[Federal Register Volume 62, Number 72 (Tuesday, April 15, 1997)]
[Notices]
[Pages 18468-18475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9426]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-405-802]
Certain Cut-to-Length Carbon Steel from Finland; Final Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of antidumping duty administrative
review.
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SUMMARY: On October 4, 1996, the Department of Commerce (the
Department) published the preliminary results of its 1994-95
administrative review of the antidumping duty order on certain cut-to-
length carbon steel from Finland. The review covers one manufacturer/
exporter, Rautaruukki Oy (``Rautaruukki''), for the period August 1,
1994 through July 31, 1995. We gave interested parties an opportunity
to comment on our preliminary results. Based on our analysis of the
comments received, we have made the changes described in this notice.
EFFECTIVE DATE: April 15, 1997.
FOR FURTHER INFORMATION CONTACT:
Jacqueline Wimbush or Linda Ludwig, Office of AD/CVD Enforcement, Group
III, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone (202) 482-1374 or 482-3833,
respectively.
SUPPLEMENTARY INFORMATION:
Background
On October 4, 1996, the Department published in the Federal
Register (61 FR 51901) the preliminary results of the
[[Page 18469]]
antidumping duty order on certain cut-to-length carbon steel plate from
Finland (58 FR 44165). The Department has now completed this
administrative review in accordance with section 751 of the Tariff Act.
Applicable Statute and Regulations
Unless otherwise stated, all citations to the Tariff Act of 1930,
as amended (the Tariff Act) are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the
Tariff Act by the Uruguay Round Agreements Act (URAA). In addition,
unless otherwise indicated, all citations to the Department's
regulations are to the current regulations, as amended by the interim
regulations published in the Federal Register on May 11, 1995 (60 FR
25130).
Scope of the Review
The products covered by this administrative review constitute one
``class or kind'' of merchandise: certain cut-to-length carbon steel
plate. These products include hot-rolled carbon steel universal mill
plates (i.e., flat-rolled products rolled on four faces or in a closed
box pass, of a width exceeding 150 millimeters but not exceeding 1,250
millimeters and of a thickness of not less than 4 millimeters, not in
coils and without patterns in relief), of rectangular shape, neither
clad, plated nor coated with metal, whether or not painted, varnished,
or coated with plastics or other nonmetallic substances; and certain
hot-rolled carbon steel flat-rolled products in straight lengths, of
rectangular shape, hot rolled, neither clad, plated, nor coated with
metal, whether or not painted, varnished, or coated with plastics or
other nonmetallic substances, 4.75 millimeters or more in thickness and
of a width which exceeds 150 millimeters and measures at least twice
the thickness, as currently classifiable in the Harmonized Tariff
Schedule (HTS) under item numbers, 7208.40.3030, 7208.40.3060,
7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000,
7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030,
7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, and
7212.50.0000. Included are flat-rolled products of 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. Excluded is grade X-70 plate. These HTS item numbers are
provided for convenience and Customs purposes. The written description
remains dispositive.
The period of review (``POR'') is August 1, 1994, through July 31,
1995. This review covers entries of certain cut-to-length carbon steel
plate by Rautaruukki.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received briefs and rebuttal comments from
Bethlehem Steel Corporation, U.S. Steel Group a unit of USX
Corporation, Inland Steel Industries, Inc., LTV Steel Company, Inc.,
National Steel Corporation, AK Steel Corporation, Gulf States Steel
Inc. of Alabama, Sharon Steel Corporation, and WCI Steel Inc.,
collectively petitioners, and from Rautaruukki, respondent, an exporter
of the subject merchandise. At the request of respondent, we held a
hearing on December 2, 1996.
Comment 1
The respondent argues that the Department erred by failing to
consider all subject merchandise with shipbuilding specification ``A''
as identical merchandise. Respondent states that the Department
assigned new control numbers (``CONNUMs'') to shipbuilding steel for
each specification and/or grade (``PLSPECH'') based on the national
classification society. Consequently, respondent argues that the
Department considered only the shipbuilding plate certified as ``ABA''
for sale in the Finnish home market and the U.S. market as identical
merchandise, and erroneously treated shipbuilding plate which was
certified by a different national classification society as non-
identical merchandise.
Respondent claims that its customers sometimes demand that
identical merchandise be certified in accordance with the
specifications of the national classification society of the country in
which the product will be used. As a result of this, respondent states
that it reported multiple PLSPECH codes for the same CONNUM. Respondent
argues that the administrative record shows that merchandise
manufactured to the ``A'' specification is identical regardless of
national classification society certification. Respondent alleges that
it gave the Department a table of identical and most similar
merchandise which demonstrated that the physical characteristics,
including chemistry, delivery condition, elongation, yield strength and
tensile strength are identical for all shipbuilding plate with the
``A'' specification (see Exhibit SUPP-17, dated December 6, 1996, as
part of Rautaruukki's response to the Department's supplemental
questionnaire). Respondent notes that it provided the Department with
mill certificates for various shipbuilding (``A'') specifications,
which indicated that the chemical and physical properties are the same
for shipbuilding steel with the ``A'' specification, and the steel from
the same cast or heat was used to meet orders of shipbuilding plate
sold to two different classification society certifications.
