98-5598. Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Stainless Steel Wire Rod From Italy  

  • [Federal Register Volume 63, Number 43 (Thursday, March 5, 1998)]
    [Notices]
    [Pages 10831-10835]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-5598]
    
    
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    DEPARTMENT OF COMMERCE
    
    International Trade Administration
    [A-475-820]
    
    
    Notice of Preliminary Determination of Sales at Less Than Fair 
    Value and Postponement of Final Determination: Stainless Steel Wire Rod 
    From Italy
    
    AGENCY: Import Administration, International Trade Administration, 
    Department of Commerce.
    
    EFFECTIVE DATE: March 5, 1998.
    
    FOR FURTHER INFORMATION CONTACT: Shawn Thompson, Import Administration, 
    International Trade Administration, U.S. Department of Commerce, 14th 
    Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
    (202) 482-1776.
    
    The Applicable Statute
    
        Unless otherwise indicated, all citations to the Tariff Act of 
    1930, as amended (the Act), are references to the provisions effective 
    January 1, 1995, the effective date of the amendments made to the Act 
    by the Uruguay Round Agreements Act (URAA). In addition, unless 
    otherwise indicated, all citations to the Department's regulations are 
    to the regulations at 19 CFR part 351, 62 FR 27296 (May 19, 1997).
    
    Preliminary Determination
    
        We preliminarily determine that stainless steel wire rod (SSWR) 
    from Italy is being, or is 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
    
        Since the initiation of this investigation (Notice of Initiation of 
    Antidumping Investigations: Stainless Steel Wire Rod from Germany, 
    Italy, Japan, Korea, Spain, Sweden, and Taiwan, 62 FR 45224 (August 26, 
    1997)), the following events have occurred:
        During August and September 1997, the Department obtained 
    information from the U.S. Embassy in Italy identifying potential 
    producers and/or exporters of the subject merchandise to the United 
    States. Based on this information, in September 1997, the Department 
    issued antidumping questionnaires to the following companies: 
    Acciaierie Valbruna S.r.l. (including its subsidiary Acciaierie di 
    Bolzano SpA) (collectively ``Valbruna''), Cogne Acciai Speciali S.r.l. 
    (CAS), and Rodacciai SpA (Rodacciai).
        Also in September 1997, the United States International Trade 
    Commission (ITC) issued an affirmative preliminary injury determination 
    in this case (see ITC Investigation No. 731-TA-770).
        In October 1997, the Department received responses to Section A of 
    the questionnaire from CAS, Rodacciai, and Valbruna. In its response, 
    Rodacciai requested that it not be required to complete the remainder 
    of the questionnaire because it sold only a small volume of SSWR to the 
    United States during the period of investigation (POI). Based on this 
    claim and because the petitioners did not object, we instructed this 
    company that it did not have to respond to the remainder of the 
    questionnaire, in accordance with 19 CFR 351.204(c).
        In November 1997, CAS and Valbruna (hereinafter ``the 
    respondents'') submitted responses to sections B and C of the 
    questionnaire.
        On December 4, 1997, the petitioners submitted a timely allegation 
    pursuant to section 773(b) of the Act that CAS had made sales in the 
    home market at prices below the cost of production (COP). Based on our 
    analysis of this allegation, we initiated a COP investigation with 
    respect to CAS and informed this company that it needed to complete 
    section D of the questionnaire.
        On December 11, 1997, pursuant to section 733(c)(1)(A) of the Act, 
    the petitioners made a timely request to postpone the preliminary 
    determination. On December 16, 1997, we granted this request and 
    postponed the preliminary determination until no later than February 
    25, 1998 (62 FR 66849, Dec. 22, 1997).
        We issued supplemental questionnaires to the respondents in 
    December 1997 and received responses to these questionnaires in January 
    1998. We also received a response to section D of the questionnaire 
    from CAS in January 1998.
        Pursuant to section 735(a)(2)(A) of the Act, on February 11 and 12, 
    1998, the respondents requested that, in the event of an affirmative 
    preliminary determination in this investigation, the Department 
    postpone its final determination until no later than 135 days after the 
    publication of this notice in the Federal Register and extend the 
    provisional measures pursuant to section 733(d) of the Act from four 
    months to not more than six months. For further discussion, see the 
    ``Postponement of Final Determination and Extension of Provisional 
    Measures'' section of this notice.
        In February 1998, we issued additional supplemental sales 
    questionnaires to both respondents and a supplemental cost 
    questionnaire to CAS. Also in February 1998, both respondents submitted 
    revised sales listings which contained data that they corrected for 
    minor input errors. Although this data was received too late for use in 
    the preliminary determination, we will consider it for purposes of the 
    final determination.
    
