OMB Number: OMB 0412-0552.

Form Number: N/A.

Title: Financial Status Report.

Type of Submission: Renewal of Information Collection.

Purpose: In its appropriations act, Congress always requests country level financial expenditure data in order to determine whether funds appropriated to the Agency are being used for their intended purpose and are not used to support activities that are not in the US National Interest. Generally, this has been fairly straightfoward for assistance recipients who work specifically in one country, but harder to capture in the cases where recipients operate at a regional scale. Therefore, for each country where USAID spends money, careful review is necessary in order to be able to certify that funds expended do not go into programs where funding is prohibited, restricted or limited. Financial expenditure data by country is used by the agency to meet several reporting requirements for Congress. Country specific financial expenditure data is also used to determine whether the agency is meeting Congressional ceilings and earmarks. In addition, Congressional notification is required for activities in certain countries (Burma, Cambodia, Colombia, Democratic Republic of Congo, etc), as well as activities covering certain subject matter such as activities promoting country participation in the Kyoto Protocol, use of notwithstanding authority for supporting energy programs aimed at reducing greenhouse gas emissions. In each case, Congress request to know the amount of taxpayer dollars that is expended by the program or in the specific country.

USAID currently requires grant and cooperative agreement recipients who work in multiple countries to provide expenditure reports by country. The purpose of this notice is to extend the class deviation to the statute from the Office of Management and Budget in accordance with 22 CFR 226.4. The information is being collected so that USAID can ensure programs do not fund activities in countries where the United States Congress has prohibited or fund programs where Congress has limited the types of activities that my be funded.

Annual Reporting Burden:

  Respondents: 80.

  Total annual responses: 320.

  Total annual hours requested: 800 hours.

The NACMCF was established in March 1988, in response to a recommendation in a 1985 report of the National Academy of Sciences Committee on Food Protection, Subcommittee on Microbiological Criteria, “An Evaluation of the Role of Microbiological Criteria for Foods.” The current Charter for the NACMCF and other information about the Committee are available for viewing on the NACMCF homepage at www.fsis.usda.gov/ophs/nacmcf/.

The Committee provides scientific advice and recommendations to the Secretary of Agriculture and the Secretary of Health and Human Services concerning the development of microbiological criteria by which the safety and wholesomeness of food can be assessed. For example, the Committee assists in the development of criteria for microorganisms that indicate whether food has been processed under sanitary conditions.

Appointments to the Committee will be made by the Secretary of Agriculture after consultation with the Secretary of Health and Human Services to ensure that recommendations made by the Committee take into account the needs of the diverse groups served by the Department. Membership shall include, to the extent practicable, individuals with demonstrated ability to represent minorities, women, and persons with disabilities. Nominees who are selected will be required to submit a Financial Disclosure form AD-755, available on-line at: www.fsis.usda.gov/ophs/nacmcf/.

Given the complexity of issues, the full Committee expects to meet at least once yearly and the meetings will be announced in the Federal Register . The subcommittees will meet as frequently as deemed necessary by the chairperson and will be held as working group meetings in an open public forum. The subcommittee meetings will not be announced in the Federal Register . FSIS will announce the agenda and subcommittee working group meetings through the Constituent Update available on-line at www.fsis.usda.gov. NACMCF holds subcommittee working groups in order to accomplish the work of NACMCF; all work accomplished by the subcommittees is reviewed and approved by the full Committee during a Federal Register announced public meeting of the full Committee. The subcommittee may invite technical experts to present information for consideration by the subcommittee. All data and records available to the subcommittee are expected to be available to the public at the time the full Committee reviews and approves the work of the subcommittee.

Appointment to the Advisory Committee is a two-year term; renewable for three consecutive terms. Members must be prepared to work outside of scheduled Committee and subcommittee meetings, and may require document preparation. Committee members serve on a voluntary basis; however, travel reimbursement and per diem is available.

Public awareness of all segments of rulemaking and policy development is important. Consequently, in an effort to better ensure that minorities, women, and persons with disabilities are aware of this notice, FSIS will announce it and provide copies of this Federal Register publication both on the FSIS and NACMCF web pages and in the FSIS Constituent Update. FSIS provides a weekly FSIS Constituent Update, which is communicated via fax to over 300 organizations and individuals. In addition, the update is available on-line through the FSIS web page located at http://www.fsis.usda.gov. The update is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, recalls, and any other types of information that could affect or would be of interest to our constituents/stakeholders. The constituent fax list consists of industry, trade, and farm groups, consumer interest groups, allied health professionals, scientific professionals, and other individuals that have requested to be included. Through these various channels, FSIS is able to provide information to a much broader, more diverse audience. For more information and to be added to the constituent fax list, fax your request to the Congressional and Public Affairs Office, at (202) 720-5704.

The Forest Plan for the Fishlake National forest was completed in June, 1986 and will remain in effect and continue to be implemented until the Plan is revised. In the past, a “Notice of Intent to Prepare an Environmental Impact Statement” was issued at the beginning of the forest planning process. This Notice addresses initiation of revision with a focus on information needs, resource inventory reviews, organizing the revision team, and working with the public. Once the scope of the revision is better understood the Forest will issue another Notice to prepare the Environmental Impact Statement.

This Notice initiates revision under the 1982 planning regulations (36 CFR 219). The Forest Service is preparing new draft planning regulations expected to be issued in the Spring of 2002. Since these new regulations will reflect the latest national thinking on land and resource management planning, the Forest will seriously consider switching to, and completing the forest plan revision under, the new regulations when they are finalized. An additional Notice will be issued if the Forest decides to switch.

The Census Bureau sponsors the SQ-CLASS, “Business and Professional Classification Report”, to collect information needed to keep the retail, wholesale, and service samples current with the business universe. Because of rapid changes in the marketplace caused by the emergence of new businesses, the deaths of others, transfer of ownership, mergers, and so forth, on a quarterly basis the Census Bureau canvasses a sample of new Employer Identification Numbers (EINs) obtained from the Internal Revenue Service (IRS) and the Social Security Administration (SSA). Each selected firm is canvassed once for kind of business classification, measure of size, and company affiliation on the establishments associated with the new EIN. In essence, from the perspective of the business firm, this is a one time collection of data. A different sample of EINs is canvassed four times a year.

We are revising the SQ-CLASS to improve the flow of the questions as well as to provide information needed to assign kind-of-business codes based on the North American Industry Classification System (NAICS).

We collect this information by mail, fax, and telephone follow-up.

OMB Number: 0607-0189.

Form Number: SQ-CLASS.

Type of Review: Regular Submission.

Affected Public: Retail, Wholesale and Service firms in the United States.

Estimated Number of Respondents: Annually, approximately 42,000.

Estimated Time Per Response: 13 minutes.

Estimated Total Annual Burden Hours: 9,101.

Estimated Total Annual Cost: The cost to the respondent for fiscal year 2003 is estimated to be $190,302.

Respondent's Obligation: This collection of information is voluntary.

Legal Authority: Title 13, United States Code, Section 182.

Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including automated collection techniques or other forms of information technology.

Comments submitted in response to this notice will be summarized and included in the request for OMB approval of this information collection. They also will become a matter of public record.

The OAS Model Regulations and the Firearms Convention require the government of importing States to issue an Import Certificate to the importer of firearms and the government of exporting States to issue licenses for the firearms.

This rule imposes two information collection requirements. The first requirement is the import certificate as support documentation for exports destined to Convention Signatories. The second requirement is the imposition of a licensing requirement for Firearms Convention items destined to Canada, a Convention Signatory. Previously, such items were exported to Canada without a license.

Written notification and recordkeeping.

OMB Number: 0694-0114.

Form Number: BXA-748P. Although the name of the agency has changed to the Bureau of Industry and Security (BIS), we will continue to use previous forms until the stock is depleted.

Type of Review: Regular submission for extension of a currently approved collection.

Affected Public: Individuals, businesses or other for-profit and not-for-profit institutions.

Estimated Number of Respondents: 833.

Estimated Time Per Response: 5 to 90 minutes per response.

Estimated Total Annual Burden Hours: 176.

Estimated Total Annual Cost: No capital expenditures are required.

Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they will also become a matter of public record.

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department of Commerce (“Department's”) regulations are to the regulations at 19 CFR part 351 (April 2001).

Since the initiation of this investigation ( Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey and Venezuela, 66 FR 54198 (October 26, 2001) (“ Initiation Notice ”)), the following events have occurred.

On November 13, 2001, the United States International Trade Commission (“ITC”) preliminarily determined that there is a reasonable indication that imports of certain cold-rolled steel products from Argentina are materially injuring the United States industry ( see Certain Cold-Rolled Steel Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey and Venezuela, 66 FR 57985 (November 19, 2001)).

On November 29, 2001, we selected the largest producer/exporter of cold-rolled steel from Argentina as a mandatory respondent in this proceeding. (See Memorandum to Laurie Parkhill, Director Office 3, from The Team regarding Selection of Respondents dated November 29, 2001, for further details.) We issued the antidumping questionnaire to Siderar S.A.I.C. (“Siderar”) on November 29, 2001.

On December 7, 2001, the petitioners  1 alleged that there is a reasonable basis to believe or suspect critical circumstances exist with respect to the antidumping investigations of cold-rolled carbon steel flat products from Argentina, Australia, China, India, the Netherlands, Russia, South Africa, South Korea, and Taiwan. On December 14, 2001, the petitioners supplemented their December 7, 2001, submission with additional information.

During the period January through April 2002, the Department received responses to sections A, B, and C, of the Department's original and supplemental questionnaires from Siderar.

On February 7, 2002, pursuant to 19 CFR 351.205(e), the petitioners made a timely request to postpone the preliminary determination. We granted this request on February 14, 2002, and postponed the preliminary determination until no later than April 26, 2002. ( See Postponement of Preliminary Determinations of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey and Venezuela, 67 FR 8227 (February 22, 2002)).

On February 15, 2002, we received an allegation from the petitioners that Siderar sold cold-rolled products in Argentina at prices below the cost of production during the period of investigation. Based on our analysis of the allegation we determined that there are reasonable grounds to believe or suspect that Siderar had made home-market sales below its cost of production and on March 15, 2002, we initiated a sales-below-cost investigation of Siderar's home-market sales.

In accordance with 19 CFR 351.206(c)(2)(i), because the petitioners submitted the critical circumstances allegation more than twenty days before the scheduled date of the preliminary determination, the Department must issue the preliminary critical circumstances determination not later than the date of the preliminary determination. A full discussion of our analysis may be found below and in the critical circumstances memorandum from Richard W. Moreland to Faryar Shirzad, dated April 26, 2002 ( Preliminary Negative Determination of Critical Circumstances—Argentina ). A public version of this memorandum is on file at the Import Administration Central Records Unit, in Room B-099 of the Department of Commerce Building.

Pursuant to section 735(a)(2) of the Act, on April 18, 2002, Siderar requested that, in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination until not later than 135 days after the date of the publication of the preliminary determination in the Federal Register and extend the provisional measures to not more than six months. In accordance with 19 CFR 351.210(b)(2)(ii) and (e), because (1) our preliminary determination is affirmative, (2) Siderar accounts for a significant proportion of exports of the subject merchandise, and (3) no compelling reasons for denial exist, we are granting the respondent's request and are postponing the final determination until no later than 135 days after the publication of this notice in the Federal Register . Suspension of liquidation will be extended accordingly.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, please see the Scope Appendix attached to this notice.

The period of investigation (“POI”) is July 1, 2000, through June 30, 2001.

To determine whether sales of cold-rolled steel from Argentina to the United States were made at less than fair value (“LTFV”), we compared the export price (“EP”) or constructed export price (“CEP”) to the normal value (“NV”), as described in the “Export Price,” “Constructed Export Price,” and “Normal Value” sections of this notice, below. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI weighted-average EPs or CEPs to weighted-average NVs.

In accordance with section 771(16) of the Act, we considered all products produced and sold by the respondent in the home market during the POI that fit the description in the “Scope of Investigation” section of this notice to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We compared U.S. sales to sales of identical merchandise made in the home market. 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: hardening and tempering, painting, carbon level, quality, yield strength, minimum thickness, thickness tolerance, edge finish, form, leveling, annealing, and surface finish.

In accordance with section 772(a) of the Act, we calculated EP for those sales where the merchandise was sold to the first unaffiliated purchaser in the United States prior to importation or to an unaffiliated purchaser for exportation to the United States. We based EP on the packed delivered price to unaffiliated purchasers in the United States. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act; these included, where appropriate, ocean freight, marine insurance, U.S. brokerage and handling, U.S. customs duties (including harbor maintenance fees and merchandise processing fees), and U.S. inland freight expenses (freight from port to the customer).

In accordance with section 772(b) of the Act, we calculated CEP for those sales where the merchandise was sold (or agreed to be sold) in the United States, before or after the date of importation, by or for the account of the producer or exporter, or by a seller affiliated with the producer or exporter, to an unaffiliated purchaser.

We based CEP on packed FOB prices to unaffiliated purchasers in the United States. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act. These included, where appropriate, domestic inland freight (i.e., inland freight expense from plant/warehouse to port of exit), ocean freight, marine insurance, U.S. brokerage and handling, U.S. customs duties, U.S. stevedoring and wharfage charges, and U.S. inland freight expenses ( i.e., freight from port to customer). In accordance with section 772(d)(1) of the Act and 19 CFR 351.402(b), we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses ( e.g., imputed credit costs) and indirect selling expenses ( e.g., inventory carrying costs).