Respondent claims that the Department has acknowledged that all
``A'' specification shipbuilding plate are identical products.
Respondent cites the Department's verification report which states:
``We examined mill certificates for products which have identical
physical characteristics but were sold to different countries with
different specifications: It is clear that the products were identical
based on physical characteristics.''
Respondent also contends that the Department has improperly changed
its model-match program from the previous administrative review.
Respondent notes that in the first review, the Department assigned
identical designated values for PLSPECHs which represented subject
merchandise manufactured to the ``A'' specification of shipbuilding
steels. Respondent states that in the first administrative review, the
Department recognized that these products are identical products with
the same chemical and physical characteristics.
Respondent argues that an administrative agency must either follow
existing decisions and precedents or else explain its deviation, citing
Citrosuco Paulista, S.A. v. United States, 12 CIT 1196, 1209, 704 F.
Supp. 1075, 1088 (1988). Respondent argues that the Department should
have either conformed to, or explained the reasons for its departure
from, its prior determination. Respondent claims that no new facts were
presented that supported a different conclusion than that reached in
the prior administrative review, citing Shikoku Chemicals Corp. v.
United States, 16 CIT 382, 795 F. Supp. 417, 421 (1992).
Respondent argues that the Department never asked for information
explaining in greater detail its product code system nor did it ever
notify Rautaruukki regarding any change in the review. Thus,
Rautaruukki claims that it was never given an opportunity to supplement
or clarify the record or change its existing reporting methodology,
citing SKF USA Inc. v. United States, 888 F. Supp. 152 (CIT
[[Page 18470]]
1995). Respondent also cites Bowe-Passat v. United States, 17 CIT 335,
343 (1993), in which its states that the Department sent out a general
questionnaire and a brief deficiency letter, without disclosing other
deficiencies unspecified in the letter until after ``it was too late,
i.e., after preliminary determination.''
Petitioners contend that if Rautaruukki's PLSPEC matching hierarchy
was accepted as accurate by the Department, the Department would be
faced with insurmountable obstacles that would prevent it from
correcting Rautaruukki's CONNUM and PLSPEC data. Petitioners argue that
acceptance of Rautaruukki's ``explanation'' would necessitate the
collapsing and ``splitting'' of CONNUMs, which the Department should
not and could not do. Petitioners claim that Rautaruukki's PLSPEC
matching hierarchy indicates some specifications with a given CONNUM to
be identical to the PLSPEC sold in the U.S., some to be ``similar'' to
that PLSPEC, and that separate CONNUMs should have been created for
other PLSPECs.
Petitioners contend that Rautaruukki's database would have to be
reconfigured before it could be used if Rautaruukki's submitted PLSPEC
matching hierarchy were deemed accurate and dispositive. Petitioners
note that it is not the Department's responsibility to make such
changes, citing Neuweg Ferrigung GmbH v. United States, 797 F. Supp.
1020, 1023-24 (CIT. 1992). Petitioners argue that the Department's
acceptance of Rautaruukki's matching hierarchy would necessarily render
its sales and cost databases unusable for purposes of the sales-below-
cost test, because Rautaruukki's reported matching hierarchy only
identifies a limited number of PLSPECs. Thus, the Department would be
preluded from reconfiguring the vast majority of Rautaruukki's
database.
Petitioners argue that it would be impossible for the Department to
correct Rautaruukki's PLSPEC and CONNUM information. Petitioners claim
that the ramifications of the Department's inability to correct
Rautaruukki's submitted data would affect the Department's analysis at
a most fundamental level. Petitioners argue that (1) the creation of
new CONNUMs would require correcting the corresponding model-specific
cost information, by creating new costs for newly collapsed and split
CONNUMs; and (2) that the Department's inability to correct
Rautaruukki's CONNUMs prevents it from performing its sales-below-cost
test. Petitioners argue that the Department's acceptance of
Rautaruukki's matching hierarchy would necessarily render its sales and
cost databases unusable for purposes of the arm's-length test.
Petitioners claim that the fact that the arm's-length test cannot be
performed is of great significance given the number of sales in the
home market that were made to affiliated parties.
Petitioners argue that Rautaruukki's attempts in its case brief to
focus the Department's attention on its treatment of four PLSPEC
designations, and two CONNUMs under which these PLSPECs are reported in
the home market database overlook the deficiencies throughout
Rautaruukki's database. Petitioner argue that such a decision would set
a terrible precedent, and that the respondent would only need to ensure
that it report correctly certain home market sales that it predicted
would match to U.S. sales, and not bother ensuring that the rest of its
submitted information was correct. Petitioners state that the
Department gave Rautaruukki notice of the problems inherent in its data
and an opportunity to correct or clarify this information.