    Postponement of Final Determination and Extension of Provisional 
    Measures
    
        On February 11 and 12, 1998, the respondents requested that, in the 
    event of an affirmative preliminary determination in this 
    investigation, the Department postpone its final determination until no 
    later than 135 days after the publication of this notice in the Federal 
    Register, pursuant to section 735(a)(2)(A) of the Act. The respondents 
    also requested that the Department extend the provisional measures 
    pursuant to section 733(d) of the Act from four months to not more than 
    six months. In accordance with 19 CFR 351.210(e), because: (1) Our 
    preliminary determination is affirmative; (2) The respondents account 
    for a significant proportion of exports of the subject merchandise; (3) 
    No compelling reasons for denial exist; and (4) Respondents have 
    requested an extension of provisional measures, we are granting this 
    request and are postponing the final determination until no later than 
    135 days after the publication of this notice in the Federal Register. 
    Suspension of liquidation will be extended accordingly.
    
    [[Page 10832]]
    
    Scope of Investigation
    
        For purposes of this investigation, SSWR comprises products that 
    are hot-rolled or hot-rolled annealed and/or pickled and/or descaled 
    rounds, squares, octagons, hexagons or other shapes, in coils, that may 
    also be coated with a lubricant containing copper, lime or oxalate. 
    SSWR is made of alloy steels containing, by weight, 1.2 percent or less 
    of carbon and 10.5 percent or more of chromium, with or without other 
    elements. These products are manufactured only by hot-rolling or hot-
    rolling, annealing, and/or pickling and/or descaling, are normally sold 
    in coiled form, and are of solid cross-section. The majority of SSWR 
    sold in the United States is round in cross-sectional shape, annealed 
    and pickled, and later cold-finished into stainless steel wire or 
    small-diameter bar.
        The most common size for such products is 5.5 millimeters or 0.217 
    inches in diameter, which represents the smallest size that normally is 
    produced on a rolling mill and is the size that most wire-drawing 
    machines are set up to draw. The range of SSWR sizes normally sold in 
    the United States is between 0.20 inches and 1.312 inches diameter. Two 
    stainless steel grades, SF20T and K-M35FL, are excluded from the scope 
    of the investigation. The chemical makeup for the excluded grades is as 
    follows:
    
    ----------------------------------------------------------------------------------------------------------------
                                                                                                                    
    ----------------------------------------------------------------------------------------------------------------
                                                          SF20T                                                     
    ----------------------------------------------------------------------------------------------------------------
    Carbon............................  0.05 max.............  Chromium.............  19.00/21.00.                  
    Manganese.........................  2.00 max.............  Molybdenum...........  1.50/2.50.                    
    Phosphorous.......................  0.05 max.............  Lead.................  Added (0.10/0.30).            
    Sulfur............................  0.15 max.............  Tellurium............  Added (0.03 min).             
    Silicon...........................  1.00 max                                                                    
    ----------------------------------------------------------------------------------------------------------------
                                                         K-M35FL                                                    
    ----------------------------------------------------------------------------------------------------------------
    Carbon............................  0.015 max............  Nickel...............  0.30 max.                     
    Silicon...........................  0.70/1.00............  Chromium.............  12.50/14.00.                  
    Manganese.........................  0.40 max.............  Lead.................  0.10/0.30.                    
    Phosphorous.......................  0.04 max.............  Aluminum.............  0.20/0.35.                    
    Sulfur............................  0.03 max                                                                    
    ----------------------------------------------------------------------------------------------------------------
    
        The products under investigation are currently classifiable under 
    subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 
    7221.00.0075 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.
    
    Period of Investigation
    
        The POI is July 1, 1996, through June 30, 1997.
    