Pursuant to section 772(d)(3) of the Act, we reduced the starting price further by an amount for profit to arrive at the CEP. In accordance with section 772(f) of the Act, we calculated the CEP profit rate using the expenses incurred by Siderar on its sales of the subject merchandise in the United States and the foreign like product in the home market and the profit associated with those sales. See Antidumping Duty Investigation on Cold-Rolled Carbon Steel Flat Products from Argentina—Preliminary Determination Analysis Memorandum for Siderar S.A.I.C. (“Siderar”) from J. David Dirstine to File, dated April 26, 2002 (“Preliminary Analysis Memorandum”).

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)(B) of the Act. Because the respondent's aggregate volume of home-market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market is viable for the respondent.

Based on our analysis of a sales-below-cost allegation submitted by the petitioners on February 15, 2002, we found that there were reasonable grounds to believe or suspect that sales of cold-rolled steel in the home market were made at prices below their cost of production (COP) in accordance with section 773(b)(2)(A)(i) of the Act. Accordingly, pursuant to section 773(b) of the Act, we initiated an investigation of sales-below-cost for Siderar to determine whether sales were made at prices below their respective COP ( see letter to Siderar from Laurie Parkhill, Office Director, AD/CVD Enforcement, dated March 15, 2002).

In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the cost of materials and fabrication for the foreign like product, plus an amount for general and administrative expenses (“G&A”) and interest expenses ( see “Test of Home-Market Sales Prices” section below for treatment of home-market selling expenses). We relied on the COP data submitted by Siderar except as noted below.

A. We adjusted the reported transfer price for certain raw material inputs purchased from an affiliated company to reflect the market price for such inputs which, in turn, increased the total cost of manufacturing of each model.

B. We have adjusted the total cost of manufacture upward to reflect the difference between product-specific and product grouping or product “family” costs at the two plants where Siderar produced the subject merchandise. Siderar did not provide product-specific costs for the products produced at one of its plants, as we had requested, and we found that, for products where we had both product-specific and product-“family” costs, the “family'-specific costs were understated in comparison to the product-specific costs.

C. We revised Siderar's G&A rate calculation to include other ordinary income, certain expense amounts, and termination of employee costs.

D. We recalculated Siderar's financial-expense ratio. We divided the net interest expense reported on the financial statements (financial and holding results generated by liabilities less those generated by assets) by the cost of sales.

See Memorandum from Laurens van Houten to Neal Halper, Director, Office of Accounting, dated April 26, 2002, Re: Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Determination (“Cost Calculation Memorandum”).

On a product-specific basis, we compared the adjusted weighted-average COP to the home-market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether the sale prices were below the COP. The prices were exclusive of any applicable billing adjustments, movement charges, rebates, discounts, direct and indirect selling expenses, and packing expenses. In determining whether to disregard home-market sales made at prices less than their COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of the respondent's sales of a given product during the POI are at prices less than the COP, we do not disregard any below-cost sales of that product because we determine that in such instances 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 are at prices less than the COP, we determine that the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act.

We found that, for certain specific products, more than 20 percent of Siderar's home-market sales were at prices less than the COP and, in addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales, if any, as the basis for determining NV, in accordance with section 773(b)(1) of the Act. For those U.S. sales of subject merchandise for which there were no comparable home-market sales in the ordinary course of trade ( e.g., at above-cost prices), we compared those sales to constructed value (“CV”), in accordance with section 773(a)(4) of the Act.

Section 773(a)(4) of the Act provides that where NV cannot be based on comparison market sales, NV may be based on CV. Accordingly, for Siderar, when sales of comparison products could not be found, either because there were no sales of a comparable product or all sales of the comparable products failed the COP test, we based NV on CV.

In accordance with section 773(e)(1) and (e)(2)(A) of the Act, we calculated CV based on the sum of the cost of materials and fabrication for the subject merchandise, plus amounts for selling expenses, G&A, interest, profit, and U.S. packing costs. We calculated the cost of materials and fabrication based on the methodology described in the “Calculation of COP” section of this notice. In accordance with section 773(e)(2)(A) of the Act, we based selling expenses, G&A, and profit on the amounts incurred and realized by the company in connection with the production and sale of the foreign like product in the ordinary course of trade for consumption in the foreign market.

Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same level of trade (“LOT”) as the EP or CEP. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. Id.; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 (November 19, 1997). In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market ( i.e., the “chain of distribution”), 2 including selling functions, 3 class of customer (“customer category”), and the level of selling expenses for each type of sale.

Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs for EP and comparison-market sales (i.e., NV based on either home-market or third-country prices), we consider the starting prices before any adjustments. For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. March 7, 2001).

When the Department is unable to find sales of the foreign like product in the comparison market at the same LOT as the EP or CEP, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP or CEP sales at a different LOT in the comparison market, where available data make it practicable, we make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales only, if a NV level of trade is more remote from the factory than the CEP level of trade and there is no basis for determining whether the difference in LOTs between NV and CEP affected price comparability ( i.e., no LOT adjustment was practicable), the Department shall grant a CEP offset, as provided in section 773(a)(7)(B) of the Act. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).

We obtained information from Siderar regarding the marketing stages involved in making the reported home-market and U.S. sales, including a description of the selling activities performed by the respondent for each channel of distribution. Siderar's LOT findings are summarized below.

Siderar reported two channels of distribution in the home market—steel service centers ( i.e., distributors) and end-users. The selling activities associated with all sales were similar ( e.g., freight and delivery arrangements, inventory maintenance, market research, sales forecasting and after-sales service) and, based on our analysis of the selling activities, we considered the two channels of distribution to constitute one LOT.

In the U.S. market, Siderar reported two channels of distribution ( i.e., CEP sales to its U.S. affiliate, Siderca Corporation, who sells “back-to-back” to unaffiliated U.S. customers and maintains no inventory), and EP sales to unaffiliated customers in the United States. After making deductions pursuant to section 772(d) of the Act, we found that Siderar performed basically the same sales functions for both channels of distribution in the U.S. market ( e.g., inventory maintenance, sales forecasting and after-sales service, market research, and freight and delivery arrangements) and we considered both of these channels to be the same LOT.

Because the selling activities associated with the home-market LOT were not substantially different from than those associated with the U.S. LOT, we considered the home-market LOT to be the same as the U.S. LOT. Therefore, no LOT adjustment was necessary and we made no CEP-offset adjustment to NV.

We calculated NV based on delivered prices to unaffiliated customers. We made deductions, where appropriate, from the starting price for rebates. We also made deductions for movement expenses ( i.e., inland freight expense from plant/warehouse to customer) under section 773(a)(6)(B)(ii) of the Act. In addition, we made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in circumstances of sale for imputed credit expenses and we adjusted for differences in merchandise where we were unable to match identical products. We also deducted home-market packing costs and added U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of the Act. Finally, in accordance with section 773(a)(6)(B)(iii) of the Act, we made a reduction to NV for the amount of the indirect tax (“reintegro”) not collected on exports of subject merchandise to the United States.

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.

As provided in section 782(i) of the Act, we will verify all information relied upon in making our final determination.

Section 733(e)(1) of the Act provides that the Department will preliminarily determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A)(i) there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise; or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales; and (B) there have been massive imports of the subject merchandise over a relatively short period.

Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine the following information: (i) the volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, section 351.206(h)(2) of the Department's regulations provides that, “In general, unless the imports during the “relatively short period” have increased by at least 15 percent over the imports during an immediately preceding period of comparable duration, the Secretary will not consider the imports massive.”

Section 351.206(i) of the Department's regulations defines “relatively short period” as generally the period beginning on the date the proceeding begins ( i.e., the date the petition is filed) and ending at least three months later. This section provides further that, if the Department “finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely,” then the Department may consider a period of not less than three months from that earlier time.

In determining whether the above statutory criteria have been satisfied, we examined the following information: (1) The evidence presented in the petitioners' submissions of December 7, 2001, and January 14, 2002; (2) new evidence obtained since the initiation of the less-than-fair-value (“LTFV”) investigations ( i.e., additional import statistics released by the Census Bureau); and (3) the ITC's affirmative preliminary injury determination ( see Certain Cold-Rolled Steel Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, International Trade Commission Investigations Nos. 701-TA-422-425 and 731-TA-964-983 Preliminary Determination, 66 FR 57985 (November 19, 2001)).

In determining whether a history of dumping and material injury exists, the Department generally considers current or recent antidumping duty orders on the subject merchandise from the country in question in the United States and current orders in any other country. See Carbon and Alloy Steel Wire Rod From Germany, Mexico, Moldova, Trinidad and Tobago, and Ukraine: Notice of Preliminary Determination of Critical Circumstances, 67 FR 6224 (February 11, 2002) ( Carbon and Alloy Steel Wire Rod ). Because we are not aware of any existing antidumping order in any country on cold-rolled carbon steel flat products from Argentina, we do not find a history of dumping from Argentina, pursuant to section 733(e)(1)(A)(i) of the Act. However, the Department may look to the second criterion for determining whether importers knew or should have known that exporters were selling subject merchandise from Argentina at LTFV prices.

In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known the exporter was selling cold-rolled steel at less than fair value, the Department normally considers margins of 25 percent or more for export price (EP) sales and 15 percent or more for CEP sales sufficient to impute importer knowledge of sales at LTFV. See Carbon and Alloy Steel Wire Rod, 67 FR 6224, 6225.

The Department normally bases its decision with respect to knowledge on the margins determined in the preliminary determination. Therefore, for purposes of this preliminary determination of critical circumstances, we are relying on the margin calculated for Siderar for this preliminary determination. Because this margin is greater than 25 percent (see “Suspension of Liquidation” section below) in the case of Argentina, which has both EP and CEP sales, we find that there is a reasonable basis to impute knowledge of dumping with respect to imports from Argentina.

In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that there was likely to be material injury by reason of dumped imports, the Department normally will look to the preliminary injury determination of the ITC. If the ITC finds a reasonable indication of present material injury to the relevant U.S. industry, the Department will determine that a reasonable basis exists to impute importer knowledge that material injury is likely by reason of dumped imports. See Final Determination of Sales at Less Than Fair Value: Certain Cut-To-Length Carbon Steel Plate from the People's Republic of China, 62 FR 61964 (November 20, 1997). In this case, the ITC preliminarily found that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of subject merchandise from South Africa. See Determinations and Views of the Commission, Investigations Nos. 701-TA-422-425 and 731-TA-964-983, Publication 3471 (November 2001) ( ITC Determination ). Due to the ITC's finding of material injury, we preliminarily determine that there is a reasonable basis to believe or suspect that importers knew or should have known that imports of cold-rolled steel from Argentina were likely to cause material injury.

In determining whether there are “massive imports” over a “relatively short period,” pursuant to section 733(e)(1)(B) of the Act, the Department normally compares the import volumes of the subject merchandise for at least three months immediately preceding the filing of the petition (i.e., the “base period”) to a comparable period of at least three months following the filing of the petition (i.e., the “comparison period”). However, as stated in 19 CFR 351.206(i), “if the Secretary finds importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, then the Secretary may consider a time period of not less than three months from that earlier time.” Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period. We used company-specific shipment data and determined that there were no massive imports. We also found no massive imports for companies in the all other category. For a detailed analysis, see the memorandum from Richard Moreland to Faryar Shirzad, dated April 26, 2002 ( Preliminary Negative Determination of Critical Circumstances—Argentina ).

In accordance with section 733(d)(2) 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:

In accordance with section 733(f) of the Act, we have notified the ITC of our determination. If our final determination is affirmative, pursuant to 735(b)(2) 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.

We will disclose the calculations used in our analysis to parties in this proceeding in accordance with 19 CFR 351.224(b).

Case briefs for this investigation must be submitted to the Department no later than seven days after the date of the final verification report issued in this proceeding. Rebuttal briefs must be filed five days from the deadline date for case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Section 774 of the Act provides that the Department will hold a public hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by an interested party. If a request for a hearing is made in this investigation, the hearing will tentatively be held three days after the rebuttal brief deadline date at the U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 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.

We will make our final determination by no later than 135 days after the publication of this notice in the Federal Register .

This determination is published pursuant to sections 733(f) and 777(i) of the Act.

This investigation was initiated on October 18, 2001. 1 See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 2001) ( Initiation Notice ). Since the initiation of the investigation, the following events have occurred.

On October 31, 2001, we solicited comments from interested parties regarding the criteria to be used for model-matching purposes, and we received comments on our proposed matching criteria on November 8, 2001. On November 8, 2001, we received model match comments from petitioners and respondents. On November 26, 2001, we informed respondents of our revised model match criteria.

On November 13, 2001, the United States International Trade Commission (“ITC”) preliminarily determined that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports from Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela of cold-rolled steel products. See Certain Cold-Rolled Steel Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 57985 (November 19, 2001).

On November 16, 2001, the Department issued an antidumping questionnaire to Sidmar, N.V. 2 The petitioners made an allegation of sales below cost of production (“COP”) in the petition. Based on the factual information contained in the petition, we found “reasonable grounds to believe or suspect” that sales below cost occurred. See Initiation Notice 66 FR at 54212-13. Accordingly, the Department initiated the requested country-wide cost investigation.

On November 29, 2001, we confirmed our selection of Sidmar, the largest producer/exporter of cold-rolled steel from Belgium, as the sole mandatory respondent in this proceeding. See Memorandum from Mark Young to Melissa Skinner, “Antidumping Duty Investigation of Cold-Rolled Carbon Steel Flat Products from Belgium—Selection of Respondents,” dated November 29, 2001, on file in the Central Records Unit, room B-099, of the Department's main building (the “CRU”).

During the period December 2001 through January 2002, the Department received questionnaire responses from Sidmar and its affiliated U.S. importer, TradeARBED, Inc. (“TANY”) (collectively “Sidmar”). The Department issued supplemental questionnaires on February 20 and 28, 2002, and the responses were received on March 20 and 29, 2002.