Petitioners argue that the statute does not, and cannot
legitimately be read to, require notification of data deficiencies or
failures where the department could not know the extent or particulars
of the problem until verification. Petitioners state that if the
Department were not allowed to reject unreliable, inaccurate, or
incomplete information provided by the respondents and discovered at
verification, the very basis of the Department's statutory authority
would be negated, citing Sweaters Wholly or in Chief Weight of Man-Made
Fiber from Taiwan, 55 FR 34,587 (Aug. 23, 1990) (Final Determination of
Sales at Less Than Fair Value); and Silicon Metal from Brazil, 59 FR
42,806, 42,812 (Aug. 19, 1994) (Final Results of Antidumping Duty
Review). To do otherwise, in petitioner's view, would require either
the acceptance of unverified information or additional verification by
the Department. Petitioners claim that the major deficiencies in
Rautaruukki's data base were discovered and raised by the Department at
the earliest opportunity at verification, and the department had no
opportunity or reason to inquire into these issues prior to
verification. Petitioners argue that Rautaruukki should have been aware
of the deficiencies in its data base prior to verification and has had
every opportunity to clarify or correct its submitted information.
Petitioners state that in the original questionnaire, the Department
provided clear instructions for providing specification/grade
information, emphasized the importance of the specification/grade
classification, and gave Rautaruukki every opportunity to request
guidance from the Department regarding the assignment of specification
or grade information.
Petitioners argue that Rautaruukki never requested guidance from
the Department, and that the Department issued a lengthy supplemental
questionnaire in this case, which requested clarification of
Rautaruukki's PLSPEC and CONNUM assignments. Petitioners argue that
Rautaruukki's claims in this regard are without merit and should be
rejected by the Department.
Department's Position
We agree in part with petitioners. Under the Department's
methodology for assigning CONNUMs, each product, based on the
Department's model match criteria, should be assigned its own unique
CONNUM. Based on these criteria, there should not be more than one
PLSPEC in any CONNUM because different specifications have different
physical, mechanical or chemical requirements. Respondent has not
assigned its CONNUMs consistent with the Department's model match
criteria. In certain instances, respondent reported within the same
CONNUM shipbuilding ``A'' specifications, as well as non-shipbuilding
specifications. In the Department's preliminary results, we created new
CONNUMs for each of the shipbuilding ``A'' specifications identical or
most similar to the U.S. sales. this is a change from the prior review
in which this issue did not come to the Department's attention.
We relied on respondent's model match hierarchy, which indicates
that all shipbuilding ``A'' PLSPECs are identical, to weight the
physical characteristics for matching purposes. However, the statement
in the Department's verification report, that ``based on the mill
certificates it is clear that the products were identical based on
physical characteristics,'' referred only to the fact that products are
physically identical with respect to certain characteristics analyzed
by the Department, and not that the specifications that they are
meeting are identical. The PLSPEC variable is intended to identify the
differences in the specification to which the product is sold. Prices
can vary based on the specifications to which the product is sold, even
though the product is physically identical. It is inconsistent with the
Department's model matching criteria in this case to consider products
sold to different specifications as identical for margin calculation
[[Page 18471]]
purposes. We assigned one weight to ``ABA'', the only PLSPEC sold in
the United States. Since all other ``A'' grade shipbuilding
specifications possess different requirement from ``ABA'' but
essentially are the same product, we treated them as the next most
similar product, as we had no basis to distinguish among these PLSPECs
from respondent's model match hierarchy. All U.S. sales were matched to
shipbuilding ``A'' specification material.
While the Department did not specifically request respondent to
revise its CONNUMs, we did ask Rautaruukki to explain in detail how
each reported product characteristic was determined and assigned to
sales of subject merchandise. Respondent never explained why it
combined PLSPECs in CONNUMs as it did. Nor did Rautaruukki ask the
Department to consider modifying its methodology to allow Rautaruukki
to report CONNUMs as it did. We agree with petitioners that respondent
has likely incorrectly assigned CONNUMs throughout the data base. The
Department was able to and has revised the data base where it was
necessary to do so for purpose of the margin calculation.
This effort by the Department does not impair our ability to
perform the cost test in this review. As explained in Comment 3, we are
using facts available and assigning a single cost for all CONNUMs. (See
Comment 3, below.) Consequently, we are able to perform the cost test
without obtaining additional cost data from Rautaruukki, and have done
so for these final results.
With respect to the arm's length test, we are already using facts
available as NV for all U.S. sales matching to these sales, making this
issue moot.
Comment 2
Respondent argues that the Department has erred by comparing normal
cut-to-length carbon steel plate sold to the U.S. market with the wide
flats and beveled plate sold in the home market because these products
are not identical or similar. Respondent asserts that the United States
Customs Service has issued a number of definitional rulings concerning
the classification of ``wide flats'' under the Harmonized Tariff
Schedule of the United States (1996) (``HTSUS''). Respondent claims
that these rulings indicate that ``wide flats'' are considered to be
parts of steel structures and, therefore, classifiable under heading
7308 of the HTSUS. See, e.g., Headquarter Ruling 088116 (Feb. 27,
1991); Headquarters Ruling 084532 (July 14, 1989).
Respondent claims that beveled plate and wide flats are structural
steel products which require separate handling on a different product
line, and that the raw material for both is basic cut-to-length plate.