    Fair Value Comparisons
    
        To determine whether sales of SSWR from Italy to the United States 
    were made at less than fair value, 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. As discussed in the 
    ``Export Price'' section of this notice, neither respondent made 
    Constructed Export Price (CEP) sales to the United States. In 
    accordance with section 777A(d)(1)(A)(i) of the Act, we calculated 
    weighted-average EPs for comparison to weighted-average NVs.
        On January 8, 1998, the Court of Appeals for the Federal Circuit 
    issued a decision in CEMEX v. United States, 1998 WL 3626 (Fed Cir.). 
    In that case, based on the pre-URAA version of the Act, the Court 
    discussed the appropriateness of using constructed value (CV) as the 
    basis for foreign market value when the Department finds home market 
    sales to be outside the ``ordinary course of trade.'' This issue was 
    not raised by any party in this proceeding. However, the URAA amended 
    the definition of sales outside the ``ordinary course of trade'' to 
    include sales below cost. See Section 771(15) of the Act. Consequently, 
    the Department has reconsidered its practice in accordance with this 
    court decision and has determined that it would be inappropriate to 
    resort directly to CV, in lieu of foreign market sales, as the basis 
    for NV if the Department finds foreign market sales of merchandise 
    identical or most similar to that sold in the United States to be 
    outside the ``ordinary course of trade.'' Instead, the Department will 
    use sales of similar merchandise, if such sales exist. The Department 
    will use CV as the basis for NV only when there are no above-cost sales 
    that are otherwise suitable for comparison. Therefore, in this 
    proceeding, when making comparisons in accordance with section 771(16) 
    of the Act, we considered all products sold in the home market as 
    described in the ``Scope of Investigation'' section of this notice, 
    above, that were in the ordinary course of trade for purposes of 
    determining appropriate product comparisons to U.S. sales. Where there 
    were no sales of identical merchandise in the home 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, based on the characteristics listed in 
    Sections B and C of our antidumping questionnaire. We have implemented 
    the Court's decision in this case, to the extent that the data on the 
    record permitted.
        In instances where a respondent has reported a non-AISI grade (or 
    an internal grade code) for a product that falls within a single AISI 
    category, we have used the actual AISI grade rather than the non-AISI 
    grade reported by the respondents for purposes of our analysis. 
    However, in instances where the chemical content ranges of reported 
    non-AISI (or an internal grade code) grades are outside the parameters 
    of an AISI grade, we have preliminarily used the grade code reported by 
    the respondents for analysis purposes. We intend to examine this issue 
    further for the final determination.
        In certain instances, CAS did not provide sufficient information to 
    determine what constituted the next most similar foreign like product. 
    In those situations, we based NV on CV for the preliminary 
    determination. We have issued a supplemental questionnaire to CAS in 
    order to collect the information necessary to make price-to-price 
    comparisons whenever possible for purposes of the final determination.
        In addition, Valbruna defined particular models of SSWR (i.e., 
    control numbers) using the four product characteristics specified in 
    the questionnaire as well as a fifth characteristic, shape. The 
    Department's
    
    [[Page 10833]]
    
    practice in past steel cases has been to require respondents to assign 
    control numbers using only the product characteristics requested by the 
    Department. See Certain Cut-To-Length Carbon Steel Plate From Finland: 
    Final Results of Antidumping Duty Administrative Review, 61 FR 2792, 
    2795 (Jan. 29, 1996). Therefore, we have revised the reported control 
    numbers so as not to distinguish individual shapes of SSWR because we 
    did not identify this characteristic specifically in the questionnaire. 
    We recomputed the costs used in Valbruna's difference-in-merchandise 
    adjustments (difmers) accordingly.
    
    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 as the EP or CEP. The NV level of trade 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 selling, general 
    and administrative expenses (SG&A) and profit. For EP, the U.S. level 
    of trade is also the level of the starting-price sale, which is usually 
    from exporter to importer. For CEP, it is the level of the constructed 
    sale from the exporter to the importer.
        To determine whether NV sales are at a different level of trade 
    than EP (or CEP) sales, we examine stages in the marketing process and 
    selling functions along the chain of distribution between the producer 
    and the unaffiliated customer. If the comparison-market sales are at a 
    different level of trade and the difference affects price 
    comparability, as manifested in a pattern of consistent price 
    differences between the sales on which NV is based and comparison-
    market sales at the level of trade of the export transaction, we make a 
    level-of-trade adjustment under section 773(a)(7)(A) of the Act. 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 (Nov. 
    19, 1997).
        Neither CAS nor Valbruna claimed a level-of-trade adjustment. 
    Nevertheless, we evaluated whether such an adjustment was necessary by 
    examining each respondent's distribution system, including selling 
    functions, classes of customers, and selling expenses. We found that 
    the selling functions performed by each respondent, which included 
    sales administration and billing, provision of warranty services, and 
    in some cases arranging freight services, are sufficiently similar in 
    the U.S. and the home markets to consider them as constituting the same 
    level of trade in the two markets. Accordingly, all comparisons are at 
    the same level of trade and an adjustment pursuant to section 
    773(a)(7)(A) of the Act is not warranted. See Memorandum regarding 
    Level of Trade Analysis from the Team to the File, dated February 25, 
    1998.
    