On January 23, 2002, Sidmar requested that the Department permit it to exclude sales of full-hard coils which were further annealed and skinpassed by its affiliated mill, Laminoir de Dudelange (“LDD”), and then imported by its affiliated U.S. processor, J&F Steel Corp. (“J&F”). Petitioners Bethlehem Steel Corporation, National Steel Corp., Nucor Corp., and United States Steel Corporation submitted their comments to oppose the exclusion of sales on February 1, 2002. Petitioners provided additional pre-preliminary comments on April 5, 2002. For further discussion, see the Calculation Memorandum from Lyman Armstrong to the File for the Preliminary Determination of Certain Cold-Rolled Carbon Steel Flat Products from Belgium, dated April 26, 2002 (“Sales Calculation Memorandum”).

On February 7, 2002, pursuant to 19 CFR 351.205(e), the petitioners made a timely request to postpone the preliminary determination. We granted this request on February 22, 2002, and postponed the preliminary determination until no later than April 26, 2002. ( See Postponement of Preliminary Determinations of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products from Argentina (A-357-816), Australia (A-602-804), Belgium (A-423-811), Brazil (A-351-834), the People's Republic of China (A-570-872), France (A-427-822), Germany (A-428-834), India (A-533-826), Japan (A-588-859), Korea (A-580-848), the Netherlands (A-421-810), New Zealand (A-614-803), Russia (A-821-815), South Africa (A-791-814), Spain (A-469-812), Sweden (A-401-807), Taiwan (A-583-839), Thailand (A-549-819), Turkey (A-489-810) and Venezuela (A-307-822), 66 FR at 8227 (February 22, 2002)).

On April 16, 2002, the Department issued supplemental Sections D and E questionnaires. The responses were received on April 22, 2002.

Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise. Section 351.210(e)(2) of the Department's regulations requires that exporters requesting postponement of the final determination must also request an extension of the provisional measures referred to in section 733(d) of the Act from a four-month period until not more than six months. We received a request to postpone the final determination from the respondent, Sidmar, on April 25, 2002. In its request, Sidmar consented to the extension of provisional measures to no longer than six months.

Since this preliminary determination is affirmative, the request for postponement is made by an exporter than accounts for a significant proportion of exports of the subject merchandise, and there is no compelling reason to deny the respondent's request, we have extended the deadline for issuance of the final determination until the 135th day after the date of publication of this preliminary determination in the Federal Register and have extended provisional measures to no longer than six months.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, as well as a complete discussion of all scope exclusion requests submitted in the context of the on-going cold-rolled steel investigations, please see the “Scope Appendix” attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina , published concurrently with this preliminary determination.

The period of investigation (“POI”) is July 1, 2000, through June 30, 2001.

To determine whether sales of cold-rolled steel from Belgium to the United States were made at LTFV, 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 compared POI weighted-average CEPs to weighted-average NVs.

In accordance with section 771(16) of the Act, we considered all products produced and sold by the respondent in the home market during the POI that fit the description in the “Scope of Investigation” section of this notice 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: hardening and tempering; painted; carbon level; quality; yield strength; minimum thickness; thickness tolerance; width; edge finish; form; temper rolling; leveling; annealing; and surface finish.

For the price to the United States, we used CEP in accordance with section 772(b) of the Act because all sales to the first unaffiliated purchaser took place in the United States. Specifically, all of Sidmar's sales to the United States during the POI were made by its U.S. affiliates, TANY and J&F. Furthermore, some of Sidmar's CEP sales were further manufactured by J&F in the United States. 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. To calculate further manufacturing costs, we used the information in Sidmar's Sections C and E responses, except in the following instances where the data were not properly quantified or valued: (1) we increased the reported further manufacturing costs to include freight from the port to the processor when determining profit and cost to be deducted from CEP. See Memorandum from Peter Scholl to Neal Halper, Director, Office of Accounting, dated April 26, 2002, “Cost of Production and Constructed Value (CV) Calculation Adjustments for the Preliminary Determination” (“Cost Calculation Memorandum”).

We based CEP on the packed CIF or delivered prices to the first unaffiliated customer in the United States. Where appropriate, we reduced these prices to reflect discounts and rebates, and made billing adjustments.

In accordance with section 772(c)(2) of the Act, we made deductions, where appropriate, for movement expenses including foreign inland freight, foreign brokerage and handling, ocean freight, marine insurance, U.S. brokerage and handling, U.S. customs duties (including harbor maintenance fees and merchandise processing fees), and U.S. inland freight expenses (freight from warehouse to the customer and freight from port to warehouse).

In accordance with section 772(d)(1) of the Act, we deducted from the starting price those selling expenses that were incurred in selling the subject merchandise in the United States, including direct selling expenses (cost of credit, warranties, and commissions paid to unaffiliated sales agents). In addition, we deducted indirect selling expenses that related to economic activity in the United States such as inventory carrying costs and other indirect selling expenses, incurred by affiliated U.S. distributors. We also deducted from CEP an amount for profit in accordance with sections 772(d)(3) and (f) of the Act. For further discussion, see the Sales Calculation Memorandum .

We have excluded Sidmar sales of full-hard coils which were further annealed and skinpassed by its affiliated mill, LDD, in Luxembourg and then imported by its affiliated U.S. processor, J&F. Sidmar stated that it and J&F were unable to determine the appropriate product matching characteristics for sales of material processed by LDD because LDD does not have the same order management system used by Sidmar. With the plant order number, Sidmar determined the appropriate product matching characteristics for the imported coil based on mill production records. Because LDD does not have the same order management system, it is unable to link its production records to J&F invoices. Moreover, LDD does not have a reliable method for linking its own sales of further manufactured products to specific coils purchased from SIDMAR. Therefore, because these sales accounted for such a small portion of U.S. sales we excused Sidmar from reporting them. For further discussion, see the Sales Calculation Memorandum .

For those U.S. sales for which Sidmar did not report a date of payment, we have used the signature date of the preliminary determination ( i.e. , April 26, 2002) in the calculation of imputed credit expenses. In addition, for the sales for which Sidmar did not report a date of shipment, we have used the invoice date for purposes of calculating credit expenses. For further discussion, see the Sales Calculation Memorandum .

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)(B) of the Act. Because the respondent's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market was viable for the respondent.

Sales to affiliated customers for consumption in the home market which were determined not to be at arm's length were excluded from our analysis. To test whether these sales were made at arm's length, we compared the prices of sales of comparison products to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, discounts, and packing. Pursuant to 19 CFR 351.403(c) and in accordance with our practice, where the prices to the affiliated party were on average less than 99.5 percent of the prices to unaffiliated parties, we determined that the sales made to the affiliated party were not at arm's length. See e.g., Notice of Final Results and Partial Rescission of Antidumping Duty Administrative Review: Roller Chain, Other Than Bicycle, From Japan , 62 FR at 60472, 60478 (November 10, 1997), and Antidumping Duties; Countervailing Duties: Final Rule (“Antidumping Duties”), 62 FR at 27295, 27355-56 (May 19, 1997). We included in our NV calculations those sales to affiliated customers that passed the arm's length test in our analysis. See 19 CFR 351.403; Antidumping Duties , 62 FR at 27355-56.

Based on our analysis of an allegation contained in the petition, we found that there were reasonable grounds to believe or suspect that sales of cold-rolled steel in the home market were made at prices below their COP. Accordingly, pursuant to section 773(b) of the Act, we initiated a country-wide sales-below-cost investigation to determine whether sales were made at prices below their respective COPs ( see Initiation Notice, 66 FR at 54198).

In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the cost of materials and fabrication for the foreign like product, plus an amount for general and administrative expenses (“G&A”), including interest expenses, and home market packing costs ( see “Test of Home Market Sales Prices” section below for treatment of home market selling expenses). We relied on the COP information submitted by Sidmar with the exception of certain production inputs which were obtained from affiliated parties at less than market value. For these inputs, we adjusted the reported cost to reflect market value. See the Cost Calculation Memorandum .

On a product-specific basis, we compared the adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether the sale prices were below the COP. The prices were exclusive of any applicable movement charges, rebates, discounts, and direct and indirect selling expenses. In determining whether to disregard home market sales made at prices less than their COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time.

Pursuant to section 773(b)(2)(C), where less than 20 percent of the respondent's sales of a given product are at prices less than the COP, we do not disregard any below-cost sales of that product, because we determine that in such instances 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 are at prices less than the COP, we determine that in such instances the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act.

We found that, for certain specific products, more than 20 percent of Sidmar's home market sales were at prices less than the COP and, in addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales, if any, as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

We calculated NV based on delivered prices to unaffiliated customers or prices to affiliated customers that we determined to be at arm's length. We made deductions, where appropriate, from the starting price for early payment discounts, billing adjustments, and rebates. We also made deductions for movement expenses, including inland freight (plant to distribution warehouse, plant/warehouse to customer, and affiliated reseller to customer), inland insurance, and warehousing under section 773(a)(6)(B)(ii) of the Act. 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. See the Sales Calculation Memorandum .

Furthermore, we made adjustments for differences in costs attributable to differences in the physical characteristics of the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We also deducted home market packing costs and added U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of the Act. Finally, for comparisons to CEP sales, we made a CEP offset pursuant to section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). See Level of Trade section below. We calculated the CEP offset as the lesser of the indirect selling expenses on the comparison-market sales or the indirect selling expenses deducted from the starting price in calculating CEP. See the Sales Calculation Memorandum .

We have excluded Sidmar's sales of non-prime merchandise in the home market for which Sidmar was unable to identify their product characteristics. These sales represented a small portion of Sidmar's home market sales. For further discussion, see the Sales Calculation Memorandum .

Section 773(a)(4) of the Act provides that where NV cannot be based on comparison market sales, NV may be based on CV. Accordingly, for those models of cold-rolled steel products for which we could not determine the NV based on comparison market sales, either because there were no sales of a comparable product or all sales of the comparable product failed the COP test, we based NV on CV. Section 773(e)(1) of the Act provides that the CV shall be based on the sum of the cost of material and fabrication for the imported merchandise, plus amounts for selling, general and administrative (“SG&A”) expenses, profit and U.S. packing costs. We calculated the cost of material and fabrication based on the methodology described in calculation of Cost of Production section, above. In accordance with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit on the amounts incurred by Sidmar in connection with the production and sale of the foreign like product in the comparison market. We used U.S. packing costs as described in the Constructed Export Price section above.

For price-to-CV comparisons, we made adjustments to CV in accordance with section 773(a)(8) of the Act and 19 CFR 351.410. Where we compared CV to CEP, we deducted from CV the weighted-average home market direct selling expenses and added U.S. selling expenses. Where appropriate we applied the CEP offset for price-to-CV comparisons, see the Level of Trade section below.

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 CEP transaction. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on CV, that of the sales from which we derive SG&A expenses and profit. 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 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 at 61731 (November 19, 1997).

Sidmar reported two customer categories ( i.e. , distributors and original equipment manufacturers) and five channels of distribution in the home market: (1) Sales made by Sidmar, through its affiliated sales agent Sidstahl Belgium, N.V. (“Sidstahl”), directly to unaffiliated distributors or end users (Channel 1); (2) sales made by Sidmar's affiliated producer Europese Staal Prefabricate, N.V. (“ESP”) directly to its affiliated and unaffiliated distributors and unaffiliated end-users (Channel 2); (3) sales made by Sidmar, through its affiliated sales agent Sidstahl, as consignment sales, to unaffiliated end-users (Channel 3); (4) sales made by Sidmar to unaffiliated and affiliated end-users (Channel 4); (5) and sales made by Sidmar's affiliated producer ESP, as consignment sales, to unaffiliated end-users (Channel 5).

We determined that Sidmar sold merchandise at one LOT in the home market during the POI. The Department found minimal distinctions in the selling activities and associated expenses between Channels 1 through 5. Based on these differences, we concluded that one LOT existed in the home market. 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, please see the Sales Calculation Memorandum for a detailed explanation of this issue.

Sidmar reported two customer categories ( i.e., original equipment manufacturers and service centers/distributors) and two channels of distribution in the United States: (1) CEP sales made by Sidmar, through its affiliated U.S. importer TANY, to unaffiliated service centers (Channel 6), and (2) CEP sales made by Sidmar, through its affiliated U.S. importer and further processor, J&F, to unaffiliated end users (Channel 7). We examined the selling functions performed by Sidmar on behalf of J&F and TANY and found only one level of trade.

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 Sidmar's CEP sales than for sales in the home market and these differences are substantial. We therefore determined that Sidmar's CEP sales and home market sales were made at different marketing stages and thus at different LOTs. Accordingly, 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 section 773(a)(1) of the Act; 19 CFR 351.412(b). However, where the available data does 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 the home market LOT and there is no home market LOT comparable to that of the CEP sales, 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 to the 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 Sales Calculation Memorandum for a detailed explanation of our analysis.

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.

As provided in section 782(i) of the Act, we will verify all information relied upon in making our final determination.

In accordance with section 733(d)(2) of the Act, we are directing the U.S. 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 export price or constructed export price, as indicated in the chart below. These suspension-of-liquidation instructions will remain in effect until further notice. The weighted-average dumping margin is as follows:

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.

We will disclose the calculations used in our analysis to parties in this proceeding in accordance with 19 CFR 351.224(b).

Case briefs for this investigation must be submitted to the Department no later than seven days after the date of the final verification report issued in this proceeding. Rebuttal briefs must be filed five days from the deadline date for case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Public versions of all comments and rebuttals should be provided to the Department and made available on diskette. Section 774 of the Act provides that the Department will hold a public hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by an interested party. If a request for a hearing is made in this investigation, the hearing will tentatively be held two days after the rebuttal brief deadline date 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.

We will make our final determination no later than 135 days after the publication of this notice in the Federal Register .