Respondent claims that the Department was provided extensive
information about the different and additional cost associated with
both products, as well as the additional processes which are necessary
to produce these products. Respondent claims that the Department has
verified that wide flats and beveled products require additional
processing, and that the Department erred in comparing sales of these
products with those of normal plate. Respondent states that it assigned
distinct CONNUMs to beveled plate and to wide flats although they may
have the same physical characteristics as basic cut-to-length plate,
because they are manufactured by different processes and have different
end uses.
Petitioners claim that Rautaruukki's arguments regarding the
Department's treatment of beveled and wide flat products are without
merit. Petitioners argue that Rautaruukki raised the same arguments in
the first administrative review regarding beveled plate products and
the Department rejected them. Petitioners state that the Department
correctly determined in the first administrative review that
Rautaruukki failed to establish the relevance of the beveling as a
product matching criteria, and that ``beveled plate does not possess
physical characteristics which make it unique from non-beveled plate
with regards to applications and uses,'' citing Certain Cut-to-Length
Carbon Steel Plate from Finland, 61 FR 2792, 2795 (Jan. 29, 1996)
(Final Results of Antidumping Duty Administrative Review). Petitioners
also note that in response to a letter from the Department to
interested parties on model match prior to the first administrative
review, Rautaruukki commented on several issues, but did not mention
the treatment of beveled plate or wide flat products in any regard.
Petitioners argue that nothing has changed with respect to this
issue in the second review, and the Rautaruukki has not established on
the record the relevance of beveling or wide flats as product matching
criteria. Petitioners argue that Rautaruukki has simply ignored the
Department's hierarchy and attempted to create its own and, therefore,
the Department has correctly determined that neither beveled plate nor
wide flat products possess any physical characteristics that set them
apart from non-beveled or non-wide flats plate products.
Department's Position
We agree with petitioners. The Department issued clear instructions
on how to construct CONNUMs. Whether or not subject merchandise is
beveled or wide flat is not a model match criterion. Rautaruukki never
explained that it had modified the Department's model match criteria or
why it had done so. Rautaruukki did not ask the Department to consider
modifying the model match criteria. As petitioners correctly note,
respondent cannot modify the Department's model match criteria on its
own initiative. The Department agrees with the petitioners that
respondent did not submit any information on the record to establish
the revelance of beveling and wide flats as a product matching
criterion, nor did respondent provide information to demonstrate that
the beveled and wide flats plate possess physical characteristics to
make them unique from the non-beveled or non-wide flats with regard to
applications and uses. Therefore, the Department continues to consider
these products identical to other subject merchandise. With respect to
the cited Customs Rulings, Rautaruukki did not provide any information
on the record to suggest that wide flats are not subject merchandise.
For the preliminary results, the Department modified Rautaruukki's
submitted CONNUMs for the products identical or most similar to the
U.S. sales to combine beveled, wide flat and other plate into a single
CONNUM. We have not changed this for these final results.
We used facts available as NV for U.S. sales matching to home
market CONNUMs that included beveled or wide flat sales as we were
unable to verify cost for beveled or wide flat products. We have
identified additional CONNUMs as containing beveled or wide flat
material for these final results. See Comment 3 below.
Comment 3
Petitioners argue that the Department should reject Rautaruukki's
submitted cost information and resort to total facts available. While
petitioners support the Department's determination in the preliminary
results that the cost data for beveled and wide flat products could not
be verified, they claim that the Department erred by failing to
recognize that other significant cost information reported by
Rautaruukki could not be verified.
In petitioners' view, the product-specific cost information
submitted by Rautaruukki (the ``cost extras'') could not be verified.
Petitioners state that
[[Page 18472]]
Rautaruukki's reported COP/CV values are derived from a two-step
calculation: A single weighted-average base cost for all plate
products; and an adjustment to that weighted-average cost to account
for dimensional cost extras and quality cost extras. Petitioners argue
that these two cost extras could not be verified. Petitioners claim
that these cost extras are a significant portion of Rautaruukki's total
cost and the only product-specific element of the submitted product
costs.
According to petitioners, Rautaruukki failed to provide accurate or
relevant source documentation for the cost extras at verification, and
the documentation provided by Rautaruukki at verification was
insufficient to demonstrate that its reported costs were accurate,
reliable, or related to the period of review. Petitioners state that
the Department's verification agenda states that complete supporting
documentation should be available for selected CONNUMs. It is argued by
petitioners that Rautaruukki did not provide the requisite information
as it pertains to the product-specific cost extras identified above.
Petitioners cite the Department's cost verification report, at 4, which
states that ``Rautaruukki representatives indicated to the Department
at verification that they do not maintain a log or any documentation
which identifies product-specific cost changes from one period to
another.'' Petitioners claim that Rautaruukki did not maintain crucial
supporting documentation that was required to verify the accuracy of
its reported cost extras.
Petitioners question the relevance or accuracy of Rautaruukki's on-
line computer system as a source document to verify cost extras.