    Export Price
    
        For both respondents, we used EP methodology, in accordance with 
    section 772(a) of the Act, because the subject merchandise was sold 
    directly to the first unaffiliated purchaser in the United States prior 
    to importation and CEP methodology was not otherwise indicated.
        We made company-specific adjustments as follows:
    
    A. CAS
    
        We calculated EP based on packed, delivered prices to unaffiliated 
    purchasers in the United States. We made deductions from the starting 
    price, where appropriate, for foreign inland freight, international 
    freight, marine insurance, U.S. customs duties, and U.S. brokerage and 
    handling expenses, pursuant to section 772(c)(2)(A) of the Act.
        CAS failed to report U.S. customs duties and U.S. brokerage and 
    handling expenses for certain U.S. sales. Therefore, we find that the 
    application of facts available is warranted. Additionally, we find that 
    CAS failed to act to the best of its ability in reporting these U.S. 
    expenses and, accordingly, we based the amount of these expenses on 
    adverse facts available. As adverse facts available, we used the 
    highest duty and brokerage amount reported for any of CAS's other U.S. 
    sales.
    
    B. Valbruna
    
        We calculated EP based on packed prices to unaffiliated purchasers 
    in the United States. We made deductions from the starting price, where 
    appropriate, for international freight (including foreign inland 
    freight, ocean freight, and marine insurance), U.S. customs duties, 
    harbor maintenance and merchandise processing fees, and U.S. brokerage 
    and handling expenses, pursuant to section 772(c)(2)(A) of the Act.
    
    Normal Value
    
        In order 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 each respondent'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)(C) of the Act. Because each 
    respondent'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 for each respondent.
    
    A. CAS
    
        Based on the cost allegation submitted by the petitioners, the 
    Department found reasonable grounds to believe or suspect that CAS had 
    made sales in the home market at prices below the cost of producing the 
    merchandise, in accordance with section 773(b)(1) of the Act. As a 
    result, the Department initiated an investigation to determine whether 
    CAS made home market sales during the POI at prices below their 
    respective COPs, within the meaning of section 773(b) of the Act. See 
    Memorandum regarding Initiation of Cost Investigation from the Team to 
    Louis Apple, dated December 15, 1997. Before making any fair value 
    comparisons, we conducted the COP analysis described below.
        We calculated the COP based on the sum of CAS's cost of materials 
    and fabrication for the foreign like product, plus amounts for home 
    market SG&A and packing costs, in accordance with section 773(b)(3) of 
    the Act. We adjusted CAS's reported COP by adding interest expenses on 
    currency options and deducting profits on transfers of securities in 
    the calculation of financial expenses. See Memorandum regarding Cost 
    Calculation Adjustments from William Jones to Chris Marsh, dated 
    February 25, 1998.
        We compared the weighted-average COP figures 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. On a product-specific basis, we compared the COP to home 
    market prices, less any applicable movement charges and discounts.
        In determining whether to disregard home market sales made at 
    prices below the COP, we examined whether such sales were made: (1) In 
    substantial quantities within an extended period of time; and (2) at 
    prices which permitted the recovery of all costs within a reasonable 
    period of time in the normal course of trade. See section 773(b)(1) of 
    the Act.
        Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
    percent of CAS's sales of a given product were at prices less than the 
    COP, we did not disregard any below-cost sales of that product
    
