[Federal Register Volume 64, Number 145 (Thursday, July 29, 1999)]
[Notices]
[Pages 41198-41202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19300]
[[Page 41197]]
_______________________________________________________________________
Part II
Department of Commerce
_______________________________________________________________________
International Trade Administration
_______________________________________________________________________
Preliminary Determination of Sales at Less Than Fair Value: Certain
Cut-to-Length Carbon-Quality Steel Plate Products From France; India;
Indonesia; Italy; Japan and the Republic of Korea; Notice
Federal Register / Vol. 64, No. 145 / Thursday, July 29, 1999 /
Notices
[[Page 41198]]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-427-816]
Preliminary Determination of Sales at Less Than Fair Value:
Certain Cut-To-Length Carbon-Quality Steel Plate Products from France
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: July 29, 1999.
FOR FURTHER INFORMATION CONTACT: Jim Terpstra or Frank Thomson, Group
II, Office 4, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3965 or (202) 482-4793, respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (``the Act'') by
the Uruguay Round Agreements Act (``URAA''). In addition, unless
otherwise indicated, all references are made to the Department's
regulations at 19 CFR Part 351 (1998).
Preliminary Determination
We preliminarily determine that certain cut-to-length carbon-
quality steel plate products (``CTL plate'') from France are being, 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
Since the initiation of this investigation (Notice of Initiation of
Antidumping Investigations: Certain Cut-To-Length Carbon-Quality Steel
Plate from Czech Republic, France, India, Indonesia, Italy, Japan,
Republic of Korea, and Former Yugoslav Republic of Macedonia (64 FR
12959, March 16, 1999)) (``Initiation Notice''), the following events
have occurred:
In their petition, the petitioners 1 identified Usinor
S.A. (``Usinor'') and its affiliates, Creusot Loire Industrie
(``CLI''), and GTS Industries S.A. (``GTS'') as possible exporters of
CTL plate from France. We requested on March 12, 1999, data on all
producers and exporters of the subject merchandise during the period of
investigation (``POI'') from the American Embassy in Paris. Based on
information on the record we issued antidumping questionnaires to
Usinor, CLI and GTS on March 17, 1999. 2
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\1\ The petitioners are Bethlehem Steel Corporation, Gulf States
Steel, Inc., IPSCO Steel Inc., the United Steelworkers of America,
and the U.S. Steel Group (a unit of USX Corporation).
\2\ Section A of the questionnaire requested general information
concerning the company's corporate structure and business practices,
the merchandise under investigation that it sells, and the sales of
that merchandise in all markets. Sections B and C of the
questionnaire requested home market sales listings and U.S. sales
listings. Section D of the questionnaire requested information
regarding the cost of production of the foreign like product and the
constructed value of the merchandise under investigation. Section E
of the questionnaire requested information regarding the cost of
further manufacture or assembly performed in the United States.
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In April 1999, the United States International Trade Commission
(``ITC'') issued an affirmative preliminary injury determination in
this case (see ITC Investigation No. 731-TA-815-822).
On May 10, 1999, Usinor submitted a consolidated response to
sections A, B, and C of the questionnaire on behalf of GTS and Sollac
S.A. (``Sollac'') (collectively referred to as ``Usinor''). Usinor
identified Sollac in its questionnaire responses as an affiliated
producer of subject merchandise during the POI. Usinor submitted a
response to section D of the questionnaire on May 14, 1999, and a
response to section E on May 21, 1999.
On April 12, 1999, Usinor requested that it be allowed not to
report information for the following entities that are affiliated with
Usinor: 1) Eurodecoupe, a maker of precision-cut specialty shapes that
sold subject merchandise in the home market; 2) CLI, a maker of
specialty steel intended for nuclear and high pressure applications;
and 3) certain affiliated downstream service centers/reprocessors.
Based on the reasons and factual representations outlined in Usinor's
request, on May 14, 1999, we granted this request and allowed Usinor to
exclude these sales from its response. However, we indicated that we
would review this matter at verification.