Petitioners note that Rautaruukki employs a continuously updated
computer cost system (i.e., the product-specific costs the Department
reviewed at verification were the costs relevant to the time of
verification, and were not the costs in effect during the period of
review, nor were they the costs in effect at the time the questionnaire
response was prepared). Petitioners hold that reliance on such a
computer system in the course of a verification does not meet a
``reasonable standard'' incumbent upon the Department. (See Micron
Technology, Inc. v. United States, 893 F. Supp. 21, 39 (CIT 1995) and
Hercules, Inc. v. United States, 673 F. Supp. 454, 469 (CIT 1987).) At
the hearing, petitioners clarified that their objection to an on-line,
live system is not the lack of a print-out, but the absence of ties to
financial statements.
Petitioners state that Rautaruukki also showed the Department a
cost extras book published in July 1995 to verify cost extras.
Petitioners note that the book was published at the end of the POR and
there is no evidence on the record indicating that the values of the
extras in the book were related to the POR. Petitioners also question
whether the cost extras book is a reference for costs of production for
particular extras or whether the book is used to determine the charges
to be paid by customers for particular extras.
Petitioners allege that when the Department attempted to verify
these cost extras, it was unable to tie the cost extras values reported
by respondent to source documentation and that when compared to the
documentation that did exist, numerous errors were uncovered.
Petitioners note that of 48 cost extras examined at verification, 38
percent of the cost extras had been misreported.
Petitioners argue that in situations where respondent has failed to
retain and failed to provide the necessary supporting documentation for
such key components of the cost data set, the respondent is said to
have failed verification, and the Department should therefore apply
total facts available, citing Grain Oriented Electrical Sheet Steel
from Italy (59 FR 33952, (July 1, 1994)); Certain Cut-to-Length Carbon
Steel Flat Products from Sweden (61 FR 51,898, 51,899, (Oct. 4, 1996))
(Flat Products from Sweden). Petitioners note that in Flat Products
from Sweden, the Department applied total facts available because the
respondent was unable to reconcile its submitted cost data to its
normal accounting books and records and was unable to demonstrate that
the submitted COP/CV data was based on the company's actual production
experience. Like respondent in Flat Products from Sweden, in
petitioners view, Rautaruukki did not provide documentation at
verification that could demonstrate that the submitted COP/CV data was
based on the company's actual production experience.
Rautaruukki contends that the Department conducted a
``comprehensive and proper cost verification'' and that the Department
confirmed that the cost information submitted by Rautaruukki was based
on Rautaruukki's normal accounting and financial records. Moreover,
Rautaruukki claims that the Department verified Rautaruukki's reported
base cost figures for allocation of indirect costs to direct cost
centers, maintenance expenses, by-product and scrap allocations, cost
of manufacturing, selling, general and administrative expenses, and
reported per-unit costs. Respondent asserts that no discrepancies were
noted in the course of verifying these items.
Rautaruukki distinguishes this case from Flat Products from Sweden
by arguing that in that case the Department found that the respondent
had based its AD response on a special system which was not used as
part of the respondent's normal accounting system. Rautaruukki claims
that the Department found that its submitted cost information was based
both on its normal accounting books and records and on its actual
production experience.
Rautaruukki notes that the values for quality extras were taken
from data in its on-line computer system, which is constantly updated
to reflect changes in costs so that Rautaruukki can make the
corresponding changes in its prices. Respondent states that it ``does
not maintain a log of the changes in extras costs from one period to
another.'' Rautaruukki admits that the Department found at verification
that some quality extras values were different from those reported by
Rautaruukki, but attributed these differences to the system being
updated since Rautaruukki had prepared its questionnaire response.
Respondent claims that these differences were slight, about one or two
FIM per cost extra. In response to a question at the hearing,
Rautaruukki explained that the extras cost book is in fact a cost book,
not a price extras book. In some cases, respondent noted that the
discrepancies in cost extras were positive and in other cases
negatives.
Department's Position
We agree, in part, with both parties. We agree with respondent that
the Department was able to tie Rautaruukki's base costs to appropriate
financial and accounting documentation. This represents by far the
largest portion of Rautaruukki's total cost.
We agree with petitioners that the Department was unable to tie
Rautaruukki's extras costs to supporting documentation at verification.
With respect to beveled and wide flat products, as we stated in our
preliminary results, the use of facts available is appropriate because
the Department was unable to verify Rautaruukki's total COP data. This
was because Rautaruukki made no attempt to provide supporting
documentation with respect to its cost extras, simply indicating that
these extras could not be verified.
Rautaruukki did provide some documentation to support its cost
extras submission with respect to other products. This documentation
consisted of its on-line computer system and a
[[Page 18473]]
cost extras book. However, neither of these sources was for the POR--
the on-line system was current as of the date of verification and the
cost extras book was prepared at the end of the POR, with no indication
as to the period for which the costs in the book were in effect. As
stated in the Department's cost verification report concerning a
particular CONNUM, ``in reviewing the extras costs associated with this
product, we could not verify the accuracy of the reported cost for (a
particular plate extra) * * *. Respondents were unable to provide
documentation indicating that the figure was correct when the material
was manufactured or when the response was prepared.''
At verification, we did compare 48 different reported cost extras
to the costs listed in the cost extra book. Of these, there were
discrepancies for 16, or 38 percent. The differences were extremely
small, usually only one or two FIM. For all of the home market products
that were matched to U.S. sales, the reported cost extras represented a
small percentage of total cost. No documentation was provided to link
either the cost extra book or the on-line computer system into
Rautaruukki's audited financial accounting system.