    [[Page 10834]]
    
    because we determined that the below-cost sales were not made in 
    ``substantial quantities.'' Where 20 percent or more of CAS'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 an extended period of time in accordance with section 
    773(b)(2)(B) of the Act. In such cases, we also determined that such 
    sales were not made at prices which would permit recovery of all costs 
    within a reasonable period of time, in accordance with section 
    773(b)(2)(D) of the Act. Therefore, we disregarded the below-cost 
    sales. Where all sales of a specific product were at prices below the 
    COP, we disregarded all sales of that product.
        We found that, for certain models of SSWR, more than 20 percent of 
    CAS's home market sales within an extended period of time were at 
    prices less than COP. Further, the prices did not provide for the 
    recovery of costs within a reasonable period of time. We therefore 
    disregarded the below-cost sales and used the remaining above-cost 
    sales as the basis for determining NV, in accordance with section 
    773(b)(1) of the Act. For those U.S. sales of SSWR 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.
        In accordance with section 773(e) of the Act, we calculated CV 
    based on the sum of CAS's cost of materials, fabrication, SG&A, profit, 
    and U.S. packing costs. As noted above, we adjusted CAS's reported 
    costs for interest expenses on currency options and profits on 
    transfers of securities. In accordance with section 773(e)(2)(A) of the 
    Act, we based SG&A and profit on the amounts incurred and realized by 
    CAS in connection with the production and sale of the foreign like 
    product in the ordinary course of trade for consumption in Italy.
        For those comparison products for which there were sales at prices 
    above the COP, we based NV on packed, delivered prices to home market 
    customers. We made additions to the starting price, where appropriate, 
    for alloy surcharges. We made deductions, where appropriate, for 
    discounts. We also made deductions, where appropriate, for foreign 
    inland freight and insurance expenses, pursuant to section 773(a)(6)(B) 
    of the Act. Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 
    351.410(c), we made circumstance-of-sale adjustments by adding U.S. 
    credit (offset by interest revenue), warranty expenses and commissions. 
    We made no adjustment for home market credit expenses because CAS based 
    its credit periods on estimates rather than on the accounts receivable 
    information requested in the supplemental questionnaire. We also made 
    no adjustment for home market warranty expenses because CAS failed to 
    provide supporting documentation, as requested in the supplemental 
    questionnaire. Moreover, we made no adjustment for imputed credit 
    expenses related to the pre-payment of value-added taxes (VAT) in 
    accordance with our long-standing practice. See, e.g., Notice of Final 
    Determination of Sales at Less Than Fair Value: Sulfur Dyes, Including 
    Sulfur Vat Dyes, from the United Kingdom, 58 FR 3253 (Jan. 8, 1993) 
    (Sulfur Dyes from the U.K.), Notice of Final Determination of Sales at 
    Not Less Than Fair Value: Stainless Steel Bar from Italy, 59 FR 66921 
    (Dec. 28, 1994) (Stainless Steel Bar from Italy), and Ferrosilicon from 
    Brazil; Final Results of Antidumping Duty Administrative Review, 61 FR 
    59407 (Nov. 22, 1996) (Ferrosilicon from Brazil).
        Because CAS paid commissions to unaffiliated agents on sales to the 
    United States, in calculating NV, we offset these commissions using the 
    weighted-average amount of indirect selling expenses, including 
    inventory carrying costs, incurred on the home market sales for the 
    comparison product, up to the amount of the U.S. commissions, in 
    accordance with 19 CFR 351.410(e).
        We added U.S. packing costs, in accordance with section 773(a)(6) 
    of the Act. We made no adjustment for home market packing costs because 
    CAS failed to provide supporting documentation, as requested in the 
    supplemental questionnaire. When appropriate, we made adjustments to NV 
    to account for differences in physical characteristics of the 
    merchandise, in accordance with section 773(a)(6)(C)(ii) of the Act and 
    19 CFR 351.411.
        When NV was based on CV, we made circumstance-of-sale adjustments 
    by adding U.S. credit, warranty expenses, and commissions. We made no 
    adjustments for home market credit and warranty expenses for the 
    reasons noted above. We offset U.S. commissions by using the weighted-
    average amount of indirect selling expenses and inventory carrying 
    costs incurred on the home market sales for the comparison product, up 
    to the amount of the U.S. commissions, in accordance with 19 CFR 
    351.410(e).
    
