[Federal Register Volume 64, Number 145 (Thursday, July 29, 1999)]
[Notices]
[Pages 41213-41218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19303]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-826]
Preliminary Determinations of Sales at Less Than Fair Value:
Certain Cut-To-Length Carbon-Quality Steel Plate Products From Italy
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: July 29, 1999.
FOR FURTHER INFORMATION CONTACT: Howard Smith or Maisha Cryor, Office
4, Group II, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-5193 or (202) 482-5841,
respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the statute are
reference 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 Italy are being, or
are likely to be, sold 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, Italy, Japan, Republic of
Korea, and Former Yogoslav Republic of Macedona, 64 FR 12959 (March 16,
1999) (``Initiation Notce), the following events have occurred:
In their petition, the petitioners \1\ identified Ferriera
Siderscal SpA (``FS''), ILVA SpA (``ILVA''), Palini & Bertoli SpA
(``P&B''), and Siderurgica Villalvernia SpA (``SV''), as possible
exporters of CTL plate from Italy. On March 15, 1999, we requested data
on all producers and exporters of the subject merchandise during the
period of investigation (``POI'') from the U.S. embassy in Rome. The
U.S. embassy informed us that only ILVA and P&B are manufacturers and
exporters to the United States of carbon steel plate. Based on this
information, and information contained in the petition, the Department
issued antidumping questionnaires to ILVA and P&B in March 1999.
According to the U.S.
[[Page 41214]]
embassy, SV closed its mill in 1995 and FS is only a manufacturer of
cold finished bars and hot-rolled billets and bars. However, based upon
information contained in the petition, the Department also issued
antidumping questionnaires to FS and SV in March 1999.\2\
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\1\ The petitioners are Bethlehem Steel Corporation, Gulf States
Steel, Inc., PPSCO 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, business practices,
and sales and production of the merchandise under investigation.
Section 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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On March 26, 1999, ILVA requested that it be excused from reporting
certain home market sales of foreign like product. Specifically, ILVA
sought to be excused from reporting all home market sales of CTL plate
produced from plate-in-coil as well as affiliated resellers' sales of
quarto plate (universal mill plate). Because ILVA only sold quarto
plate in the United States, it maintained that it should not be
required to report home market sales of CTL plate produced from coil
since the Department would not compare such sales to ILVA's U.S. sales
for purposes of calculating a dumping margin. Furthermore, ILVA claimed
that its affiliated resellers' sales of quarto plate constituted an
insignificant percentage of its total home market sales of foreign like
product and, thus, it should be excused from reporting these downstream
sales. On May 3, 1999, the Department denied ILVA's requests with one
exception. Based on ILVA's relationship with one affiliated reseller,
the nature of which is proprietary, the Department allowed ILVA to
report sales of foreign like product to the reseller, rather than sales
by the reseller.
On May 17, 1999, ILVA further requested that it be excused from
reporting home market sales of certain products that are commercially
identified as bar products. However, the Department found these
products to be within the scope of the current CTL investigations and,
thus, required ILVA to report all of its home market sales of such
products. For further information regarding this issue, see the ``Scope
Comments'' x section of this notice.
In April 1999, the United States International Trade Commission
(``ITC'') issued an affirmative preliminary injury determination in
this case (see Investigation No. 731-TA-815-822). In April and May
1999, The Department received a response to all applicable sections of
the questionnaire from ILVA and P&B. On March 28, 1999, and May 3,
1999, respectively, SV and FS submitted letters to the Department
stating that they did not produce the merchandise under investigation,
nor did they export such merchandise to the United States. In letter
dated May 14, 1999, the Department informed FS and SV that their claims
are subject to verification and that if the Department finds that they
should have responded to the antidumping questionnaire, the Department
would rely on facts available in making its determination with respect
to FS and/or SV.
We issued supplemental questionnaires for Sections A, B, C and D to
ILVA and P&B in May and June 1999 and received responses to these
questionnaires along with revised home market and U.S. sales listings
in June 1999.
In June and July 1999, the petitioners submitted comments for the
Department's consideration in its preliminary determination. Also, in
July 1999, ILVA submitted sales and cost listings containing additional
information requested by the Department.