We issued a supplemental questionnaire for Sections A, B, and C to
Usinor in May 1999 and received a response to this questionnaire along
with revised home market and U.S. sales listings in June 1999. We
issued a supplemental questionnaire for Sections D and E to Usinor in
June 1999 and received a response to this questionnaire in June 1999.
We received revised home market and U.S. sales listings, along with
revised cost of production, constructed value, and further
manufacturing cost tapes in July 1999.
In May and June 1999, Usinor submitted additional clarifications to
its responses. Also, on July 9, 1999, petitioners submitted comments
for the Department's consideration in the preliminary determination.
Scope of Investigation
The products covered by the scope of this investigation are certain
hot-rolled carbon-quality steel: (1) Universal mill plates (i.e., flat-
rolled products rolled on four faces or in a closed box pass, of a
width exceeding 150 mm but not exceeding 1250 mm, and of a nominal or
actual thickness of not less than 4 mm, which are cut-to-length (not in
coils) and without patterns in relief), of iron or non-alloy-quality
steel; and (2) flat-rolled products, hot-rolled, of a nominal or actual
thickness of 4.75 mm or more and of a width which exceeds 150 mm and
measures at least twice the thickness, and which are cut-to-length (not
in coils). Steel products to be included in this scope are of
rectangular, square, circular or other shape and of rectangular or non-
rectangular cross-section where such non-rectangular 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. Steel products that meet the noted
physical characteristics that are painted, varnished or coated with
plastic or other non-metallic substances are included within this
scope. Also, specifically included in this scope are high strength, low
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium,
titanium, vanadium, and molybdenum. Steel products to be included in
this scope, regardless of Harmonized Tariff Schedule of the United
States (HTSUS) definitions, are products in which: (1) Iron
predominates, by weight, over each of the other contained elements, (2)
the carbon content is two percent or less, by weight, and (3) none of
the elements listed below is equal to or exceeds the quantity, by
weight, respectively indicated: 1.80 percent of manganese, or 1.50
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, or
0.41 percent of titanium, or 0.15 percent of vanadium, or 0.15
[[Page 41199]]
percent zirconium. All products that meet the written physical
description, and in which the chemistry quantities do not equal or
exceed any one of the levels listed above, are within the scope of
these investigations unless otherwise specifically excluded. The
following products are specifically excluded from these investigations:
(1) Products clad, plated, or coated with metal, whether or not
painted, varnished or coated with plastic or other non-metallic
substances; (2) SAE grades (formerly AISI grades) of series 2300 and
above; (3) products made to ASTM A710 and A736 or their proprietary
equivalents; (4) abrasion-resistant steels (i.e., USS AR 400, USS AR
500); (5) products made to ASTM A202, A225, A514 grade S, A517 grade S,
or their proprietary equivalents; (6) ball bearing steels; (7) tool
steels; and (8) silicon manganese steel or silicon electric steel.
The merchandise subject to these investigations is classified in
the HTSUS under subheadings: 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, 7212.50.0000, 7225.40.3050,
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000,
7226.91.8000, 7226.99.0000.
Although the HTSUS subheadings are provided for convenience and
Customs purposes, the written description of the merchandise under
investigation is dispositive.
Scope Comments
As stated in our notice of initiation, we set aside a period for
parties to raise issues regarding product coverage. In particular, we
sought comments on the specific levels of alloying elements set out in
the description above, the clarity of grades and specifications
excluded from the scope, and the physical and chemical description of
the product coverage.
On March 29, 1999, Usinor, a respondent in the French antidumping
and countervailing duty investigations and Dongkuk Steel Mill Co., Ltd.
and Pohang Iron and Steel Co., Ltd., respondents in the Korean
antidumping and countervailing duty investigations (collectively the
Korean respondents), filed comments regarding the scope of the
investigations on CTL plate and the Department's model matching
criteria. On April 14, 1999, the petitioners filed comments regarding
Usinor's and the Korean respondents' comments regarding model matching.
In addition, on May 17, 1999, ILVA S.p.A. (ILVA), a respondent in the
Italian antidumping and countervailing duty investigations, requested
guidance on whether certain products are within the scope of these
investigations.