    B. Valbruna
    
        We based NV on packed prices to home market customers. We made 
    deductions, where appropriate, for discounts. We also made deductions, 
    where appropriate, for foreign inland freight, pursuant to section 
    773(a)(6)(B) of the Act. We made no adjustment for Valbruna's claimed 
    pre-sale warehousing expenses because: (1) These expenses largely are 
    not warehousing expenses; and (2) Valbruna did not separately state any 
    amount of expenses that related to warehousing. We also made no 
    adjustment for certain inland freight expenses because these expenses 
    were based on data outside the POI.
        Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 
    351.410(c), we made circumstance-of-sale adjustments, where 
    appropriate, for differences in credit expenses and commissions. We 
    recomputed Valbruna's home market interest rate to exclude the short-
    term portion of a long-term loan and recalculated home market credit 
    expenses accordingly. Moreover, we made no adjustment for imputed 
    credit expenses related to the pre-payment of VAT, in accordance with 
    our long-standing practice. See, e.g., Sulfur Dyes from the U.K., 
    Stainless Steel Bar from Italy, and Ferrosilicon from Brazil. We also 
    made no adjustment for inventory carrying costs incurred at one of 
    Valbruna's service centers because Valbruna did not provide an adequate 
    justification as to why these expenses should be considered direct 
    selling expenses.
        Because Valbruna paid commissions to unaffiliated agents on home 
    market sales, in calculating NV, we offset these commissions using the 
    weighted-average amount of indirect selling expenses, including 
    inventory carrying costs, incurred on the U.S. sales for the particular 
    product in question, up to the amount of the home market commissions, 
    in accordance with 19 CFR 351.410(e).
        We deducted home market packing costs and added U.S. packing costs, 
    in accordance with section 773(a)(6) of the Act. We reclassified the 
    fixed overhead portion of the reported packing expenses as part of 
    Valbruna's cost of manufacturing. Where appropriate, we made 
    adjustments to NV to account for differences in physical 
    characteristics of the merchandise, in accordance with section 
    773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.
    
    Currency Conversion
    
        We made currency conversions into U.S. dollars based on the 
    exchange rates
    
    [[Page 10835]]
    
    in effect on the dates of the U.S. sales as certified by the Federal 
    Reserve Bank.
        Section 773A(a) of the Act directs the Department to use a daily 
    exchange rate in order to convert foreign currencies into U.S. dollars 
    unless the daily rate involves a fluctuation. It is the Department's 
    practice to find that a fluctuation exists when the daily exchange rate 
    differs from the benchmark rate by 2.25 percent. The benchmark is 
    defined as the moving average of rates for the past 40 business days. 
    When we determine a fluctuation to have existed, we substitute the 
    benchmark rate for the daily rate, in accordance with established 
    practice. Further, section 773A(b) of the Act directs the Department to 
    allow a 60-day adjustment period when a currency has undergone a 
    sustained movement. A sustained movement has occurred when the weekly 
    average of actual daily rates exceeds the weekly average of benchmark 
    rates by more than five percent for eight consecutive weeks. (For an 
    explanation of this method, see Policy Bulletin 96-1: Currency 
    Conversions (61 FR 9434, Mar. 8, 1996).) Such an adjustment period is 
    required only when a foreign currency is appreciating against the U.S. 
    dollar. The use of an adjustment period was not warranted in this case 
    because the Italian lira did not undergo a sustained movement.
    
    Verification
    
        As provided in section 782(i) of the Act, we will verify all 
    information determined to be acceptable for use in making our final 
    determination.
    
