign countries are
permitted in the foreign country; (4) the extent of government
ownership or control of the means of production; (5) the extent of
government control over the allocation of resources and over the price
and output decisions of enterprises; and (6) such other factors as the
administrating authority considers appropriate.
Since its emergence as an independent, democratic state, Slovakia
has made significant progress in its transformation into a market
economy country. The Slovak currency is now fully convertible. Wages in
Slovakia are largely determined by free bargaining between labor and
management. Trade has been liberalized and tariffs reduced, and the
Slovak government is actively promoting foreign investment and business
ventures. Industry, agriculture and services have all been privatized,
and the power to make decisions related to the allocation of resources,
and over pricing and output decisions, now rests with the private
sector. Based on the preponderance of evidence related to economic
reforms in Slovakia, analyzed as required under section 771(18)(B) of
the Act, the Department revoked Slovakia's NME country status,
effective January 1, 1998. See Memorandum to Robert S. LaRussa (October
13, 1999).
Fair Value Comparisons
To determine whether sales of cold-rolled steel products from
Slovakia were made in the United States at LTFV, we compared the export
price (EP) to the normal value (NV), as described in the Export Price
and Normal Value sections of this notice, below. In accordance with
section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs
for comparison to weighted-average NVs.
Export Price
In accordance with section 772 of the Act, we calculated an EP for
each sale. Section 772(a) of the Act defines EP as the price at which
the subject merchandise is first sold or offered for sale, before the
date of importation by the exporter or producer outside of the United
States, to an unaffiliated purchaser in the United States or to an
unaffiliated purchaser for exportation to the United States. Consistent
with this definition, we have found that VSZ made only EP sales during
the POI.
We calculated EP based on cost and freight (C&R) packed prices
charged to the first unaffiliated customer in the United States. In
accordance with section 772(c)(2) of the Act, we made deductions from
the starting price, where appropriate, for movement expenses, including
foreign inland freight and inland insurance for shipment from the mill
to the port of export, foreign warehousing expenses, and ocean freight.
We added interest revenue to the starting price for sales that had been
paid late and for which the respondent collected actual interest
revenue. See Preliminary Calculation Memorandum (December 28, 1999).
We note that, according to VSZ's reported data, certain of VSZ's
U.S. sales were unpaid as of the date of this preliminary
determination. Petitioners asserted that all of VSZ's unpaid sales
should be treated as bad debt and, therefore, that the Department
should treat such unpaid sales amounts as a direct selling expense. VSZ
claims that it is still negotiating the payment of all reported sales,
and because, as specified in its financial statement, the sales have
not been written off, it would be inappropriate to treat the amount of
the sales as direct selling expenses.
We have preliminarily accepted VSZ's claim that it has not written
off the amounts due on any of the U.S. sales. We have, however,
recalculated the imputed credit expenses for U.S. sales for which
payment had not yet been received by setting the date of payment equal
to the date of signature of this preliminary determination. We intend
to examine this issue closely at verification.
Normal Value
A. Selection of Comparison Market
Section 773(a)(1) of the Act directs that NV be based on the price
at which the foreign like product is sold in the home market, provided
that the merchandise is sold in sufficient quantities (or value, if
quantity is inappropriate), and that there is no particular market
situation that prevents a proper comparison with the EP. The statute
contemplates that quantities (or value) will normally be considered
insufficient if they are less than five percent of the aggregate
quantity (or value) of sales of the subject merchandise to the United
States.
VSZ had a viable home market for cold-rolled steel products, and
reported home market sales data for purposes of the calculation of NV.
In deriving NV, we made certain adjustments as detailed in the
Calculation of Normal Value Based on Home-Market Prices and Calculation
of Normal Value Based on Constructed Value sections of this notice,
below.
B. Cost of Production Analysis
As noted above, on November 8, 1999, petitioners filed a below-cost
sales allegation against VSZ. After analyzing the allegation, in
accordance with section 773(b)(2)(A)(i) of the Act, we found reasonable
grounds to believe or suspect that VSZ's sales of cold-rolled steel
products in Slovakia were made at prices below the COP. See Memorandum
from Gary Taverman to Holly Kuga (November 10, 1999). As a result, the
Department conducted an investigation to determine whether VSZ made
home market sales during the POI at prices below their respective COPs,
within the meaning of section 773(b) of the Act.
1. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated a
weighted-average COP based on the sum of VSZ's costs of materials and
fabrication for the foreign like product, plus amounts for general and
administrative expenses (G&A), selling expenses, commissions, packing
expenses and interest expenses. We relied on the COP data submitted by
VSZ in its cost questionnaire response.
2. Test of Home-Market Sales Prices
We compared the weighted-average COP for VSZ to home market sales
of the foreign like product, as required under section 773(b) of the
Act, in order to determine whether these sales had been made at prices
below the COP within an extended period of time (i.e., a period of one
year) in substantial quantities 3 and whether such prices
were sufficient to permit the recovery of all costs within a reasonable
period of time. On a model-specific basis, we compared the revised COP
to the home market prices, less any applicable movement charges,
discounts and rebates.
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\3\ In accordance with section 773(b)(2)(C)(i) of the Act, we
determined that sales made below the COP were made in substantial
quantities if the volume of such sales represented 20 percent or
more of the volume of sales under consideration for the
determination of NV.
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3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given product were at prices less
than the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of a respondent's
sales of a given product during the POI were at prices less than the
COP, we determined such sales to have been made in ``substantial
quantities'' within
[[Page 1116]]
an extended period of time in accordance with section 773(b)(2)(B) of
the Act. In such cases, because we compared prices to POI average
costs, we also determined that such sales were not made at prices that
would permit recovery of all costs within a reasonable period of time,
in accordance with section 773(b)(2)(D) of the Act. We therefore
disregarded these below-cost sales and used the remaining sales as the
basis for determining NV, in accordance with section 773(b)(1) of the
Act. For those U.S. sales of cold-rolled steel products for which there
were no comparable home-market sales in the ordinary course of trade,
we compared EPs to CV in accordance with section 773(a)(4) of the Act.
See Calculation of Normal Value Based on Constructed Value, below.
C. Calculation of Normal Value Based on Home-Market Prices
We performed price-to-price comparisons where there were sales of
comparable merchandise in the home market that did not fail the cost
test.
We calculated NV based on ex-factory prices and made deductions
from the starting price, where appropriate, for inland freight. In
addition, we made circumstance-of-sale (COS) adjustments for direct
expenses, where appropriate, in accordance with section
773(a)(6)(C)(iii) of the Act. These included imputed credit expenses,
warranty expenses, and other direct selling expenses. We recalculated
the imputed credit expenses for U.S. sales for which payment had not
yet been received by setting the date of payment equal to the date of
signature of this preliminary determination. See Preliminary
Calculation Memorandum (December 28, 1999). We also made adjustments to
the starting price for discounts and rebates.
In accordance with sections 773(a)(6)(A) and (B) of the Act, we
deducted home market packing costs and added U.S. packing costs.
D. Calculation of Normal Value Based on Constructed Value
Section 773(a)(4) of the Act provides that, where NV cannot be
based on comparison-market sales, NV may be based on CV. Accordingly,
for those models of cold-rolled steel products for which we could not
determine the NV based on comparison-market sales, either because there
were no sales of a comparable product or all sales of the comparison
products failed the COP test, we based NV on CV.
Section 773(e) of the Act provides that CV shall be based on the
sum of the respondent's cost of materials, fabrication, selling,
general and administrative (SG&A) expenses and profit. In accordance
with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit
on the amounts incurred and realized in connection with the production
and sale of the foreign like product in the ordinary course of trade,
for consumption in the foreign country. In addition, we relied on U.S.
packing costs as described in the Export Price section of this notice,
above.