Usinor requested that the Department modify the scope to exclude:
(1) Plate that is cut to non-rectangular shapes or that has a total
final weight of less than 200 kilograms; and (2) steel that is 4'' or
thicker and which is certified for use in high-pressure, nuclear or
other technical applications; and (3) floor plate (i.e., plate with
``patterns in relief'') made from hot-rolled coil. Further, Usinor
requested that the Department provide clarification of scope coverage
with respect to what it argues are over-inclusive HTSUS subheadings
included in the scope language.
The Department has not modified the scope of these investigations
because the current language reflects the product coverage requested by
the petitioners, and Usinor's products meet the product description.
With respect to Usinor's clarification request, we do not agree that
the scope language requires further elucidation with respect to product
coverage under the HTSUS. As indicated in the scope section of every
Department antidumping and countervailing duty proceeding, the HTSUS
subheadings are provided for convenience and Customs purposes only; the
written description of the merchandise under investigation or review is
dispositive.
The Korean respondents requested confirmation whether the maximum
alloy percentages listed in the scope language are definitive with
respect to covered HSLA steels.
At this time, no party has presented any evidence to suggest that
these maximum alloy percentages are inappropriate. Therefore, we have
not adjusted the scope language. As in all proceedings, questions as to
whether or not a specific product is covered by the scope and, hence,
must be reported, should be timely raised with Department officials.
ILVA requested guidance on whether certain merchandise produced
from billets is within the scope of the current CTL plate
investigations. According to ILVA, the billets are converted into wide
flats and bar products (a type of long product). ILVA notes that one of
the long products, when rolled, has a thickness range that falls within
the scope of these investigations. However, according to ILVA, the
greatest possible width of these long products would only slightly
overlap the narrowest category of width covered by the scope of the
investigations. Finally, ILVA states that these products have different
production processes and properties than merchandise covered by the
scope of the investigations and therefore are not covered by the scope
of the investigations.
As ILVA itself acknowledges, the particular products in question
appear to fall within the parameters of the scope and, therefore, we
are preliminarily treating them as covered merchandise.
Period of Investigation
The POI is January 1, 1998 through December 31, 1998.
Fair Value Comparisons
To determine whether sales of CTL plate from France to the United
States were made at less than fair value, we compared the constructed
export price (``CEP'') to the Normal Value (``NV''), as described in
the ``Constructed 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 CEPs for comparison to weighted-average
NVs.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by Usinor covered by the description in the ``Scope
of Investigation'' section, above, and sold in France during the POI,
to be foreign like products for purposes of determining appropriate
product comparisons to U.S. sales. We compared U.S. sales to sales made
in the home market, where appropriate. 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.
In making the product comparisons, we matched foreign like products
based on the physical characteristics reported by the respondents in
the following order of importance (which are identified in Appendix V
of the questionnaire): Painting, quality, grade specification, heat
treatment, nominal thickness, nominal width, patterns in relief, and
descaling.
Because Usinor had no sales of non-prime merchandise in the United
States during the POI, we did not use home market sales of non-prime
merchandise in our product comparisons (see, e.g., Final Determination
of Sales at Less Than Fair Value: Stainless Steel Wire
[[Page 41200]]
Rod from Sweden (63 FR 40449, 40450, July 29, 1998) (``SSWR'')).
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 or CEP transaction. The NV
LOT is that of the starting-price sales in the comparison market or,
when NV is based on constructed value (``CV''), that of the sales from
which we derive selling, general and administrative (``SG&A'') expenses
and profit. With respect to U.S. price and CEP transactions, the LOT is
the level of the constructed sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or
CEP, 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 LOT adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is
more remote from the factory than the CEP level, and there is no basis
for determining whether the difference in the levels between NV and CEP
affects price comparability, we adjust NV under section 773(a)(7)(B) of
the Act (the CEP-offset provision). 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).