This determination is issued and published pursuant to sections 733(f) and 777(i) of the Act.

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department of Commerce (Department's) regulations are to 19 CFR part 351 (April 2001).

We preliminarily determine that certain cold-rolled carbon steel flat products (cold-rolled steel) from Brazil are being sold, or are likely to be sold, in the United States at less than fair value (LTFV), as provided in section 733 of the Act. The estimated margin of sales at LTFV is shown in the Suspension of Liquidation section of this notice.

This investigation was initiated on October 18, 2001. 1 See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (Oct. 26, 2001) ( Initiation Notice ). The following events have occurred since the initiation.

On November 13, 2001, the United States International Trade Commission (ITC) preliminarily determined that there is a reasonable indication that imports of certain cold-rolled carbon steel flat products from Brazil are materially injuring the United States industry ( see ITC Investigation Nos. 701-TA-422-425 and 731-TA-964-983 (Publication No. 3471)).

On November 16, 2001, we selected Usinas Siderurgicas de Minas Gerais (USIMINAS) and Companhia Siderurgica Paulista (COSIPA) (collectively “USIMINAS/COSIPA”) as the mandatory respondents in this proceeding. 2 For further discussion, see the November 16, 2001, memorandum from the Team to Louis Apple entitled, “Antidumping Duty Investigation of Cold-Rolled Carbon Steel Flat Products from Brazil—Selection of Respondents” (the respondent selection memorandum). We subsequently issued antidumping questionnaires to USIMINAS/COSIPA on November 16, 2001. We issued a corrected version of the questionnaire appendix V with revised product characteristic variables on November 26, 2001.

During the period December 2001 through April 2002, we received responses from USIMINAS/COSIPA to the Department's original and supplemental questionnaires. 3

On February 7, 2002, pursuant to 19 CFR 351.205(e), the petitioners made a timely request to postpone the preliminary determination. We granted this request on February 22, 2002, and postponed the preliminary determination until no later than April 26, 2002. See Postponement of Preliminary Determinations of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products from Argentina (A-357-816), Australia (A-602-804), Belgium (A-423-811), Brazil (A-351-834), the People's Republic of China (A-570-872), France (A-427-822), Germany (A-428-834), India (A-533-826), Japan (A-588-859), Korea (A-580-848), the Netherlands (A-421-810), New Zealand (A-614-803), Russia (A-821-815), South Africa (A-791-814), Spain (A-469-812), Sweden (A-401-807), Taiwan (A-583-839), Thailand (A-549-819), Turkey (A-489-810) and Venezuela (A-307-822), 67 FR 8227 (Feb. 22, 2002).

Pursuant to section 735(a)(2) of the Act, on April 5, 2002, the respondent requested that, in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination until not later than 135 days after the date of the publication of the preliminary determination in the Federal Register . In a request on April 19, 2002, the respondent consented to the extension of provisional measures to no longer than six months. In accordance with 19 CFR 351.210(b), because our preliminary determination is affirmative, because no compelling reasons for denial exist, and because the exporter accounts for a significant proportion of exports of subject merchandise, we are granting the respondent's request and are postponing the final determination until no later than 135 days after the publication of this notice in the Federal Register . Furthermore, any provisional measures imposed by this investigation have been extended from a four-month period to not more than six months.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, as well as a complete discussion of all scope exclusion requests submitted in the context of the on-going cold-rolled steel investigations, please see the “Scope Appendix” attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, published concurrently with this preliminary determination.

The period of investigation (POI) is July 1, 2000, through June 30, 2001. This period corresponds to the four most recent fiscal quarters prior to the month of the filing of the petition ( i.e., September 2001).

To determine whether sales of certain cold-rolled carbon steel flat products from Brazil to the United States were made at LTFV, we compared the export price (EP) to the normal value (NV), as described in the “Export Price” and “Normal Value” sections of this notice, below. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI weighted-average EPs to POI weighted-average NVs.

In accordance with section 771(16) of the Act, we considered all products produced and sold by USIMINAS/COSIPA in the home market during the POI that fit the description in the “Scope of Investigation” section of this notice 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 respondent in the following order of importance: hardening and tempering, painted, carbon level, quality, yield strength, minimum thickness, thickness tolerance, width, edge finish, form, temper rolling, leveling, annealing, and surface finish.

In certain instances, however, USIMINAS/COSIPA did not provide sufficient information to calculate a margin for the reported U.S. products. Specifically, USIMINAS/COSIPA did not report cost data for certain home market products, and it reported incomplete cost data for other products. 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 of the Act; (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) of the Act, the administering authority shall, subject to section 782(d) of the Act, use the facts otherwise available in reaching the applicable determination under this title. 4 Section 776(b) of the Act further 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.

In this case, we find that USIMINAS/COSIPA withheld cost data requested by the Department for certain products and failed to provide complete and usable cost data for others. Because: (1) We informed USIMINAS/COSIPA of the deficiencies in its data and provided it an opportunity to remedy them in a supplemental questionnaire (pursuant to section 782(d) of the Act); and (2) USIMINAS/COSIPA did not provide the information requested or provided information that was so incomplete that it could not be used (within the meaning of section 782(e) of the Act), we are resorting to facts otherwise available pursuant to section 776(a)(2)(A) of the Act. Further, the cost data that USIMINAS/COSIPA did not provide for these products was provided for numerous other products. USIMINAS/COSIPA did not indicate or explain why it was not possible to provide this information for the products in question. Therefore, we conclude that USIMINAS/COSIPA could have provided the necessary data but chose not to, thereby failing to cooperate to the best of its ability within the meaning of section 776(b) of the Act. Accordingly, we have based the margin for U.S. products which match to the products in question on adverse facts available. As adverse facts available, we have assigned the highest non-aberrational margin calculated for any other U.S. product, in accordance with our practice. See, e.g., Static Random Access Memory Semiconductors From Taiwan; Final Results of Antidumping Duty New Shipper Review, 65 FR 12214 (Mar. 8, 2000) and accompanying decision memorandum at Comment 1; Final Determination of Sales at Less than Fair Value: Stainless Steel Sheet and Strip in Coils from Germany, 64 FR 30710, 30732 (June 8, 1999); Notice of Final Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 FR 24329, 24361-24362 (May 6, 1999); Notice of Final Determination of Sales at Less Than Far Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61747 (Nov. 19, 1997); and Final Determination of Sales at Less Than Fair Value: Certain Helical Spring Lock Washers from the People's Republic of China, 58 FR 48833, 48839 (Sept. 20, 1993). In selecting a facts available margin, we sought a margin that is sufficiently adverse so as to effectuate the purposes of the adverse facts available rule, which is to induce respondents to provide the Department with complete and accurate information in a timely manner. We also sought a margin that is indicative of USIMINAS/COSIPA's customary selling practices and is rationally related to the transactions to which the adverse facts available are being applied. To that end, we selected the highest margin for an individual product in a commercial quality that fell within the mainstream of USIMINAS/COSIPA's transactions (i.e., transactions that reflect sales of products that are representative of the broader range of models used to determine normal value).

For further discussion, see the memorandum entitled “Concurrence Memorandum for the Preliminary Determination in the Investigation of Certain Cold-Rolled Carbon Steel Flat Products from Brazil,” dated April 26, 2002 (the concurrence memorandum).

In the last cold-rolled investigation for Brazil, the Department treated USIMINAS and COSIPA as affiliated parties and collapsed these entities. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, 65 FR 5554, 5562 (Feb. 4, 2000). In the respondent selection memorandum, the Department stated that it intended to treat these companies as affiliated producers. Neither USIMINAS nor COSIPA commented on our intention to treat them as affiliated producers. Therefore, we have continued to treat USIMINAS and COSIPA as a single entity and to calculate a single margin for them.

In accordance with section 772(a) of the Act, we based our calculations on EP because the subject merchandise was sold by the producer or exporter directly to the first unaffiliated purchaser in the United States prior to importation. In cases where the date of shipment preceded the date of invoice reported by USIMINAS/COSIPA, we used the date of shipment as the date of sale because the terms of sale were established on that date.

We based EP on the packed delivered prices to unaffiliated purchasers in the United States. We increased U.S. price by the amount of the export subsidy found in the companion countervailing duty investigation on certain cold-rolled carbon steel flat products from Brazil. See Notice of Preliminary Affirmative Countervailing Duty Determination and Alignment with Final Antidumping Duty Determinations: Certain Cold-Rolled Carbon Steel Flat Products from Brazil, 67 FR 9652 (Mar. 4, 2002). Where appropriate, we made adjustments for discounts. 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, and U.S. customs duties.

For those movement expenses provided by affiliated parties, we assigned the highest amount reported for each mill because USIMINAS/COSIPA did not demonstrate that these expenses were incurred at arm's length, despite a request that it do so. In addition, for USIMINAS, we used the highest international freight amounts reported for each vessel because USIMINAS indicated in its supplemental response that these expenses do not vary by vessel. See the April 26, 2002, memorandum from Irina Itkin to the file entitled “Calculations Performed for Usinas Siderurgicas de Minas Gerais (USIMINAS) and Companhia Siderurgica Paulista (COSIPA) in the Preliminary Determination of the Antidumping Duty Investigation on Certain Cold-Rolled Carbon Steel Flat Products from Brazil” (the sales calculation memorandum).

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 the respondent's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market was viable for the respondent.

Based on the cost allegation submitted by the petitioners on January 22, 2002, the Department found reasonable grounds to believe or suspect that the respondent had made sales in the home market at prices below their cost of production (COP), in accordance with section 773(b)(2)(A)(i) of the Act. As a result, on February 12, 2002, the Department initiated an investigation to determine whether the respondent made home market sales during the POI at prices below their respective COPs within the meaning of section 773(b) of the Act. See Memorandum from LaVonne Jackson to Neal Halper, Director, Office of Accounting, entitled “Petitioners’ Allegation of Sales Below the Cost of Production for Usinas Siderurgicas de Minas Gerais, SA (“USIMINAS”) and Companhia Siderurgica Paulista (“COSIPA”),” dated February 12, 2002.

In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the cost of materials and fabrication for the foreign like product, plus an amount for general and administrative expenses (G&A), including interest expenses (see the “Test of Home Market Sales Prices” section below for the treatment of home market selling expenses). We relied on the COP data submitted by USIMINAS/COSIPA except as noted below.

1. As discussed above, we applied adverse facts available to USIMINAS's reported costs because USIMINAS disregarded the Department's instructions to report its costs based on the POI. As adverse facts available, we increased the cost of manufacture (COM) of all products produced by USIMINAS. We based this increase on the highest percentage difference between USIMINAS's product-specific COMs and COSIPA's product-specific COMs (where COSIPA's COM exceeded USIMINAS's and where the products were produced by both USIMINAS and COSIPA).

2. We adjusted USMINAS/COSIPA's reported COP to exclude PIS and COFINS taxes. See the “Calculation of Normal Value Based on Comparison Market Prices” section of this notice, below, for further discussion.

3. We adjusted USMINAS/COSIPA's GNA expense ratio to include goodwill amortization expenses, as well as the depreciation expenses of an idled asset.

4. We adjusted USIMINAS and COSIPA's reported financial expense ratio to exclude the portion of the reported financial income offset related to long-term interest bearing assets. We based the excluded amount on the ratio of long-term interest bearing assets to total interest bearing assets.

See the April 26, 2002, memorandum from LaVonne Jackson to Neal Halper entitled “Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results” referencing the Antidumping Duty Investigation of Certain Cold-Rolled Carbon-Quality Steel Products from Brazil (the cost calculation memorandum) for further discussion.

On a product-specific basis, we compared the adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether the sale prices were below the COP. The prices were exclusive of any applicable movement charges, rebates, discounts, selling expenses, and packing expenses. In determining whether to disregard home market sales made at prices less than their COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time.

Pursuant to section 773(b)(2)(C), where less than 20 percent of a respondent's sales of a given product are at prices less than the COP, we do not disregard any below-cost sales of that product, because we determine that in such instances 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 are at prices less than the COP, we determine that in such instances the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act.

We found that, for certain specific products, more than 20 percent of USIMINAS/COSIPA's home market sales were at prices less than the COP and, in addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same level of trade (LOT) as the EP or CEP LOT. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. Id. ; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 (Nov. 19, 1997).

In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market ( i.e., the “chain of distribution”), 5 including selling functions, 6 class of customer (“customer category”), and the level of selling expenses for each type of sale.

Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for EP and comparison market sales ( i.e., NV based on either home market or third country prices  7 ), we consider the starting prices before any adjustments. For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001).

When the Department is unable to find sales of the foreign like product in the comparison market at the same LOT as the EP or CEP LOT, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP or CEP sales at a different LOT in the comparison market, where available data make it practicable, we make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales only, if a NV LOT is more remote from the factory than the CEP LOT and there is no basis for determining whether the difference in LOTs between NV and CEP affected price comparability ( i.e ., no LOT adjustment was practicable), the Department shall grant a CEP offset, as provided in section 773(a)(7)(B) of the Act.

USIMINAS/COSIPA claimed that it made home market sales at two levels of trade. We analyzed the information on the record and found that USIMINAS/COSIPA performed different marketing functions in selling to its home market customers ( i.e., the affiliated resellers provided many services to their customers, while the mills only provided minimal services). Therefore, we determined that USIMINAS/COSIPA made home market sales at two levels of trade.

In the United States, USIMINAS/COSIPA reported that it made EP sales at one level of trade. Our analysis showed that USIMINAS/COSIPA's EP sales were made at one level of trade and we find that these sales were made at the same level of trade as the mill direct sales in the home market. Accordingly, where possible, we matched EP sales to home market mill direct sales and made no LOT adjustment because the sales were made at the same LOT. Where we matched EP sales to affiliated reseller home market sales, we made a LOT adjustment in accordance with section 773(a)(7)(A) of the Act because we found that there was a pattern of consistent price differences between the two home market LOTs.