    Suspension of Liquidation
    
        In accordance with section 733(d) of the Act, we are directing the 
    Customs Service to suspend liquidation of all entries of SSWR from 
    Italy--except those produced and exported by Valbruna--that are 
    entered, or withdrawn from warehouse, for consumption, on or after the 
    date of publication of this notice in the Federal Register. Normally, 
    we would instruct the Customs Service to require a cash deposit or the 
    posting of a bond equal to the weighted-average amount by which the 
    normal value exceeds the export price, as indicated in the chart below. 
    However, the product under investigation is also subject to a 
    concurrent countervailing duty investigation. Article VI.5 of the 
    General Agreement on Tariffs and Trade (GATT 1994) provides that ``[n]o 
    product * * * shall be subject to both antidumping and countervailing 
    duties to compensate for the same situation of dumping or export 
    subsidization.'' This provision is implemented by section 772(c)(1)(C) 
    of the Act. Since antidumping duties cannot be assessed on the portion 
    of the margin attributed to export subsidies, there is no reason to 
    require a cash deposit or bond for that amount. The Department has 
    determined, in its Preliminary Affirmative Countervailing Duty 
    Determination and Alignment of Final Countervailing Duty Determination 
    With Final Antidumping Duty Determination: Certain Stainless Steel Wire 
    Rod from Italy, 63 FR 809 (Jan. 7, 1998), that the product under 
    investigation benefitted from export subsidies. To obtain the most 
    accurate estimate of antidumping duties and to fulfill our 
    international obligations arising under GATT 1994, we are subtracting, 
    for deposit purposes, the cash deposit rate attributable to the export 
    subsidies found in the countervailing duty investigation (i.e., 0.01 
    percent for CAS). We are also subtracting from the ``All Others'' rate 
    the cash deposit rate attributable to the export subsidies included in 
    the countervailing duty investigation for the All Others rate, 0.06 
    percent.
        In keeping with Article of 17.4 of the WTO Agreement on Subsidies 
    and Countervailing Measures, the Department will terminate the 
    suspension of liquidation in the companion countervailing duty 
    investigation of certain stainless steel wire rod from Italy, effective 
    May 7, 1998, which is 120 days after the date of publication of the 
    preliminary determination. Accordingly, on May 7, 1998, the antidumping 
    deposit rate will revert to the full amount calculated in this 
    preliminary determination. These suspension of liquidation instructions 
    will remain in effect until further notice. The preliminary weighted-
    average dumping margins are as follows:
    
    ------------------------------------------------------------------------
                                                       Weighted-            
                                                        average     Bonding 
                  Exporter/manufacturer                 margin    percentage
                                                      percentage            
    ------------------------------------------------------------------------
    Acciaierie Valbruna/Acciaierie di Bolzano SpA...       1.17         N/A 
    Cogne Acciai Speciali S.r.l.....................       5.77        5.76 
    All Others......................................       5.77        5.71 
    ------------------------------------------------------------------------
    
        Pursuant to section 735(c)(5)(A) of the Act, the Department has 
    excluded all zero and de minimis weighted-average dumping margins from 
    the calculation of the ``All Others'' rate.
    
    ITC Notification
    
        In accordance with section 733(f) of the Act, we have notified the 
    ITC of our determination. If our final determination is affirmative, 
    the ITC will determine, before the later of 120 days after the date of 
    this preliminary determination or 45 days after our final 
    determination, whether these imports are materially injuring, or 
    threaten material injury to, the U.S. industry.
    
    Public Comment
    
        Case briefs or other written comments in at least ten copies must 
    be submitted to the Assistant Secretary for Import Administration no 
    later than May 22, 1998, and rebuttal briefs no later than May 29, 
    1998. A list of authorities used and an executive summary of issues 
    must accompany any briefs submitted to the Department. Such summary 
    should be limited to five pages total, including footnotes. In 
    accordance with section 774 of the Act, we will hold a public hearing, 
    if requested, to afford interested parties an opportunity to comment on 
    arguments raised in case or rebuttal briefs. Tentatively, the hearing 
    will be held on June 2, 1998, time and room to be determined, at the 
    U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
    Washington, DC 20230. 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 to the Assistant 
    Secretary for Import Administration, U.S. Department of Commerce, Room 
    1870, within 30 days of the publication of this notice. Requests should 
    contain: (1) The party's name, address, and telephone number; (2) the 
    number of participants; and (3) a list of the issues to be discussed. 
    Oral presentations will be limited to issues raised in the briefs. If 
    this investigation proceeds normally, we will make our final 
    determination by no later than 135 days after the publication of this 
    notice in the Federal Register.
        This determination is published pursuant to section 777(i) of the 
    Act.
    
        Dated: February 25, 1998.
    Robert S. LaRussa,
    Assistant Secretary for Import Administration.
    [FR Doc. 98-5598 Filed 3-4-98; 8:45 am]
    BILLING CODE 3510-DS-P
    
    
    

Document Information

Effective Date:
3/5/1998
Published:
03/05/1998
Department:
International Trade Administration
Entry Type:
Notice
Document Number:
98-5598
Dates:
March 5, 1998.
Pages:
10831-10835 (5 pages)
Docket Numbers:
A-475-820
PDF File:
98-5598.pdf