Because of Rautaruukki's failure to report properly extra cost data
based on the POR, failure to retain the data that it did use to prepare
its questionnaire response, and the failure of Rautaruukki to provide
documentation linking the reported extras costs with accounting and
financial documentation, the Department has determined to use facts
available for Rautaruukki's reported extras costs.
However, the Department disagrees with petitioners' suggestion that
it apply total facts available in this review. The cases cited by
petitioners, Grain Oriented Electrical Sheet Steel from Italy and Flat
Products from Sweden, differ from this case. In both of those cases,
the Department was unable to verify numerous and fundamental aspects of
the respondents' responses. In this case, however, the significant
problems encountered at verification were limited to cost extras. Base
costs--the primary component of cost--were fully verified. The observed
discrepancies with respect to cost extras for products other than wide
flats and beveled plate were extremely small, and for the home market
products used to match to U.S. sales, reported cost extras represented
a small portion of total cost. As a result, rather than resort to total
adverse facts available for these products, as advocated by
petitioners, for products other than wide flats and beveled plate we
are using facts available only for the cost extras in the calculation
of COP and CV. As facts available, we are using the highest reported
cost extras for products that are not beveled or wide flat. Due to the
significant difference in cost between painted and non-painted
products, we have also separately identified the highest reported extra
costs for painted and non-painted plate. In calculating difference of
merchandise (difmer) adjustments, we have assigned a difmer of zero to
shipbuilding specification ``A'' material that same cost as the U.S.
product.
For wide flats and beveled products, Rautaruukki made no attempt to
provide information to verify its reported extras data. Indeed
Rautaruukki admitted that this information could not be verified. As
stated in the cost verification report: We also noted that the costs
reported for wide flats and beveled material are incorrect. The report
goes on to state that this failure to correctly report the extras cost
of these products rendered moot our attempt to verify the costs.
(Department's Cost Verification report at 4.) We are continuing to use
facts available as NV for U.S. sales matching to CONNUMs including wide
flats and beveled plate as we did in the preliminary results.
We also note that respondent improperly reported COP and CV data
for two separate periods, 1994 and seven months of 1995, rather than
report a single weighted average COP/CV for the entire POR. Respondent
also improperly included data for all of calendar year 1994 in its COP/
CV data, rather than limiting the data used to the months of the POR.
For the final results of this review, we are weight averaging
respondent's submitted data, with the modifications noted above.
Comment 4
Petitioners argue that the Department is compelled to reject
Rautaruukki's submitted sales information and resort to total facts
available. Petitioners claim that respondent has offered three
inconsistent and mutually exclusive explanations of how it assigned
PLSPEC and CONNUM codes to its various products:
That whenever multiple PLSPECs are assigned to a
particular CONNUM, those PLSPECs are identical to one another because
they merely reflect various countries' designations of the same
specification/grade;
That respondent's PLSPEC codes each reflect different
specification and grades; and
That the various PLSPECs within a given CONNUM in some
cases are identical to one another, in other cases are only similar
(although not identical), and in still other cases are dissimilar.
Petitioners argue that the submitted sales information should be
rejected because: (1) The PLSPEC and CONNUM codes are critical to the
Department's dumping analysis; (2) the Department has no basis for
selecting among Rautaruukki's various inconsistent explanations of
these codes; and (3) the Department is unable to correct Rautaruukki's
data. Petitioners argue that the assignment of PLSPEC and CONNUM codes
directly affects almost every critical element of the Department's
analysis of the existence and magnitude of dumping, including
attribution and allocation of costs, model match, and application of
the arm's length test.
Petitioners summarize the record evidence in support of each of the
three explanations which it believes respondent has offered.
Petitioners offer various cites to the record in support of the first
proposition that certain different PLSPEC designations included within
a single CONNUM are in fact identical and that respondent merely
assigned different PLSPECs to reflect the nomenclature of different
international standards for identical products. Petitioners claim that
the Department verified that these PLSPECs are identical. In support of
the second proposition, petitioners cite the cost verification report,
which they claim indicated that respondent separately tracked and
recorded costs for certain PLSPECs within the same CONNUM. Petitioners
also reference the sales verification report which states that
``Rautaruukki has correctly assigned different PLSPEC codes to
different specifications and grades. The specifications and grades are,
indeed, different* * *.'' Petitioners also cite respondent's submitted
model match hierarchy in support of their third proposition, that some
PLSPECs under a CONNUM are identical, while others only similar and
others are not even similar.
Petitioners argue the quantum of evidence of the record and the
number of statements made by Rautaruukki consistent with each of the
alternatives is roughly equivalent, and Rautaruukki has supported each
of its claims with documentation, and in two of the three instances,
the Department purportedly confirmed this information at verification.
Petitioners argue that if the Department were to accept the first
claim, that all PLSPECs under a single CONNUM are identical, the
Department would have to collapse PLSPECs within
[[Page 18474]]
a CONNUM, and also collapse PLSPECs that are identical to each other
but are assigned different CONNUMs throughout the entire database.