For a detailed explanation of this analysis, see the concurrence memorandum.

We calculated NV based on delivered prices to unaffiliated customers or prices to affiliated customers that we determined to be at arm's-length, adjusted for billing errors and discounts. We made deductions from the starting price for taxes in accordance with section 773(a)(6)(B)(iii) of the Act. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Carbon and Certain Alloy Steel Wire Rod from Brazil, 67 FR 18165 (April 15, 2002). We recalculated certain taxes because USIMINAS/COSIPA did not consistently report them. In addition, we disallowed an adjustment for certain discounts for USIMINAS and Rio Negro because they were not reported on a customer-specific basis as requested in our supplemental questionnaire. For further discussion, see the sales calculation memorandum.

We also made deductions for movement expenses, including inland freight (plant to distribution warehouse and plant/warehouse to customer), warehousing and inland insurance under section 773(a)(6)(B)(ii) of the Act. For those freight expenses provided by an affiliated freight supplier, we assigned the lowest reported freight expense amount because USIMINAS/COSIPA did not provide evidence that these expenses were incurred at arm's length, despite a request that it do so. See the sales calculation memorandum.

In addition, we made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in circumstances of sale for imputed credit expenses (offset by interest revenue), certain warranty expenses, and commissions. We adjusted the reported credit expenses as follows: 1) for COSIPA, we assigned the negative weighted-average of the credit expenses reported in the home market sales listings for those sales which were paid in advance of shipment because COSIPA provided insufficient information to calculate the actual credit amounts; 2) for USIMINAS, Rio Negro, Fasal, and Dufer, we recalculated credit expenses using the short-term borrowing rate of COSIPA because these companies did not have short-term borrowings during the POI; and 3) for USIMINAS, we also recalculated the reported U.S. credit expenses using the date that the merchandise left the factory, rather than the date of the bill of lading, as the date of shipment. Regarding home market warranty expenses, USIMINAS/COSIPA based the amount of these expenses on the sales value of returned merchandise. We disallowed these expenses because USIMINAS/COSIPA also reported the resales of the returned merchandise in its home market sales listing. See the sales calculation memorandum. Regarding commissions, USIMINAS/COSIPA incurred commissions only in the home market. Therefore, we offset home market commissions by the lesser of the commission amount or U.S. indirect selling expenses.

Furthermore, we made adjustments for differences in costs attributable to differences in the physical characteristics of the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.

We also deducted home market packing costs and added U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of the Act. We disallowed certain packing expenses for USIMINAS/COSIPA's home market resellers because these expenses were aberrationally high in comparison to other packing expenses and were not explained by the respondent. See the sales calculation memorandum.

USIMINAS/COSIPA reported sales of the foreign like product to affiliated customers. To test whether these sales to affiliated customers were made at arm's length, where possible, we compared the prices of sales to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, and packing. Where the price to the affiliated party was, on average, 99.5 percent or more of the price to unaffiliated parties, we determined that sales made to the affiliated party were at arm's length. Consistent with section 351.403(c) of the Department's regulations, we excluded from our analysis those sales where the price to the affiliated parties was less than 99.5 percent of the price to the unaffiliated parties.

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.

As provided in section 782(i) of the Act, we will verify all information relied upon in making our final determination.

In accordance with section 733(d)(2) of the Act, we are directing the Customs Service to suspend liquidation of all imports of subject merchandise from Brazil 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 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:

The Department will disclose calculations performed within five days of the date of publication of this notice to the parties to the proceeding in this investigation in accordance with 19 CFR 351.224(b).

In accordance with section 733(f) of the Act, we have notified the ITC of our determination. If our final antidumping determination is affirmative, the ITC will determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. The deadline for that ITC determination would be the later of 120 days after the date of this preliminary determination or 45 days after the date of our final determination.

Case briefs for this investigation must be submitted to the Department no later than seven days after the date of the final verification report issued in this proceeding. Rebuttal briefs must be filed five days from the deadline date for case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Section 774 of the Act provides that the Department will hold a public hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by an interested party. If a request for a hearing is made in this investigation, the hearing will tentatively be held two days after the rebuttal brief deadline date at the U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 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.

We will make our final determination no later than 135 days after the publication of this notice in the Federal Register .

This determination is published pursuant to sections 733(f) and 777(i) of the Act.

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department of Commerce (Department's) regulations are to the regulations at 19 CFR part 351 (April 2001).

We preliminarily determine that certain cold-rolled carbon steel flat products (cold-rolled steel) from France are not being sold, or are not 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.

On October 18, 2001, the Department initiated antidumping duty investigations of cold-rolled steel from a number of countries, including France. See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198, (October 26, 2001) (Initiation Notice). Also on October 18, 2001, based on information provided in the petition, we found “reasonable grounds to believe or suspect” that sales of the foreign like product in the markets of Belgium, France, Germany, India, Japan, Korea, the Netherlands, Thailand, and Turkey were made at prices below their respective costs of production (COP) within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the Department initiated country-wide cost investigations on sales of the foreign like product in these markets. The petitioners in this investigation are Bethlehem Steel Corporation, LTV Steel Company, National Steel Corporation, Nucor Corporation, Steel Dynamics, Inc., WCI Steel, Inc., Weirton Steel Corporation, and United States Steel Corporation. Since the initiation of this investigation the following events have occurred.

The Department set aside a period for all interested parties to raise issues regarding product coverage. See Initiation Notice at 54198. From October 30, 2001, through November 8, 2001, petitioners filed comments proposing clarifications to the scope of these investigations. Also, from November to December 2001, the Department received numerous responses from interested parties aimed at clarifying the scope of the investigations.

On October 30, 2001, the Department issued a letter to interested parties in all of the concurrent cold-rolled steel antidumping investigations, providing an opportunity for comment on the Department's proposed model matching characteristics and hierarchy. On November 8, 2001, petitioners and the Usinor Group (Usinor) submitted comments on the Department's request for information. For purposes of the antidumping duty questionnaires subsequently issued by the Department to the respondents, no changes were made to the product characteristics or the hierarchy of those characteristics from those originally proposed by the Department in its October 18, 2001, letter.

On November 13, 2001, the United States International Trade Commission (ITC) notified the Department of its affirmative preliminary injury determination on imports of subject merchandise from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela. On November 20, 2001, the ITC published its preliminary determination determining that there is a reasonable indication that the United States industry producing cold-rolled steel is materially injured or threatened with material injury by reason of imports of the subject merchandise from cold-rolled steel from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela. See Certain Cold-Rolled Steel Products from Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 57985 (November 19, 2001).

On December 3, 2001, we selected the largest producer/exporter of cold-rolled steel, Usinor, from France as the mandatory respondent in this proceeding. For further discussion, see Memorandum from Nancy Decker and Angelica Mendoza to Richard O. Weible, Selection of Respondent(s), dated December 3, 2001.

The Department subsequently issued its antidumping duty questionnaire to Usinor on November 16, 2001. The questionnaire was divided into five parts, in which we requested that Usinor respond to Section A (general information, corporate structure, sales practices, and merchandise produced), Section B (home market or third-country sales), Section C (U.S. sales), Section D (cost of production/constructed value), and Section E (further manufacturing) where appropriate. The Department also issued corrected pages of the model matching criteria on November 26, 2001.

On December 26, 2001, the Department received Usinor's response to Section A of the questionnaire. On January 14, 2002, we received Usinor's response to Sections B through D of the Department's questionnaire.

On January 7, 2002, petitioners filed comments on Usinor's Section A response, and also requested that the Department require Usinor to report the resales of cold-rolled steel made by its affiliated steel service centers (SSCs). On January 17, 2002, Usinor submitted rebuttal comments. On January 31, 2002, we issued a letter requesting Usinor to report in its Section B response the sales made by five of its affiliated SSCs (Cisatol, Service Acier Rhenan (SAR), Société Lorraine de Produits Metallurgiques (SLPM), Sotracier, and Produits d'Usines Metallurgiques (PUM)) to the first unaffiliated end-customer. On January 28, 2002, and January 29, 2002, petitioners filed comments on Usinor's Section B through D response.

On January 18, 2002, we issued a supplemental questionnaire for deficiencies in Usinor's Section A response. On February 12, 2002, we issued a supplemental questionnaire for deficiencies in Usinor's Section B and C responses. On February 28, 2002, we issued a supplemental questionnaire for deficiencies found in Usinor's supplemental Section D response.

On January 31, 2002 and February 8, 2002, petitioners requested that the Department collapse Usinor's affiliated producers and SSCs of cold-rolled steel for this proceeding. On February 26, 2002, the Department determined to collapse eight of Usinor's affiliated producers (Sollac Atlantique S.A. (Atlantique), Sollac Lorraine S.A. (Lorraine), Sollac Méditerranée (Méditerranée), PUM, Usinor Packaging S.A. (Packaging), Etilam, Beautor S.A., and Haironville) into a single entity for purposes of this investigation. For further discussion, see Memorandum on Collapsing from John Drury and Angelica Mendoza through Richard O. Weible to Joseph A. Spetrini, dated February 26, 2002 (Collapsing Memo).

On February 11, 2002, we received Usinor's response to our supplemental Section A questionnaire. On February 14, 2002, we issued a letter requesting that Usinor report the order date associated with all invoiced sales of subject merchandise made during the POI. We received Usinor's responses to the Department's January 31, 2002, February 12, 2002, and February 14, 2002, requests for information on March 5, 2002.

On February 25, 2002, we issued a second supplemental questionnaire for deficiencies found in Usinor's supplemental Section A response. We received Usinor's response on March 13, 2002.

On March 28, 2002, we received Usinor's response to our supplemental questionnaire on Section D. Usinor also submitted new home market and U.S. sales databases to (1) incorporate a small quantity of home-market sales of second-quality merchandise sold by Haironville (affiliated cold-rolled steel producer) to affiliated home-market customers, and (2) to remove a small quantity of sales made by Etilam (affiliated cold-rolled steel producer) of “shadow mask steel” ( i.e. , non-subject merchandise) that were incorrectly included in the home market and U.S. sales databases. On April 15, 2002, we issued a second supplemental questionnaire for deficiencies found in Usinor's supplemental Section D response. We received Usinor's response on April 17, 2002.

On April 23, 2002, the Department issued Usinor a second supplemental questionnaire for deficiencies found in its March 5, 2002 and March 28, 2002 (with respect to its revised sales databases) questionnaire responses. The response to this request for information is due after our preliminary determination.

On February 7, 2002, petitioners made a timely request for a fifty-day postponement of the preliminary determination pursuant to section 733(c)(1)(A) of the Act. On February 14, 2002, we postponed the preliminary determination until no later than April 26, 2002. See Certain Cold Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela; Notice of Postponement of Preliminary Determinations in Antidumping Duty Investigations, 67 FR 8227 (February 22, 2002).

The period of investigation (POI) is July 1, 2000 through June 30, 2001. This period corresponds to the four most recent fiscal quarters prior to the filing of the petition ( i.e., September 28, 2001), and is in accordance with section 351.204(b)(1) of the Department's regulations.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, as well as a complete discussion of all scope exclusion requests submitted in the context of the on-going cold-rolled steel investigations, please see the “Scope Appendix” attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, published concurrently with this preliminary determination.

Section 776(a)(2)(A) of the Act provides that “if any 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.” The statute requires that certain conditions be met before the Department may resort to the facts otherwise available. Where the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department will so inform the party submitting the response and will, to the extent practicable, provide that party the opportunity to remedy or explain the deficiency. If the party fails to remedy the deficiency within the applicable time limits, the Department may, subject to 782(e), disregard all or part of the original and subsequent responses, as appropriate. Briefly, section 782(e) provides that the Department “shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all the applicable requirements established by the administering authority” if the information is timely, can be verified, is not so incomplete that it cannot be used, and if the interested party acted to the best of its ability in providing the information. Where all of these conditions are met, and the Department can use the information without undue difficulties, the statute requires it to do so.

On November 16, 2001, the Department issued Usinor its standard antidumping questionnaire. That questionnaire explicitly instructed Usinor to report sales from affiliated SSCs to the unaffiliated customers. We also directed Usinor to contact the agency official in charge in writing immediately if sales to all affiliated customers constituted less than five percent of total sales, or if Usinor was unable to collect the necessary information.

On December 26, 2001, Usinor stated, in its original Section A response, that it would not report the sales of subject merchandise made by its affiliated SSCs for three reasons: (1) the merchandise sold by these entities is not comparable to merchandise sold in the U.S. market; (2) the records for these sales transactions are not accessible by Usinor, as the affiliated SSCs use incompatible computer systems, distinct software, and different file structures, and therefore, it would be inordinately difficult to report these transactions; and (3) lastly, Usinor believed that the prices for the sales to the affiliated service centers were comparable to the prices for the sales to unaffiliated customers.

On January 7, 2002, petitioners requested that the Department require Usinor to report Section B responses for all sales transactions of cold-rolled steel made by its affiliated SSCs to the first unaffiliated customer. On January 16, 2002, the Department met with counsel for Usinor to discuss issues relating to the reporting of its downstream sales to unaffiliated customers ( see Letter from Abdelali Elouaradia to Jeffrey Winton dated January 18, 2002 (Reporting Letter)). On January 17, 2002, Usinor reiterated that it did not believe that any of its affiliated service centers should be required to report their resales. Usinor also requested that the Department limit its reporting requirements on this matter to avoid a disproportionate and unreasonable burden. Usinor proposed that it be required to report sales of cold-rolled steel made by only four of its affiliated service centers because these sales accounted for most of the purchases of subject merchandise from Usinor mills by affiliated service centers. Usinor further noted that the sales made by the remaining affiliated service centers accounted for less than five percent of total home-market sales. On January 31, 2002, the Department issued a letter requesting Usinor to resubmit its Section B response to the questionnaire and include sales made by five of its affiliated SSCs to the first unaffiliated customer. For further details, see the Department's letter dated January 31, 2002. On February 28, 2002, the Department requested that Usinor report cost information associated with the sales transactions made by the five affiliated SSCs.