We made adjustments to CV for differences in COS in accordance with
section 773(a)(8) of the Act and 19 CFR 351.410. These involved the
deduction of direct selling expenses incurred on home market sales
from, and the addition of U.S. direct selling expenses to, CV.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (LOT) as the EP transaction. The normal-value
LOT is that of the starting-price sales in the comparison market or,
when NV is based on CV, that of the sales from which we derive SG&A
expenses and profit. The U.S. LOT for EP sales is also the level of the
starting-price sale, which is usually from exporter to importer.
To determine whether NV sales are at a different LOT than EP, we
examine stages in the marketing process and selling functions along the
chain of distribution between the producer and the unaffiliated
customer. If the comparison-market sales are at a different LOT and the
difference affects price comparability, as manifested in a pattern of
consistent price differences between the sales on which NV is based and
comparison-market sales at the LOT of the export transaction, we make a
level-of-trade adjustment under section 773(a)(7)(A) of the Act. See
Notice of Final Determination of Sales at Less Than Fair Value: Certain
Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731
(November 19, 1997).
In implementing these principles in this investigation, we obtained
information from VSZ about the marketing stages involved in the
reported United States and home market sales, including a description
of the selling activities performed by VSZ for each channel of
distribution. In identifying LOTs for EP and home market sales, we
considered the selling functions reflected in the starting price before
any adjustments.
VSZ claimed to have two LOTs in the NV market and one LOT in the
U.S. market. We examined VSZ's distribution system, including selling
functions, classes of customers, and selling expenses. We found that
the selling functions--which included warranty, freight, processing of
sales documents, and technical advice--were sufficiently similar in the
United States and home markets to establish a single, same level of
trade in both markets. It was thus unnecessary, for this preliminary
determination, to make any level-of-trade adjustment for comparison of
EP and normal value.
Currency Conversions
We made currency conversions into United States dollars in
accordance with section 773A(a) of the Act based on exchange rates in
effect on the dates of the United States sales, as certified by the Dow
Jones Business Information Services.
Verification
In accordance with section 782(i) of the Act, we intend to verify
all information relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing
Customs to suspend liquidation of all entries of cold-rolled steel
products from Slovakia, that are entered, or withdrawn from warehouse,
for consumption on or after the date of publication of this notice in
the Federal Register. We are also instructing Customs to require a cash
deposit or the posting of a bond equal to the weighted-average amount
by which the NV exceeds the EP, as indicated in the chart below. These
instructions suspending liquidation will remain in effect until further
notice.
The weighted-average dumping margins are provided below.
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
VSZ..................................................... 32.83
All others.............................................. 32.83
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final antidumping determination is
affirmative, the ITC will determine whether these imports are
materially injuring, or threaten material injury to, the United States
industry. The deadline for that ITC determination would be the later of
120 days after the date of these preliminary
[[Page 1117]]
determination or 45 days after the date of our final determination.
Public Comment
Case briefs for this investigation must be submitted no later than
one week after the issuance of the verification reports. Rebuttal
briefs must be filed within five days after the deadline for submission
of case briefs. A list of authorities used, a table of contents, and an
executive summary of issues should accompany any briefs submitted to
the Department. Executive summaries should be limited to five pages
total, including footnotes.
Section 774 of the Act provides that the Department will hold a
hearing to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs, provided that such a
hearing is requested by any interested party. If a request for a
hearing is made in an investigation, the hearing will tentatively be
held two days after the deadline for submission of the rebuttal briefs,
at the US Department of Commerce, 14th Street and Constitution Avenue,
NW, Washington, D.C. 20230. In the event that the Department receives
requests for hearings from parties to several cold-rolled cases, the
Department may schedule a single hearing to encompass all those cases.
Parties should confirm by telephone the time, date, and place of the
hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request within 30 days of
the publication of this notice. Requests should specify the number of
participants and provide a list of the issues to be discussed. Oral
presentations will be limited to issues raised in the briefs.
If this investigation proceeds normally, we will make our final
determination no later than 135 days after the date of publication of
this notice in the Federal Register.
This determination is issued and published pursuant to sections
733(d) and 777(i)(1) of the Act.
Dated: December 28, 1999.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-299 Filed 1-6-00; 8:45 am]
BILLING CODE 3510-DS-P