Usinor reported three customer categories (i.e., steel service
centers/resellers, pipe makers and original equipment manufacturers)
and five channels of distribution in the home market (i.e., sales made
by Usinor's affiliated producer Sollac, through its affiliated sales
network Sollac Vente France (SVF), directly to unaffiliated service
centers or end users (Channel 1), sales from Sollac, through SVF, to
its affiliated steel service center, SLPM, together with subsequent
resales by SLPM to unaffiliated end users (Channel 2), sales made by
Usinor's affiliated producer GTS Industries (GTS) directly to its
affiliated customer Europipe (Channel 3), sales made by GTS, through
SVF, directly to unaffiliated service centers or end users (Channel 4),
and sales from GTS, through SVF, to its affiliated steel service
center, SLPM, together with subsequent resales by SLPM to unaffiliated
end users (Channel 5)).
We determined that Usinor sold merchandise at two LOTs in the home
market during the POI. The first LOT involved sales through Channels 1,
3 and 4. The second LOT involved Usinor's sales through its affiliated
steel service center, SLPM, in Channels 2 and 5. We found significant
distinctions in selling activities and associated expenses between the
sales through Channels 2 and 5 and those through Channels 1, 3 and 4.
Based on these differences, we conclude that two LOTs existed in the
home market. From our analysis of the marketing process for these
sales, we also determined that sales through Channels 2 and 5 were made
at a more remote marketing stage than that for sales through Channels
1, 3 and 4. Because the large number of channels of distribution and
selling expenses involved in this analysis presents difficulty in
providing an adequate summary in this notice, see the LOT/CEP
Memorandum for a detailed explanation of the above, dated July 19,
1999, on file in Import Administration's Central Records Unit
(``CRU''), Room B-099, U.S. Department of Commerce, 14th and
Constitution Avenue, NW, Washington, DC.
Usinor reported three customer categories (i.e., steel service
centers/resellers, pipe makers and original equipment manufacturers)
and three channels of distribution in the United States: 1) CEP sales
made by Sollac, through its affiliated U.S. importer Francosteel, to
unaffiliated service centers or end users (Channel 6), 2) CEP sales
made by GTS, through its affiliated U.S. importer Francosteel, to
unaffiliated service centers or end users (Channel 7), and 3) CEP sales
from GTS directly to its affiliate Berg Steel, who further manufactured
the subject merchandise into non-subject merchandise, pipe, and resold
it to unaffiliated end users (Channel 8).
In order to determine whether separate LOTs actually existed
between the U.S. and home market, we reviewed the selling activities
associated with each channel of distribution. We determined that fewer
and different selling functions were performed for Usinor's CEP sales
than for sales at either of the home market LOTs and these differences
constitute differences in LOT. Therefore, we examined whether a LOT
adjustment was appropriate. The Department makes this adjustment when
it is demonstrated that a difference in LOTs affects price
comparability. See The Statement of Administrative Action accompanying
the URAA, H.R. Doc. No. 316, 103d Cong., 2d Sess. (1994) (hereinafter,
the ``SAA'') at 829-830. However, where the available data do not
provide an appropriate basis upon which to determine a LOT adjustment,
and where the NV is established at a LOT that is at a more advanced
stage of distribution than the LOT of the CEP transactions, we adjust
NV under section 773(a)(7)(B) of the Act (the CEP offset provision).
Because the LOT of the U.S. sales is different than either home market
LOTs, there is no reliable basis for quantifying a LOT adjustment in
accordance with section 773(a)(7)(A) of the Act. Further, we found that
the home market sales were at a more advanced stage of distribution
compared to sales at either U.S. LOT. Therefore, a CEP offset was
applied to NV for the NV-CEP comparisons. Because the large number of
channels of distribution and selling expenses involved in this analysis
presents difficulty in providing an adequate summary in this notice,
see the LOT/CEP Memorandum for a detailed explanation of our analysis.
Constructed Export Price
Usinor reported as CEP transactions the resales of its subject
merchandise by Francosteel to unaffiliated customers in the United
States (channels 6 and 7). We calculated CEP, in accordance with
subsection 772(b) of the Act, based on those sales to the first
unaffiliated purchaser that took place after importation into the
United States.