On March 5, 2002, Usinor submitted Section B responses for sales made by five of its affiliated SSCs to unaffiliated customers. On March 18, 2002, petitioners filed comments on the responses made by Usinor's affiliated SSCs, noting that these sales of cold-rolled steel included sales made to affiliated customers. Petitioners further noted that sales made by Usinor to affiliated SSCs that are exempted from reporting their resales failed the arm's-length test and, therefore, the Department should apply facts available for these sales. As noted in the Department's January 31, 2002, letter, we determined that because these entities accounted for less than five percent of home market sales, Usinor did not have to report these resales. For the purposes of our preliminary determination, we are excluding from our margin analysis the sales made to these entities by Usinor that fail our arm's length or cost tests.

On March 28, 2002, Usinor submitted the requested cost information associated with sales of cold-rolled steel made by affiliated SSCs. On April 2, 2002, petitioners contended that Usinor submitted an incomplete and unusable response with regard to its downstream sales by SSCs and that the Department should apply adverse facts available in for these sales. On April 4, 2002, Usinor explained that in some instances, because one of the reporting affiliated service centers purchased merchandise from another reporting affiliated reseller, both the initial sale from the supplying reseller to the other, and any subsequent sale from the purchasing reseller to its customer, have been reported. Usinor further explained that as a result of such transactions its home market database includes the SSCs' sales of subject merchandise that had been purchased from affiliated mills and sales of subject merchandise that had been purchased from other affiliated SSCs. For purposes of our preliminary margin analysis, we have excluded all sales made by the five affiliated SSCs to each other and to affiliated mills (see Memorandum to the File regarding Antidumping Duty Investigation on Certain Cold-Rolled Carbon Steel Flat Products from France; Preliminary Determination Analysis for the Usinor Group, dated April 26, 2002, (Sales Analysis Memo)). Usinor also indicated in its April 4, 2002, letter that it had included resales of cold-rolled steel made by the five affiliated SSCs to other affiliated entities that appear to have resold some or all of such merchandise in the home market. Usinor therefore failed to report certain downstream resales of cold-rolled steel (those resales made by the SSCs' affiliated customers) to the first unaffiliated customer.

Because Usinor failed to fully provide all downstream sales to unaffiliated customers pursuant to the Department's request for this information, we preliminarily find, in accordance with section 776(a) of the Act, that the use of partial adverse facts available is appropriate for Usinor. Further, Usinor's failure to provide adequate explanations for its inability to provide the requested information indicates that Usinor has not acted to the best of its ability in responding to the Department's request for information. Therefore, the Department has also determined that Usinor has not acted to the best of its ability, and thus, application of an adverse inference is warranted, pursuant to section 776(b) of the Act. Accordingly, we have applied the highest gross unit price of subject merchandise sold to unaffiliated customers by model to those sales of cold-rolled steel made by the five affiliated resellers to affiliated customers by model that fail the arm's-length test. For those sales that did not have a model match, we applied the weighted-average gross unit price for those models with a match. (See Sales Analysis Memo.)

During this proceeding, the Department gathered information from Usinor regarding the date of payment used to calculate its per unit credit expense. On January 14, 2002, Usinor reported as the date of payment for U.S. sales the date on which it actually received payment, according to its accounts receivables ledger, from its unaffiliated customer. Usinor also reported that, for its U.S. sales of cold-rolled steel made during the POI through its affiliated “super distributor” (Usinor Steel Corporation, Inc. (USC)), it sold its accounts receivables to an affiliated financing company. After subsequent supplemental questionnaires, we learned that not only did USC sell its accounts receivables to an affiliated financing company, but in turn its affiliated financing company sold these accounts receivables to an unaffiliated funding company. On March 5, 2002, as requested by the Department, Usinor reported the date on which USC sold its accounts receivables to its affiliated financing company.

However, Usinor has failed to provide the Department the information necessary to allow us to understand the relationship between USC's affiliated financing company and the unaffiliated funding company, and the terms at which its affiliated financing company transfers title to the accounts receivable to this unaffiliated funding company. We preliminarily find, in accordance with section 776(a) of the Act, that the use of neutral facts available is appropriate for Usinor where Usinor has failed to provide us with the appropriate date of payment for its CEP sales made by USC in the United States. Therefore, based on the facts otherwise available, we are preliminarily calculating the credit period as the payment term applicable to each U.S. sale of cold-rolled steel made through USC where the difference between the reported payment date and the shipment date (i.e., sale date) is less than the indicated payment term. Accordingly, for such instances, we have recalculated Usinor's imputed credit expense using this calculated credit period ( see Sales Analysis Memo).

In some instances, Usinor did not report an expense associated with the movement of subject merchandise for sale in the home market and the United States and/or Usinor provided an estimated cost adjusted for a variance between its estimated and actual total expenses. Usinor stated that it was unable to systematically link the movement expenses in question to transaction-specific invoices. It is the Department's practice and preference to use actual expenses for its margin calculations. We preliminarily find, in accordance with section 776(a) of the Act, that the use of facts otherwise available is appropriate for Usinor where Usinor has failed to provide us with the actual expenses associated with the movement of its sales of cold-rolled steel during the POI in the home market and United States. Accordingly, for purposes of our preliminary determination, we applied a weighted-average movement expense using actual expenses provided by Usinor for those instances in which Usinor failed to report an expense or reported an adjusted estimated expense.

Pursuant to section 771(16) of the Act, all products produced by the respondent that are within the scope of the investigation and were sold in the comparison market during the POI, are considered to be foreign like products. We have relied on fourteen criteria, in descending order of importance, to match U.S. sales of subject merchandise to comparison-market sales of the foreign like product: whether hardened or not; whether painted with poly vinylidene fluoride, other paint, or not; carbon content level; quality; yield strength; thickness; thickness tolerance; width; whether mill, slit, deburred edged, or other edge; whether coiled or cut sheet; whether temper-rolled or not temper-rolled; whether stretch or tension leveled or not; whether annealed open coil, other annealed, or not annealed; and whether finished with bright, embossed/texturized, or matte surface. Where there were no sales of identical merchandise in the home market to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product, based on the characteristics and characteristic subcategories indicated in the Department's November 16, 2001 questionnaire.

To determine whether sales of cold-rolled steel from France to the United States were made at less than fair value, we compared constructed export price (CEP) and export price (EP), where appropriate, to the normal value (NV), as described in the “Constructed Export Price,” “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 and EPs, where appropriate, for comparison to weighted-average NVs.

For its home market and U.S. sales, Usinor reported the date of invoice as the date of sale, in keeping with the Department's stated preference for using the invoice date as the date of sale. Usinor stated that the invoice date best reflects the date on which the material terms of sale are established and that it is possible for the quantity, price or other terms of sale to be modified between order date and invoice date.

On January 7, 2002, petitioners requested that the Department require Usinor to report the frequency of changes made to a particular order between the order date and sale date. On February 14, 2002, the Department requested that Usinor submit the order date for all sales made during the POI. On March 5, 2002, Usinor reported the order date for all sales made during the POI in its home market and U.S. databases. Usinor indicated that for the most part when an order is modified, the original information recorded in the company's normal computer systems is written over with the new information, and the original record is not maintained. Usinor explained that for some of its reported sales transactions it is possible to determine that the record has been modified. However, Usinor further explained that it is not possible to determine which fields within the order have changed. Usinor concluded that the frequency of changes in price, quantity, or specifications between the initial order date and the final invoice date cannot be separately measured.

The Department is preliminarily using the invoice date as the date of sale for both home market and U.S. sales. We intend to examine this issue at verification, and will incorporate our findings in our analysis for the final determination.

In both the home and U.S. markets, Usinor had consignment sales in which subject merchandise was shipped to a storage facility at the customer's location. On February 12, 2002, the Department requested that Usinor report the date of sale as the date of shipment if the date of invoice is after the date of shipment for consignment sales transactions. For home market consignment sales, Usinor failed to comply with the Department's request, although for consignment sales made in the United States, Usinor reported, as requested, the date of shipment as the date of sale. For consignment sales made in the home market, we preliminarily determine that the date of shipment is the date of sale. For further details, see Sales Analysis Memo.

We used EP methodology in accordance with section 772(a) of the Act for sales where Usinor sold the merchandise under investigation before the date of importation directly to an unaffiliated purchaser in the United States. We based EP on packed prices to the first unaffiliated customer. In accordance with section 772(c)(2), we made deductions from the starting price for movement expenses, including foreign inland freight, inland insurance, foreign brokerage and handling, international freight, marine insurance, and U.S. customs duty.

Usinor reported as CEP transactions all sales of subject merchandise to its affiliated trading company, USC. USC then resold the subject merchandise to unaffiliated customers in the United States.

We calculated CEP, in accordance with subsection 772(b) of the Act, for those sales made by USC to unaffiliated purchasers in the United States. We based CEP on the packed, delivered, duty paid prices to unaffiliated purchasers in the United States. We made adjustments for discounts and rebates, where applicable. We also made deductions for freight charged to the customer and other movement expenses in accordance with section 772(c)(2)(A) of the Act; these included, where appropriate, foreign inland freight, foreign inland insurance, foreign brokerage and handling, international freight, marine insurance, U.S. inland freight, U.S. inland insurance, other U.S. transportation fees, and U.S. customs duty. 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 commissions, direct selling expenses (warranty expenses and credit expenses), U.S. inventory carrying costs, and U.S. indirect selling expenses. For CEP sales, we also made an adjustment for profit in accordance with section 772(d)(3) of the Act. For sales of cold-rolled steel that were coded as non-prime, we re-coded these sales as prime as Usinor did not provide sufficient evidence showing that these sales are actually of non-prime merchandise ( see Sales Analysis Memo). We also removed all canceled sales from our analysis ( see Sales Analysis Memo). For further information on adjustments made to our margin calculation please see Sales Analysis Memo.

In order to determine whether there was 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 was 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. As 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 of the subject merchandise, we determined that the home market was viable. Therefore, we have based NV on home market sales in the usual commercial quantities and in the ordinary course of trade. For those instances in which Usinor did not report a payment date with respect to its home market sales which have not been paid, we assigned the date of this preliminary determination (April 26, 2002) as the date of payment ( see Sales Analysis Memo). For warranty expenses that were reported for Usinor's sales of cold-rolled steel produced by Atlantique, Lorraine, and Etilam, we multiplied the gross unit price by the calculated product family and customer-specific warranty expenses (reported by Usinor in its Appendix SB-12 and Appendix SB-14, respectively, dated March 5, 2002). For further information on adjustments made to our margin calculation see Sales Analysis Memo.

To test whether sales to affiliated service centers and end-users are made at arm's-length prices, we compare, on a model-specific basis, the prices of sales to affiliated customers with sales to unaffiliated customers net of all movement charges, billing adjustments, discounts, direct selling expenses, and packing. Where, for the tested models of foreign like product, prices to the affiliated party are on average 99.5 percent or more of the price to unaffiliated parties, we determine that such sales are made at arm's length prices. See 19 CFR 351.403(c); see also Antidumping Duties; Countervailing Duties Final Rule, 62 FR 27355 (May 19, 1997).

If these affiliated party sales satisfied the arm's-length test, we used them in our analysis. Merchandise sold to affiliated customers in the home market made at non-arm's-length prices were excluded from our analysis because we considered them to be outside the ordinary course of trade. See 19 CFR 351.102. 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.

Based on our analysis of the cost allegations submitted by petitioners in the original petition, the Department found reasonable grounds to believe or suspect that French producers had made sales of cold-rolled steel in the home market at prices below the cost of producing the merchandise, in accordance with section 773(b)(2)(A)(i) of the Act. As a result, the Department initiated an investigation to determine whether respondents made home market sales during the POI at prices below their cost of production (COP) within the meaning of section 773(b) of the Act. We conducted the COP analysis described below.

In accordance with section 773(b)(3) of the Act, we calculated a weighted average COP based on the sum of Usinor's cost of materials and fabrication for the foreign like product, plus an amount for home market selling, general and administrative expenses (SG&A) including, interest expenses, and packing costs.

We relied on information from Usinor's section D questionnaire responses to calculate COP, except for the following changes: (1) Revised the total cost of manufacturing to include a cost classification variance between the financial and cost accounting systems for three of the collapsed companies (Atlantique, Lorraine, and Packaging); (2) included inland freight, inventory carrying cost, indirect selling and packing expenses between Usinor and its affiliates in the COP of the affiliated resellers, for the merchandise under consideration that was further manufactured by affiliates prior to sale to an unaffiliated party; (3) adjusted the reported value of slab and coil inputs obtained from affiliated parties to reflect the higher of transfer or market price; (4) revised the per-unit SG&A expenses to include application of the SG&A rate to the yield loss variable for the affiliated resellers; (5) revised the SG&A rate calculations to include certain expenses classified as extraordinary in the numerators, for Atlantique, Lorraine, Packaging, and Beautor. For Atlantique, Lorraine, and Packaging, we also revised the SG&A rate calculations to include foreign exchange losses and miscellaneous SG&A related accruals and provisions; (6) revised Etilam's SG&A rate calculation to exclude net exchange gains on accounts receivables from the numerator; (7) revised the unabsorbed SG&A costs rate calculation to exclude transportation costs from the denominator; (8) revised the financial expense rate calculation to exclude research and development costs from the denominator (the COP and CV files submitted by respondent did not reflect the submitted financial expense rate); and (9) based the difference in merchandise adjustment on the total cost of manufacturing rather than variable cost of manufacturing since certain fixed costs were included in variable costs in the affiliated resellers' COP and CV files, for the merchandise under consideration that was further manufactured by affiliates prior to sale to an unaffiliated party. For further details, see Memorandum from Heidi Schriefer to Neal Halper, dated April 26, 2002, Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Determination (Cost Calculation Memo). We compared the weighted-average COP for Usinor to home market sales prices of the foreign like product, as required under section 773(b) of the Act. In determining whether to disregard home market sales made at prices less than the COP, we examined whether such sales were made (1) in substantial quantities within an extended period of time, and (2) at prices which permitted the recovery of all costs within a reasonable period of time in accordance with sections 773(b)(1)(A) and (B) of the Act. On a product-specific basis, we compared the COP to home market prices, less any applicable movement charges, billing adjustments, and discounts and rebates.