Petitioners claim that this would entail extraordinarily complex
computer programming and the Department could not be certain of making
all the necessary corrections. Petitioners also note that if this claim
were accepted, the Department would have to correct all corresponding
cost information and revisit the issue of downstream sales. Petitioners
also argue that the Department would have to reject Rautaruukki's
submitted model match hierarchy and, as a result, would be precluded
from performing the model match.
Petitioners argue that if the Department were to accept the second
claim that all reported PLSPECs are different, the Department would
have to split all the CONNUMs that contain multiple PLSPECs and
determine the correct cost for each new CONNUM. However, in
petitioners' view, the Department has no basis upon which to apportion
the COP/CV of the original CONNUM to the newly-created CONNUMs.
Petitioners claim that under this scenario the Department again would
have to reject Rautaruukki's submitted model match hierarchy and, as a
result, would be precluded from performing the model match.
Petitioners claim that if the Department were to accept
Rautaruukki's third claim that some PLSPECS reported under a CONNUM are
identical, while others are only similar and others are not similar at
all, then the Department would have to collapse the PLSPECs listed in
the model match hierarchy as identical and separate all of the non-
identical PLSPECs listed under the same CONNUM. Petitioners also claim
that the Department would have to correct the corresponding cost
information. However, petitioners noted that the model match hierarchy
does not list all PLSPECs and they argue the Department would be
precluded from running the arm's length test.
Respondent alleges that it provided the Department with a
consistent, accurate and verified explanation of its assignment of
CONNUMs and PLSPECs in this administrative review. Respondent asserts
that petitioners' claims are contradicted by the record, including the
Department's verification of the methodology and accuracy of
Rautaruukki's assignment of CONNUMs and PLSPECs. Respondent states that
PLSPECs may be identical, similar or different.
Citing the Department's analysis memorandum, respondent claims that
in performing the model match, the Department first identified home
market sales with the same CONNUM as the U.S. sales and, then matched
identical PLSPECs within that CONNUM. Respondent asserts that it has
assigned separate PLSPEC codes to separate specifications or grades.
Respondent notes that in some cases, these PLSPEC codes identify
identical products, but the codes are different to reflect the national
specification or classification standard to which the product was
certified. Rautaruukki claims that it clearly identified the PLSPEC
codes which it used, and the Department verified that information.
Respondent also states that it assigned different CONNUMs to
products with the same physical characteristics when those products
fell into different product groups which are manufactured by different
processes and have different end uses. Respondent contends that the
Department verified that some of these products, including wide flats
and beveled plate, require additional processing.
Respondent notes that the record establishes that:
The same CONNUM may have included two or more PLSPECs.
There are some PLSPECs within a CONNUM which define identical products
(e.g., the PLSPECs assigned to the certifications of shipbuilding plate
``A'' by the various national classification societies), while other
PLSPECs define similar or different products.
Different CONNUMs reflect different product groups with
the same physical characteristics, i.e., normal cut-to-length plate,
wide flats, and beveled plate.
Individual PLSPECs represent separate specification or
grade codes.
Respondent claims that petitioners attempt to construct a dilemma
where none exists, and that Rautaruukki's ``explanations'' are not
inconsistent and certainly not mutually exclusive.
Department's Position
We disagree with petitioners that Rautaruukki has offered three
inconsistent and mutually-exclusive explanations of how it assigned
PLSPEC and CONNUM codes and that the Department has no basis for
choosing among these explanations. We believe that the third
explanation cited by petitioners--that in some instances PLSPECs are
identical, in other instances they are similar, and in other instances
they are not similar--is consistent with the information submitted on
the record. The ``evidence'' which petitioners cite in support of the
other two explanations is not global in nature. For example, statements
cited by petitioners in support of the first explanation--that whenever
multiple PLSPECs are assigned to a particular CONNUM, those PLSPECs are
identical to one another because they merely reflect various countries'
designations of the same specification/grades--are referring to
shipbuilding specifications only. Similarly, none of the information
referenced by petitioners regarding the second explanation--that PLSPEC
codes each reflect different specification and grades--indicates that
this is true of all PLSPECs. Thus, we find that Rautaruukki's
explanations regarding PLSPECs are consistent.
This does not mean that we find that Rautaruukki has correctly
assigned CONNUMs. As indicated in response to Comment 1, we do not
agree that all shipbuilding ``A'' PLSPECs should be combined in a
single CONNUM. We are continuing to make the changes to Rautaruukki's
data base with respect to the reconfiguration of CONNUMs that were made
in the preliminary results. Petitioners' concerns with respect to cost
data, the sales-below-cost test and the arm's length test have been
addressed in Comment 1.
Comment 5
Petitioners state that Rautaruukki has compelled the Department to
use adverse total facts available, because Rautaruukki failed to
provide the Department with a response that is consistent; an
explanation of how Rautaruukki's response was prepared; and the
necessary information needed to verify the submitted cost information.
Petitioners argue that under the terms of the statute, the
Department is compelled to reject Rautaruukki's responses, and resort
to total facts available. Petitioners note that 19 U.S.C.