In addition, Usinor reported as CEP transactions sales of pipe
products which were further manufactured from CTL plate (subject
merchandise) by one of its affiliates in the United States (channel 8).
For these sales we used the price to the first unaffiliated customer
and deducted the costs of further manufacturing, in accordance with
section 772(d)(2) of the Act. We used the information in Usinor's
Section E response to calculate further manufacturing costs, except in
the following instances where the data were not properly quantified or
valued: (1) We increased the reported further manufacturing costs
because we disallowed an adjustment made to coating costs, (2) we
revised the reported further manufacturing G&A expense rate to reflect
the change we made to coating costs, and (3) we revised the reported
further manufacturing interest expense to reflect the interest expenses
incurred by Berg Steel Pipe Corporation (``Berg''), Usinor's affiliate
that further manufactures the plate in the United States. For further
information see
[[Page 41201]]
Memorandum to Neal Halper, dated July 19, 1999.
We based CEP on the packed FOB or delivered prices to unaffiliated
purchasers in the United States. We made adjustments to the starting
price, where appropriate, for freight revenue, interest revenue, and
billing adjustments. We made deductions for early payment discounts and
rebates, where applicable. We also made deductions for movement
expenses in accordance with section 772(c)(2)(A) of the Act; these
included, where appropriate, foreign inland freight, foreign brokerage
and handling, ocean freight, marine insurance, U.S. brokerage and
handling, foreign trade zone fees, U.S. customs duties (including
harbor maintenance fees and merchandise processing fees), and U.S.
inland freight expenses (freight from warehouse to the customer). In
accordance with section 772(d)(1) of the Act, we deducted those selling
expenses associated with economic activities occurring in the United
States, including direct selling expenses (credit costs, warranty
expenses, and other direct selling expenses), inventory carrying costs,
other indirect selling expenses, and commissions. We also deducted an
amount for further-manufacturing costs, where applicable, in accordance
with section 772(d)(2) of the Act and made an adjustment for profit in
accordance with section 772(d)(3) of the Act.
Normal Value
After testing (1) home market viability, (2) whether sales to
affiliates were at arm's-length prices, and (3) whether home market
sales were at below-cost prices, we calculated NV as noted in the
``Price-to-Price Comparisons'' and ``Price-to-CV Comparisons'' sections
of this notice.
1. Home Market Viability
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 (i.e.,
the aggregate volume of home market sales of the foreign like product
is equal to or greater than five percent of the aggregate volume of
U.S. sales), we compared Usinor'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 Usinor'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 Usinor.
2. Affiliated-Party Transactions and Arm's-Length Test
We have applied the arm's-length test to affiliated-party
transactions by comparing them to sales of identical merchandise from
Usinor to unaffiliated home market customers. If these affiliated-party
sales satisfied the arm's-length test, we used them in our analysis.
Sales to affiliated customers in the home market not made at arm's-
length prices (if any) were excluded from our analysis because we
considered them to be outside the ordinary course of trade. See 19 CFR
351.102.
To test whether these sales were made at arm's-length prices, we
compared on a model-specific basis the starting prices of sales to
affiliated and unaffiliated customers net of all movement charges,
direct selling expenses, discounts and rebates, and packing. Where, for
the tested models of subject merchandise, prices to the affiliated
party were on average 99.5 percent or more of the price to the
unaffiliated parties, we determined that sales made to the affiliated
party were at arm's length. See 19 CFR 351.403(c) and 62 FR at 27355.
In instances where no price ratio could be constructed for an
affiliated customer because identical merchandise was not sold to
unaffiliated customers, we were unable to determine that these sales
were made at arm's-length prices and, therefore, excluded them from our
LTFV analysis. Where the exclusion of such sales eliminated all sales
of the identical or most similar comparison product, we made a
comparison to the next most similar model. See, (e.g., SSWR).
3. Cost of Production Analysis
In their petition, the petitioners submitted an allegation pursuant
to section 773(b)(1) of the Act that Usinor had made sales in the home
market at less than the cost of production (``COP''). Our analysis of
the allegation indicated that there were reasonable grounds to believe
or suspect that Usinor sold CTL plate in the home market at prices less
than the COP. Accordingly, we initiated COP investigations with respect
to Usinor to determine whether sales were made at prices less than the
COP pursuant to section 773(b) of the Act (see Initiation Notice, 64 FR
12959, 12962).