Pursuant to section 773(b)(2)(C)(i) of the Act, where less than twenty percent of Usinor's sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in substantial quantities. Where twenty percent or more of Usinor'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, in accordance with section 773(b)(2)(C)(i) of the Act, within an extended period of time. In such cases, because we compared prices to weighted-average COPs for the POI, we also determined that such sales were not made at prices that would not permit recovery of all costs within a reasonable period of time, in accordance with section773(b)(2)(D) of the Act. Therefore, we disregarded those below-cost sales.

In accordance with section 773(e)(1) of the Tariff Act, we calculated CV, where applicable, based on the sum of respondent's cost of materials, fabrication, SG&A including, interest expenses, and profit. We made the same adjustments to the submitted CV data as noted above in the “Cost of Production” section. In accordance with section 773(e)(2)(A) of the Tariff Act, we based SG&A and profit on the amounts incurred and realized by Usinor in connection with the production and sale of the foreign like product in the ordinary course of trade for consumption in the foreign country.

We calculated NV for Usinor on prices of home market sales that passed the COP test. We made adjustments for billing adjustments and discounts. We made deductions, where appropriate, for warehousing, foreign inland freight, freight adjustments, and inland insurance, pursuant to section 773(a)(6)(B) of the Act. In addition, we made adjustments for differences in physical characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii) of the Act, as well as for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We made COS adjustments for imputed credit expenses and warranties. Finally, we deducted home market packing costs in accordance with section 773(a)(6)(A) and (B) of the Act. We have removed sales transactions that were identified as sample or testing/evaluation sales from our margin calculation (see Sales Analysis Memo). Usinor reported that, during the POI, it paid affiliated sales agents commissions for their handling of some cold-rolled steel sales in home market and United States. During the course of this proceeding, the Department requested that Usinor provide evidence for the record showing that these transactions were made at arm's length. With respect to commissions paid for sales of cold-rolled steel made in the home market, Usinor reported commissions paid to its affiliated selling agents. However, Usinor reported actual selling expenses incurred by its affiliated selling agents with respect to sales of cold-rolled steel made in the United States. We preliminarily find that Usinor has not sufficiently demonstrated that the reported commissions it paid to affiliated selling agents were made at arm's length. Therefore, we did not make adjustments for commissions in the home market. There was one more instance in which the Department preliminarily denied Usinor an adjustment to its NV. Due to the proprietary nature of this adjustment, we have explained this calculation in our preliminary analysis memo (see Sales Analysis Memo). We also excluded all intra-company transactions made between collapsed entities and all sales by the affiliated SSC's to other affiliated producers or SSCs that have already reported the resales to the first unaffiliated customer.

In accordance with section 773(a)(4) of the Act, we based NV on CV if we were unable to find a home market match of identical or similar merchandise. We calculated CV based on the costs of materials and fabrication employed in producing the subject merchandise, SG&A, and profit. In accordance with section 773(a)(2)(A) of the Act, we based SG&A expense, interest, 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 France. For selling expenses, we used the weighted-average home market selling expenses. Where appropriate, we made adjustments to CV in accordance with section 773(a)(8) of the Act. When we compared CV to CEP, we deducted from CV the weighted-average home market direct selling expenses.

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 CEP transaction. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on CV, is that of the sales from which we derive selling, general and administrative (SG&A) expenses and profit. For CEP, it is the level of the constructed sale from the exporter to the importer.

To determine whether NV sales are at a different LOT than U.S. sales, we examine whether the respondent's sales involved different marketing stages (or their equivalent) based on the channel of distribution, customer categories, and selling functions (or services offered) to each customer or customer category, in both markets. If the comparison market sales are made at different LOTs and the difference affects price comparability, as manifested in a pattern of consistent price differences between LOTs, and if the comparison market sale is at a different LOT from the export transaction, we make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV is determined at a LOT at a more advanced stage of marketing than the CEP LOT, and despite the fact that the respondent has cooperated to the best of its ability, the data available do not provide an appropriate basis to determine whether the difference in LOT affects price comparability, the Department will grant a CEP offset. See section 351.412(f)(1) of the Department's regulations.

In the home market, Usinor made sales to unaffiliated and affiliated end-users, unaffiliated distributors, and affiliated and unaffiliated SSCs. Usinor claims five channels of distribution with respect to these sales: (1) Sales shipped from the mill directly to unaffiliated end-users, distributors or service centers; (2) consignment sales, in which the merchandise is shipped to a storage location at the customer's site; (3) sales from the mills to affiliated producers of downstream products that processed the products into non-subject products prior to sale to the first unaffiliated customer; (4) sales from the mills to affiliated service centers, which generally processed the merchandise into slit strip or cut-to-length sheets, and then sold the processed strips and sheets to affiliated or unaffiliated customers; and (5) sales by affiliated service centers to unaffiliated customers. Usinor claimed two LOTs in the home market: LOT 1 includes direct and consignment sales to unaffiliated end-users, unaffiliated distributors, affiliated and unaffiliated steel service centers, and affiliated customers that used cold-rolled steel as an input for the production of downstream products by Usinor's producing mills; and LOT 2 includes direct sales to affiliated and unaffiliated end-users, and affiliated steel service centers by Usinor's affiliated SSCs.

In the U.S. market, Usinor made sales to unaffiliated end-users and affiliated steel service centers. Usinor claims two channels of distribution with respect to these sales: (1) direct shipment sales; and (2) consignment sales. Usinor claims two LOTs in the U.S.: LOT 1 includes direct and consignment sales made by USC; and LOT 2 includes direct sales made by Usinor.

On February 26, 2002, the Department determined to collapse the eight Usinor affiliated producers (Atlantique, Lorraine, Méditerranée, Packaging, Etilam, Beautor, Haironville and PUM) into a single entity for purposes of this investigation. ( See Collapsing Memo.) Therefore, for our preliminary LOT analysis we have considered there to be only four channels of distribution in the home market: (1) Direct sales to unaffiliated customers ( i.e., end-users, distributors, and SSCs); (2) consignment sales to unaffiliated customers; (3) sales to affiliated SSCs (that were excluded from reporting their resales— see Reporting Letter); and (4) sales made by the five affiliated SSCs to unaffiliated customers ( i.e., end-users, distributors, and service centers).

Usinor claims that CEP sales (those sales made through its affiliated trading company, USC) were made at a LOT more removed than the LOT of the home market sales made by its affiliated SSCs to unaffiliated customers. Usinor requests that the Department grant a CEP offset on all CEP sales, as Usinor's CEP sales cannot be compared to home market sales at the same LOT.

In determining whether a separate LOT actually existed in the home market, we first examined if sales involved different marketing stages (or their equivalent) and selling functions along the chain of distribution by Usinor and its unaffiliated customers and the affiliated service centers to their unaffiliated customers. Normally, stages of marketing focus on whether sales are to SSCs or end-users, in some instances taking into account whether or not sales are made through intermediate parties. On this basis, it appears that Usinor's sales shipped from the mill directly, or on consignment basis to its unaffiliated customers (all customer categories), are made at the same stage of marketing as sales made by its affiliated service centers to their unaffiliated customers.

In further analyzing Usinor's LOT claims in the home market, we reviewed available information on the record about the company's selling functions performed in the home market. Usinor identified 20 different selling functions ( see Exhibit SSA-4 of Usinor's March 13, 2002, second supplemental Section A response) associated with its sales to unaffiliated customers.

Next, we examined whether these selling functions are provided consistently to Usinor's four categories of customers in the home market, finding that all selling functions were provided to the same degree ( i.e., high level of activity) to all customer categories ( i.e., end-users, distributors, and SSCs), except for post-sale warehousing for consignment sales, visiting customers and promoting products for sales to affiliated service centers. In this case, we do not consider the difference in selling functions to be a significant difference considering that the majority of sales made in the home market were non-consignment sales and post-sale warehousing is only one selling function out of a total of twenty offered selling functions. Therefore, we preliminarily determine that only one LOT existed for Usinor in the home market.

In determining whether separate LOTs actually existed in the U.S. market, we first examined whether Usinor's sales involved different marketing stages (or their equivalent) and selling functions along the chain of distribution between Usinor and its unaffiliated customers. As noted above, generally the stages of marketing focus on whether sales are to SSCs or end-users, in some instances taking into account whether or not sales are made through intermediate parties. On this basis, it appears that Usinor's cold-rolled steel sales shipped directly from the mill to unaffiliated customers may be at a different stage of marketing than its sales made through USC. This would indicate that Usinor has two U.S. LOTs.

In determining whether the LOT in the home market is at a more removed LOT than LOT 1 that exists in the United States, as Usinor claims, we examined the selling functions performed by Usinor for CEP sales. According to Usinor, the selling functions that were provided for its CEP sales were the same as those provided in the home market, except for administrative support. We noted that the level at which the selling functions were performed by Usinor were not common to its CEP and home market sales ( e.g., customer sales contact, production planning and order evaluation, warranty claims, technical service, and freight and delivery services were provided to home market sales, but not to CEP sales). Consequently, we preliminarily determine that Usinor provided significantly different selling functions in the home market than those in the U.S. market for CEP sales.

With respect to its sales made at LOT 2, based on EP, in the United States, we noted insignificant differences in the level at which certain selling functions were performed ( i.e., product brochures, general inventory maintenance) and thus, found these selling functions to be comparable to the home market LOT, and therefore no LOT adjustment was needed.

We next examined whether a LOT adjustment was appropriate when Usinor's CEP sales are compared to the home market LOTs. The Department makes this adjustment when it is demonstrated that a difference in LOTs affects price comparability. 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). In the instant case, we were unable to quantify the LOT adjustment in accordance with section 773(a)(7)(A) of the Act, as we found only one LOT in the home market. Instead, because we determined that all of Usinor's home market sales were made at levels of trade more advanced than the LOT of Usinor's U.S. sales, we granted a CEP offset and applied this to comparisons between Usinor's CEP sales and all home market sales.

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, in accordance with section 773A(a) of the Tariff Act.

As provided in section 782(i) of the Act, we intend to verify all information to be used in making our final determination.

In accordance with section 733(b)(3) of the Act, the Department will disregard any weighted-average dumping margin that is zero or de minimis, i.e. less than 2 percent ad valorem. Based on our preliminary margin calculation, we will not direct the U.S. Customs Service to suspend liquidation of any entries of cold-rolled steel from France as described in the “Scope of Investigation” section, that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register . The Department does not require any cash deposit or posting of a bond for this preliminary determination. The weighted-average dumping margin in the preliminary determination is as follows:

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, within 75 days after the date of our final determination, whether these imports are materially injuring, or threatening material injury to, the U.S. industry.

Case briefs for this investigation must be submitted no later than one week after the issuance of the verification reports. Rebuttal briefs must be filed within five days after the deadline for submission of case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes.

Section 774 of the Act provides that the Department will hold a hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by any interested party. If a request for a hearing is made in an investigation, the hearing will tentatively be held two days after the deadline for submission of the rebuttal briefs, at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230. In the event that the Department receives requests for hearings from parties to several cold-rolled steel cases, the Department may schedule a single hearing to encompass all those cases. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time. Interested parties who wish to request a hearing, or participate if one is requested, must submit a written request within 30 days of the publication of this notice. Requests should specify the number of participants and provide a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs.

If this investigation proceeds normally, we will make our final determination no later than 75 days after the date of this preliminary determination.

This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act.

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department of Commerce (“Department's”) regulations are to 19 CFR part 351 (April 2001).

On October 18, 2001, the Department initiated antidumping duty investigations on cold-rolled steel ( See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 2001)) ( Initiation Notice ).

On October 18, 2001, based on information provided in the petition, we found “reasonable grounds to believe or suspect” that sales of the foreign like products in Korea were made at prices below the cost of production (“COP”) within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the Department initiated a country-wide cost investigation on sales of the foreign like products in this market. Since the initiation of this investigation the following events have occurred.

On October 31, 2001, we solicited comments from interested parties regarding the criteria to be used for model-matching purposes, and we received comments on our proposed matching criteria on November 8, 2001 from the petitioners and respondents. On November 26, 2001, we informed respondents of our revised model match criteria.

On November 13, 2001, the United States International Trade Commission (“ITC”) preliminarily determined that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports from Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela of cold-rolled steel products. See Certain Cold-Rolled Steel Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 57985 (November 19, 2001).

On November 16, 2001, the Department issued an antidumping questionnaire to Pohang Iron & Steel CO. Ltd. (“POSCO”) and Dongbu Steel Co., Ltd., (“Dongbu”). 1 The petitioners made an allegation of sales below COP in the petition. Based on the factual information contained in the petition, we found “reasonable grounds to believe or suspect” that sales below cost occurred. See Initiation Notice 66 FR at 54212-13. Accordingly, the Department initiated the requested country-wide cost investigation.