1677e(a)(1995) provides that if:
(1) Necessary information is not available on the record, or
(2) an interested party or any other person--
(A) withholds information that has been requested by the
administering authority . . .,
(B) fails to provide such information by the deadlines for
submission of the information or in the form and manner requested .
. .,
(C) significantly impedes a proceeding under this subtitle, or
(D) provides such information but the information cannot be
verified . . ., the administering authority and the Commission shall
. . . use the facts otherwise available in reaching the applicable
determination under this subtitle.
[[Page 18475]]
Petitioners contend that the statute provides that any one of the
above five scenarios requires the Department to reject Rautaruukki's
responses and resort to facts available. Petitioners allege that
despite repeated requests by the Department, Rautaruukki did not
provide adequate information by which the Department could verify its
reported cost information, and it did not provide the Department with a
consistent and reliable explanation of how the company assigned PLSPEC
and CONNUM codes to its various products. Petitioners state that
section 1677m of the statute provides that the Department may still
rely on submitted information that fails to meet the above criteria in
certain circumstances which in petitioners' view have not been
satisfied by Rautaruukki. Petitioners claim that the Department has
complied with the statutory notice requirements necessary to reject
Rautaruukki's deficient submissions.
Petitioners state that section 1677m (d) of the statute requires
that, upon receiving a deficient submission, the Department is to,
``promptly inform * * * respondent of the nature of the deficiency and
shall, to the extent practicable, provide that person with an
opportunity to remedy or explain the deficiency in light of the time
limits established for the completion of * * * reviews.'' Petitioners
argue that in addition to its original questionnaire, the Department
issued a lengthy supplemental questionnaire in the case, which
specifically requested clarification of Rautaruukki's PLSPEC and CONNUM
assignments, as well as its submitted cost information, including cost
``extras.''
Petitioners state that section 1677e(b) of the statute provides
that if a respondent fails ``to cooperate by not acting to the best of
its ability to comply with * * * the Department's request for
information, * * * the Department in reaching its determination may use
an inference that is adverse to the interests of that party in
selecting from among the facts otherwise available.'' Petitioners claim
that Rautaruukki has not acted to the best of its ability to comply
with the Department's instructions in this review; therefore, the
Department should use an adverse inference when applying facts
available. Petitioners assert that the Department should apply the
highest rate from any prior segment of this proceeding--32.80 percent.
Respondent claims that it provided the necessary information
requested by the Department during this administrative review. In
Rautaruukki's view, its cooperation is confirmed by the record.
Respondent argues that it provided information which was within its
corporate control and sought information from other companies as well
as the Government of Finland. Respondent states that it was fully
cooperative and responsive during the sales and cost verifications by
the Department, which extended over a period of ten days. Rautaruukki
claims it responded fully and promptly to the Department's requests,
and it assigned sufficient and appropriate personnel to insure the
orderly and accurate progression of the verification. Respondent argues
that the Department confirmed that the information submitted by
Rautaruukki was accurate, complete and verifiable through its testing
of Rautaruukki's responses against the company's normal accounting and
financial records, and that the Department reconciled Rautaruukki's
response to those records.
Department's Position
As indicated in previous comments, we disagree with petitioners
that the Department should reject Rautaruukki's responses, and apply
adverse total facts available. We are making the adjustments to
Rautaruukki's submitted data described above and using this data to
calculate Rautaruukki's antidumping duty margin. As the Department
finds that the use of total facts available is not appropriate, the
issue of whether or not we should apply adverse facts available is
moot.
Final Results of Review
As a result of our review, we determine that the following
weighted-average margin exists:
------------------------------------------------------------------------
Period of Margin
Manufacturer/exporter review (percent)
------------------------------------------------------------------------
Rautaruukki Oy............................. 8/1/94-7/31/95 24.95
------------------------------------------------------------------------
The Department shall determine, and the Customers Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and normal value may vary from the
percentage stated above. The Department will issue appraisement
instructions directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of this notice of final results of review for all
shipments of certain cut-to-length carbon steel plate from Finland
within the scope of the order entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided by section
751(a) of the Tariff Act: (1) The cash deposit rate for the reviewed
company will be the rate listed above; (2) for previously reviewed or
investigated companies not listed above, the rate will continue to be
the company-specific rate published for the most recent period; (3) if
the exporter is not a firm covered in this review, a prior review, or
the original less-than-fair-value (LTFV) investigation, but the
manufacturer is, the cash deposit rate will be the rate established for
the most recent period for the manufacturer of the merchandise; and (4)
for cash deposit for all other manufacturers or exporters will continue
to be 32.80 percent, the ``all others'' rate established in the LTFV
investigation. See Antidumping Duty Order: Certain Cut-to-Length Carbon
Steel Plate from Finland, 58 FR 44165 (August 19, 1993). These
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This 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 353.34(d). Timely written notification of
return/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 administrative review and notice are published in accordance
with section 751(a)(1) of the Act and 19 CFR 353.22.
Dated: April 2, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-9426 Filed 4-14-97; 8:45 am]
BILLING CODE 3510-DS-M