Partial Facts Available
Section 776(a)(2) of the Act provides that ``if an interested party
or any other person--(A) withholds information that has been requested
by the administering authority; (B) fails to provide such information
by the deadlines for the submission of the information or in the form
and manner requested, subject to subsections (c)(1) and (e) of section
782; (C) significantly impedes a proceeding under this title; or (D)
provides such information but the information cannot be verified as
provided in section 782(i), the administering authority shall, subject
to section 782(d), use the facts otherwise available in reaching the
applicable determination under this title.''
Section 776(b) of the Act provides that adverse inferences may be
used when a party has failed to cooperate by not acting to the best of
its ability to comply with a request for information.
The Department resorted to the use of facts available in adjusting
the reported cost of certain affiliated supplier inputs under the
``transactions-disregarded'' and the ``major input rule'' of section
773(f)(2) & (3) of the Act. For a detailed discussion of this topic see
the ``Cost of Production Analysis--Calculation of COP'' section of this
notice.
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 no exceeding 1250 mm, and of a nominal or
actual thickness of not less then 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 cooper, 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 of vanadium, or 0.15 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;
[[Page 41215]]
(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, 7208.53.000, 7208.90.000,
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045,
7211.90.000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050,
7225.40.7000, 7225.50.6000, 7225.90.0090, 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 SpA (``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 products). 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 preliminary treating them as covered merchandise for purposes of
these investigations.
Period of Investigation
The POI is January 1, 1998, through December 31, 1998.
Fair Value Comparisons
To determine whether sales of CTL plate 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. In accordance
with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-
average EPs for comparison to weighted-average NVs.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by ILVA and P&B covered by the description in the
``Scope of Investigation'' section, above and sold in Italy 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, normal thickness, nominal width,
patterns in relief, and descaling.
In addition, we compared U.S. sales of prime merchandise only with
home market sales of prime merchandise. Because neither ILVA nor P&B
sold 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 Final Determination of Sales at Less Than Fair Value:
Stainless Steel Wire 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
[[Page 41216]]
selling, general and administrative (``SG&A'') expenses and profit.
With respect to U.S. price and EP transactions, the LOT is also the
level of the starting-price sale, which is usually from the exporter to
the importer.
To determine whether NV sales are at a different LOT than EP
transactions, 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 an LOT adjustment under section
773(a)(7)(A) of the Act.
P&B reported home market sales to three customer categories through
one channel of distribution. For its U.S. sales, P&B reported EP sales
to one customer category through one channel of distribution. ILVA
reported home market sales to two customer categories through four
channels of distribution. For its U.S. sales, ILVA reported EP sales to
two customer categories through one channel of distribution. In their
responses, neither ILVA nor P&B claimed that their sales to home market
customers were made at a different LOT than their sales to U.S.
customers. Therefore, neither company claimed a LOT adjustment.
In determining whether separate LOTs actually existed in the home
market and U.S. market for each respondent, we examined whether the
respondent's sales involved different marketing stages (or their
equivalent) based on the channel of distribution, customer categories
and selling functions. Based on an analysis of the selling functions
performed in the home market channel of distribution, we find that each
respondent's home market sales comprise a single LOT. In analyzing each
company's selling activities for EP sales, we noted that the sales
involved basically the same selling functions as those associated with
the home market LOT described above. Therefore, based upon this
conclusion, we have determined that the LOT for each respondent's EP
sales is the same as that of its home market sales. See the July 19,
1999, memoranda to the file regarding Palini and Bertoli (P&B): Level
of Trade Analysis, and Ilva SpA (ILVA): Level of Trade Analysis.
Export Price
ILVA and P&B reported as EP transactions their sales of subject
merchandise sold to unaffiliated U.S. customers prior to importation.
We calculated EP, in accordance with section 772(a) of the Act,
because the merchandise was sold to the first unaffiliated purchaser in
the United States prior to importation and CEP methodology was not
otherwise warranted, based on the facts of record. We based EP on the
price to unaffiliated purchasers in the United States. We made
deductions to the starting price for billing adjustments and, in
accordance with section 772(c)(2)(A) of the Act, movement expenses.
Movement expenses included, where appropriate, foreign inland freight,
foreign brokerage and handling charges, ocean freight, and marine
insurance.