We conducted the COP analysis described below.
A. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated COP
based on the sum of Usinor's cost of materials and fabrication for the
foreign like product, plus amounts for home market selling, general and
administrative expenses (``SG&A''), interest expense, and packing
costs.
We relied on the COP data Usinor submitted in its Section D
questionnaire responses, without adjustment, to calculate weighted-
average COPs for the POI.
B. Test of Home Market Sales Prices
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 COP. In determining whether to disregard home market sales made
at prices less than the COP, we examined whether (1) within an extended
period of time, such sales were made in substantial quantities, and (2)
such sales were made at prices which permitted the recovery of all
costs within a reasonable period of time. On a product-specific basis,
we compared the COP to the home market prices, less any applicable
movement charges, rebates, discounts, and direct and indirect selling
expenses.
C. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of respondent's sales of a given product were at prices less
than the COP, we do not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Alternatively, where 20 percent or more of
a respondent's sales of a given product during the POI (normally equal
to one year, but not less than six months) are at prices less than the
COP, we determined that such sales have been made in ``substantial
quantities'' in accordance with sections 773(b)(2)(B) and (C) 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 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, in such
instances, we disregarded the below-cost sales.
In this investigation, we found that, for certain products, more
than 20 percent of Usinor'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 excluded these sales and used the remaining above-cost
sales as the basis for determining NV where such sales existed, in
accordance with section 773(b)(1) of the Act.
[[Page 41202]]
D. Calculation of CV
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of Usinor's cost of materials, fabrication, SG&A,
interest, U.S. packing costs, and profit. We made similar adjustments
as those described above for COP. In accordance with section
773(e)(2)(A) of the Act, we based SG&A and profit on the amounts
incurred and realized by the respondent in connection with the
production and sale of the foreign like product in the ordinary course
of trade for consumption in the foreign country. For selling expenses,
we used the weighted-average home market selling expenses.
Price-to-Price Comparisons
We calculated NV based on delivered prices to unaffiliated
customers or prices to affiliated customers that we determined to be at
arm's-length prices. We made adjustments to the starting price, where
appropriate, for billing adjustments. We made deductions, where
appropriate, from the starting price for early payment discounts, other
discounts, rebates, and inland freight. We made circumstance of sale
(COS) adjustments, in accordance with section 773(a)(6)(c)(iii) of the
Act, for direct selling expenses, including warranty expenses, credit
expenses, and other direct selling expenses. In addition, we made
adjustments for differences in the merchandise in accordance with
section 773(a)(6)(C)(ii) of the Act. Finally, we deducted home market
packing costs and added U.S. packing costs in accordance with sections
773(a)(6)(A) and (B) of the Act.
Price-to-CV Comparisons
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act. Where we compared CV to
CEP, we deducted from CV the weighted-average home market direct
selling expenses and added U.S. selling expenses.
Currency Conversion
We made currency conversions into U.S. dollars based on the
exchange rates 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, March 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 French franc 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 imports of subject
merchandise that are entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register.
We will instruct the Customs Service to require a cash deposit or
the posting of a bond equal to the weighted-average amount by which the
NV exceeds the CEP, as indicated in the chart below. These suspension-
of-liquidation instructions will remain in effect until further notice.
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
Exporter/manufacturer average margin
percentage
------------------------------------------------------------------------
Usinor.................................................. 29.88
All Others.............................................. 29.88
------------------------------------------------------------------------
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 August 25, 1999, and rebuttal briefs no later than September
1, 1999. A list of authorities used and an executive summary of issues
should 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 September 7, 1999, 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 75 days after the date of this
preliminary determination.
This determination is issued and published pursuant to sections
733(d) and 777(i)(1) of the Act.
Dated: July 19, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-19300 Filed 7-28-99; 8:45 am]
BILLING CODE 3510-DS-P