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 the 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 respective
aggregate volume of U.S. sales for the subject merchandise, we
determined that the home market was viable for each respondent.
2. Affiliated-Party Transactions and Arm's-Length Test
Both respondents reported home market sales to affiliated parties.
Therefore, we have applied the arm's-length test to these sales by
comparing them to sales of identical merchandise from the respondent to
its 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 prices of sales to affiliated
and unaffiliated customers net of all movement charges, direct selling
expenses, 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, Preamble--Department's Final
Antidumping Regulations (May 19, 1997). 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 (see, e.g., SSWR at 63
FR 40451). Where the exclusion of such sales eliminated all sales of
the most appropriate comparison product, we made a comparison to the
next most similar model.
3. Cost of Production Analysis
In their petition, the petitioners submitted an allegation pursuant
to section 773(b) of the Act that ILVA and P&B 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 each Italian exporter sold CTL plate in the home market
at prices less than the COP. Accordingly, we initiated COP
investigations with respect to the two Italian exporters to determine
whether sales were made at prices below the COP pursuant to section
773(b) of the Act (see Initiation Notice at 64 FR 12959, 12963).
We conducted the COP analysis as described below.
A. Calculation of COP
In accordance with section 773(b)(3) of the Act, for each
respondent we calculated COP based on the sum of the respondent's
materials and fabrication cost for the foreign like product, plus an
amount for home market SG&A, interest expenses, and packing costs.
Except for the following adjustments to ILVA's costs reported by
the respondents' to calculate COP:
1. During the POI, ILVA produced slabs which it sold to its wholly
owned subsidiary, ILVA Lamiere e Tubi S.p.A. (ILT). ILT rolled the
slabs into quarto plate to ILVA. During the POI, ILT only sold quarto
plate to ILVA, which resold
[[Page 41217]]
the plate to affiliated and unaffiliated customers in the U.S. and home
markets. For cost reporting purposes, ILVA treated itself and ILT as
one company and thus reported ILT's rolling cost as part of the COP.
Because ILVA ``collapsed'' itself with ILT it did not value the inputs
that it purchased from ILT in accordance with section 773(f)(2) of the
Act or use the major input rule of section 773(f)(3) of the Act.
Section 351.401(f) of the Department's regulations stipulates that the
Department will treat two or more affiliated producers as a single
entity where, among other things, the department concludes there is a
significant potential for the manipulation of price or production in
order to evade antidumping duties. However, in the instant situation,
based upon the information on the record, the details of which are
proprietary, the Department has preliminary determined that it is not
appropriate to collapse ILVA and ILT because there is not a significant
potential for the manipulation of price or production in order to evade
antidumping duties. See ILVA Collapsing Memorandum (July 19, 1999).
Because the Department has not collapsed ILVA and ILT, and the rolling
performed by ILT is a major input to the production of plate sold by
ILVA, the major input role should be applied to value the input that
ILVA obtained from ILT (see Notice of Final Results and Partial
Recission of Antidumping Duty Administrative Review: Certain Pasta From
Italy, 64 FR 6615, 6621 (February 10, 1999)). The major input rule of
section 773(f)(3) of the Act provides that the Department may value
inputs obtained from affiliated parties at the highest of the transfer
price, market price, or the affiliated supplier's costs. The
petitioners' maintain that the major input rule should be used to value
the slabs that ILT purchased from ILVA. However, the Department has
treated ILVA as the producer and viewed ILT as an affiliate who
provides services to the producer. Thus, the Department used the major
input rule to value the rolling services provided by ILT, but found no
basis to apply it in valuing the slabs produced by ILVA. In the absence
of a market price or a transfer price for rolling slabs, for this
preliminary determination, the Department has constructed a transfer
price by increasing the reported rolling costs for quarto plate by
ILT's general and administrative (G&A) expenses and profit.
2. ILVA included ILT's G&A expenses in its reported G&A expense
because it treated ILVA and ILT as one entity for cost reporting
purposes. Because the Department has treated ILVA and ILT as separate
entities, the Department reduced ILVA's reported G&A expense by the
amount of ILT's G&A expenses included therein.
3. The Department excluded extraordinary gains and losses from
ILVA's reported G&A expenses because ILVA failed to adequately explain
how these expenses were related to its operations.
4. ILVA uses iron pellets to produce the merchandise under
investigation. During the POI, ILVA purchased iron pellets from two
suppliers, one of which ILVA identified as an affiliated party. In
order to satisfy the requirements of section 773(f)(2) of the Act
(transactions between affiliated parties disregarded), ILVA compared
the price that it paid to purchase iron pellets from the affiliated
party to the price that it paid to purchase iron pellets from the
``unaffiliated'' supplier. However, the record shows that ILVA and the
``unaffiliated'' supplier jointly own and control the affiliated
supplier. Therefore, in accordance with section 771(33)(F) of the Act,
the Department has preliminary determined that ILVA and the supplier
which ILVA identified as an unaffiliated party (i.e., the joint venture
partner) are in fact affiliated, pursuant to section 771(33)(F).
Furthermore, the iron pellets ILVA purchased from its joint venture
partner were in fact produced by ILA's affiliated supplier. Thus, for
all these transactions, ILVA purchased iron pellets, either directly or
indirectly, from its affiliated supplier. Therefore, we have
preliminarily determined to disregard these sales, unless ILVA can show
that such sales reflect market value as required under section
773(f)(2). In the absence of such evidence, for the preliminary
determination, the Department has adjusted the cost of iron pellets
included in the reported costs using the information available as to
what the price of iron pellets would have been if the iron pellets had
been purchased from parties who are not affiliated with ILVA, in
accordance with section 773(f)(2). For this preliminary determination,
as facts available for this information, we used the weighted-average
Italian import values of iron ore as provided by the petitioners in
their July 8, 1999 submission.
5. The Department reduced ILVA's reported costs for models sold in
the United States by the cost of foreign transportation and port
loading expenses for U.S. sales, which were reclassified as movement
expenses.
B. Test of Home Market Sales Prices
We compared the weighted-average COP figures to home market sale
prices 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. In determining whether to disregard home market
sales made at prices below 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), where less than 20 percent of
respondent's sales of a given product were at prices below the COP, we
did not disregard any below-cost sales of that product because we
determined that the below-cost sales were not made in ``substantial
quantities.'' Where 20 percent or more of a respondent's sales of a
given product during the POI were at prices less than the COP, we
determined such sales to have been made in ``substantial quantities''
within 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.
We found that, for certain grades of CTL plate, 20 percent of more
of ILVA's and P&B home market sales within an extended period of time
were at prices below the 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 for remaining sales as the basis for
determining NV if such sales existed, in accordance with section
773(b)(1) of the Act.
Price-to-Price Comparisons
We calculated NV based on delivered prices to unaffiliated
customers to prices to affiliated customers that we determined to be at
arm's length prices. We made adjustments, where appropriate, from the
starting price for discounts and rebates, billing adjustments, inland
freight, shipping revenue, freight insurance, and
[[Page 41218]]
warehousing expenses. We made adjustments for differences in the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. In
addition, we made adjustments under section 773(a)(6)(C)(iii) of the
Act for differences in circumstances of sale involving imputed credit
expenses (less interest revenue) warranties and commissions, where
appropriate. We also made adjustments for indirect selling expenses
incurred on comparison market or U.S. sales where commissions were
granted on sales in one market but not in the other (the commission
offset), pursuant to 19 CFR 351.410(e). 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. In both its narrative
response to the Department's questionnaire and in its home market sales
listing, P&B described the terms of certain home market sales as F.O.B.
plant. However, P&B reported freight expenses for these sales in its
home market sales database. For home market sales transactions where
this discrepancy occurs, we did not reduce P&B's home market sales
price by the reported freight expense.
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 determined 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 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 9, 1996).) The use of an adjustment
period was not warranted in this case because of 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
Customers 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 EP, 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
------------------------------------------------------------------------
ILVA SpA................................................ 3.67
Palini & Bertoli SpA.................................... 6.35
All Others.............................................. 5.78
------------------------------------------------------------------------
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 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 10, 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. 99-19303 Filed 7-28-99; 8:45 am]
BILLING CODE 3510-DS-M