On November 29, 2001, we made a final determination and consequently selected POSCO and Dongbu, the largest two producers/exporters of cold-rolled steel from Korea, as the mandatory respondents in this proceeding. For further discussion, see the memorandum to Melissa Skinner, Director, Office 6, from Mark Young: Selection of Respondents, dated November 29, 2001 (“ Selection of Respondents Memo ”).

On December 7, 2001, and January 14, 2002, Nucor Corporation, Steel Dynamics, Inc., WCI Steel, Inc., and Weirton Steel Company  2 made submissions requesting that the Department make an expedited finding that critical circumstances exist with respect to imports from Korea. See Critical Circumstances section below for further discussion.

During the period December 2001 through April 2002, the Department received responses from POSCO and Dongbu regarding the Department's original and supplemental questionnaires.

On February 5, 2002, the respondents submitted comments regarding petitioners' December 7, 2001 and January 14, 2002 letters alleging that critical circumstances exist with respect to imports of subject merchandise from Korea. Respondents' comments regarding POSCO were inadvertently omitted from the Departments' preliminary determination of critical circumstances ( see Critical Circumstances section, infra ). Accordingly, we addressed respondents' comments through a memo to the file. See Memorandum to File, from Mark Manning: Respondents' Arguments Concerning the Preliminary Determination of Affirmative Critical Circumstances, dated April 26, 2002. Moreover, on April 12, 2002 the petitioners' submitted a letter with additional comments in support of their request for an expedited finding that critical circumstances exist. However, the petitioners' letter arrived after our preliminary critical circumstance finding had been signed, therefore we will address petitioners' comments in our final determination.

On February 7, 2002, pursuant to 19 CFR 351.205(e), Bethlehem Steel Corporation, National Steel Corp., and United States Steel Corporation made a timely request to postpone the preliminary determination. We granted this request on February 22, 2002, and postponed the preliminary determination until no later than April 26, 2001. ( See Postponement of Preliminary Determinations of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products from Argentina (A-357-816), Australia (A-602-804), Belgium (A-423-811), Brazil (A-351-834), the People's Republic of China (A-570-872), France (A-427-822), Germany (A-428-834), India (A-533-826), Japan (A-588-859), Korea (A-580-848), the Netherlands (A-421-810), New Zealand (A-614-803), Russia (A-821-815), South Africa (A-791-814), Spain (A-469-812), Sweden (A-401-807), Taiwan (A-583-839), Thailand (A-549-819), Turkey (A-489-810) and Venezuela (A-307-822), 67 FR 8227 (February 22, 2002).)

On April 3, 16, and 18, 2002, petitioners submitted comments regarding POSCO's U.S. selling practices through a Korean trading company and both companies' U.S. affiliates ( i.e., “U.S. Channel 3” sales). On April 11, 2002, POSCO submitted comments in rebuttal to petitioners' April 3, 2002 comments. See “POSCO's U.S. Channel 3 Sales” in the Export Price section below for further discussion.

On April 9, 2002, petitioners submitted comments on POSCO and its affiliates. On April 12 and 15, 2002, petitioners submitted comments on Dongbu and its affiliates.

On April 15, 2002, respondents submitted rebuttal comments to the petitioners' April 9, 2002 submission regarding POSCO. On April 18, 2002, respondents submitted rebuttal comments to the petitioners' April 12 and 15, 2002 submission regarding Dongbu.

On April 17, 2002, respondents submitted comments on the Department's preliminary determination of critical circumstances ( see Critical Circumstances section, infra ).

On April 18, 2002, petitioners submitted comments on POSCO's April 11, 2002 rebuttal comments.

On April 10, 2002, the Department preliminarily determined that critical circumstances exist with respect to all imports of cold-rolled steel from Korea except for those from Dongbu, ( i.e., POSCO and all others). See Memorandum From Bernard Carreau to Faryar Shirzad Re: Preliminary Affirmative Determinations of Critical Circumstances; see also Notice of Preliminary Determination of Critical Circumstances: Certain Cold-Rolled Carbon Steel Flat Products From Australia, the People's Republic of China, India, the Republic of Korea, the Netherlands, and the Russian Federation, 67 FR 19157 (April 18, 2002) ( Critical Circumstances Notice ).

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, as well as a complete discussion of all scope exclusion requests submitted in the context of the on-going cold-rolled steel investigations, please see the “Scope Appendix” attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, published concurrently with this preliminary determination.

Section 777A(c)(1) of the Act directs the Department to calculate individual dumping margins for each known exporter and producer of the subject merchandise. Where it is not practicable to examine all known producers/exporters of subject merchandise, section 777A(c)(2) of the Act permits the Department to investigate either (1) a sample of exporters, producers, or types of products that is statistically valid based on the information available at the time of selection, or (2) exporters and producers accounting for the largest volume of the subject merchandise that can reasonable be examined. Using company-specific export data for the period of investigation (“POI”), which we obtained from a variety of sources under the Harmonized Tariff Schedules of the United States number that corresponds to the subject merchandise, we found that thirty producers/exporters from Korea may have exported cold-rolled steel to the Untied States during the POI. According to the data on the record, POSCO and Dongbu represented more than 80 percent of the imports during the POI. Due to limited resources, we determined that we could only investigate the two largest producers/exporters. See, Selection of Respondents Memo. Therefore, we designated POSCO and Dongbu as the mandatory respondents and sent both companies the Department's antidumping questionnaire.

The POI is July 1, 2000, through June 30, 2001.

To determine whether sales of cold-rolled steel from Korea to the United States were made at LTFV, we compared the export price (“EP”) or constructed export price (“CEP”) to the normal value (“NV”), as described in the “Export Price,” “Constructed Export Price,” and “Normal Value” sections of this notice below. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI weighted-average EPs and CEPs to weighted-average NVs.

In accordance with section 771(16) of the Act, we considered all products produced and sold by the respondents in the home market during the POI that fit the description in the “Scope of Investigation” section of this notice 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: hardening and tempering, paint, carbon level, quality, yield strength, minimum thickness, thickness tolerance, width, edge finish, form, temper rolling, leveling, annealing, surface finish, specification, and grade or type.

We calculated EP for POSCO and Dongbu, in accordance with section 772(a) of the Act, for those sales where the merchandise was sold to the first unaffiliated purchaser in the United States prior to importation by the exporter or producer outside the United States, or to an unaffiliated purchaser for exportation to the United States, based on the facts of record. We based EP on the packed delivered price to unaffiliated purchasers in the United States. Where appropriate, we made adjustments for price-billing errors and freight revenue. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act; these included, where appropriate, ocean freight, marine insurance, U.S. brokerage and handling (including bank and wharfage charges for POSCO), and U.S. customs duties (including harbor maintenance fees and merchandise processing fees).

On April 3, 16, and 18, 2002, petitioners submitted comments regarding POSCO's U.S. selling practices through a Korean trading company and both companies' U.S. affiliates, expressing concern that POSCO may have dumped subject merchandise through a particular channel by way of a middleman or other questionable means ( i.e., “U.S. Channel 3” sales). On April 11, 2002, POSCO submitted comments in rebuttal to petitioners' April 3, 2002 comments.

The petitioners state that the Department needs to collect additional data to evaluate POSCO's “U.S. Channel 3” transactions in greater detail. Moreover, petitioners claim the data and analysis POSCO submitted in its April 11, 2002 submission indicate that POSCO has the ability to provide the Department with the information and data it needs to adequately address the issues raised about these sales. On April 17, 2002, the Department issued a supplemental questionnaire to POSCO which specifically addresses the Department's concerns about these sales. POSCO's reply to this request for information was not available in time for purposes of making our preliminary determination, but we will continue to collect information as necessary and parties are encouraged to comment on this topic for the final determination.

For POSCO and Dongbu, in accordance with section 772(b) of the Act, we calculated CEP for those sales where the merchandise was sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter.

We based CEP on the packed delivered prices to unaffiliated purchasers in the United States. Where appropriate, we made adjustments for price-billing errors. 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, ocean freight, marine insurance, U.S. brokerage and handling, and U.S. customs duties (including harbor maintenance fees and merchandise processing fees). For further discussion, see the Sales Calculation Memorandum, dated April 26, 2002 (“Calculation Memorandum”). In accordance with section 772(d)(1) of the Act and 19 CFR 351.402(b), we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (commissions and imputed credit costs), and indirect selling expenses (including inventory carrying costs).

Pursuant to section 772(d)(3) of the Act, we further reduced the starting price by an amount for profit to arrive at CEP. In accordance with section 772(f) of the Act, we calculated the CEP profit rate using the expenses incurred by POSCO and Dongbu, respectively, and their affiliates on their sales of the subject merchandise in the United States and the foreign like product in the home market and the profit associated with those sales.

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared each respondent's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(B) of the Act. Because each respondent's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market was viable for the respondent.

For POSCO sales to affiliated customers for consumption in the home market which were determined not to be at arm's length were excluded from our analysis. To test whether these sales were made at arm's length, for both Dongbu and POSCO we compared the prices of sales of comparison products to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, discounts, and packing. Pursuant to 19 CFR 351.403(c) and in accordance with our practice, where the prices to the affiliated party were on average less than 99.5 percent of the prices to unaffiliated parties, we determined that the sales made to the affiliated party were not at arm's length. See e.g., Notice of Final Results and Partial Rescission of Antidumping Duty Administrative Review: Roller Chain, Other Than Bicycle, From Japan, 62 FR at 60472, 60478 (November 10, 1997), and Antidumping Duties; Countervailing Duties: Final Rule (“Antidumping Duties”), 62 FR at 27295, 27355-56 (May 19, 1997). We included in our NV calculations those sales to affiliated customers that passed the arm's length test in our analysis. See 19 CFR 351.403; Antidumping Duties, 62 FR at 27355-56.

Based on our analysis of an allegation contained in the petition, we found that there were reasonable grounds to believe or suspect that POSCO and Dongbu were selling cold-rolled steel in the home market at prices below their respective COPs. Accordingly, pursuant to section 773(b) of the Act, we initiated a country-wide sales-below-cost investigation to determine whether sales were made at prices below their respective COPs ( see Initiation Notice at 66 FR 54198, 54206).

In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the cost of materials and fabrication for the foreign like product, plus an amount for general and administrative expenses (“G&A”), including interest expenses, and home market packing costs ( see “Test of Home Market Sales Prices” section below for treatment of home market selling expenses). We relied on the COP data submitted by each respondent except for the following adjustments:

1. We adjusted Dongbu's reported G&A expense to exclude gain on sale of land from the calculation of the G&A expense rate.

2. We adjusted Dongbu's reported interest expense rate. We used Dongbu's consolidated audited financial statements figures in the calculation of the interest expense rate.

1. We revised POSCO's reported G&A expenses to exclude the gains on disposition of marketable securities, the gains on valuation of marketable securities, and the reversal of the allowance for bad debt. We also included foreign currency exchange gains on accounts payable and other foreign currency exchange losses in the reported G&A expense to calculate the G&A expense rate.

2. We revised POSCO's reported consolidated financial expense to include foreign currency exchange losses from loans payable and foreign currency exchange gains from cash to calculate the financial expense rate.

On a product-specific basis, we compared the adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether the sales prices were below the COP. The prices were exclusive of any applicable movement charges, rebates, discounts, and direct and indirect selling expenses. In determining whether to disregard home market sales made at prices less than their COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time.

Pursuant to section 773(b)(2)(C), where less than 20 percent of the respondent's sales of a given product are at prices less than the COP, we do not disregard any below-cost sales of that product, because we determine that in such instances 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 are at prices less than the COP, we determine that in such instances the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act.

We found that, for certain specific products, more than 20 percent of POSCO's and Dongbu's home market sales were at prices less than the COP and, in addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales, if any, as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

We calculated NV based on delivered prices to unaffiliated customers. We made deductions, where appropriate, from the starting price for early payment discounts. We also made deductions for movement expenses, including inland freight (plant to distribution warehouse, plant/warehouse to customer, and affiliated reseller to customer) and warehousing under section 773(a)(6)(B)(ii) of the Act. In addition, we made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in circumstances of sale for imputed credit expenses and commissions.

Furthermore, we made adjustments for differences in costs attributable to differences in the physical characteristics of the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We also deducted home market packing costs and added U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of the Act. Finally, for comparisons to POSCO's CEP sales, we made a CEP offset pursuant to section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). We calculated the CEP offset as the lesser of the indirect selling expenses on the comparison-market sales or the indirect selling expenses deducted from the starting price in calculating CEP.

Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same level of trade (“LOT”) as the EP or CEP transaction. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. Id.; See also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa , 62 FR 61731, 61732 (November 19, 1997). In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system, for each respondent, in each market ( i.e. , the “chain of distribution”),  3 including selling functions, class of customer (“customer category”), and the level of selling expenses for each type of sale.

Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for EP and comparison market sales ( i.e. , NV based on either home market or third country prices  4 ), we consider the starting prices before any adjustments. For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Act. See Micron Technology, Inc. v. United States , Court Nos. 00-1058, 00-1060 (Fed. Cir. 2001).

When the Department is unable to find sales of the foreign like product in the comparison market at the same LOT as the EP or CEP, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP or CEP sales to sales at a different LOT in the comparison market, where available data make it practicable, we make a LOT adjustment under section 773(a)(7)(A) of the Act if the difference in level of trade is demonstrated to affect price comparability. For CEP sales only, if a NV LOT is more remote from the factory than the CEP LOT, and there is no basis for determining whether the difference in LOTs between NV and CEP affected price comparability ( i.e. , no LOT adjustment was practicable), the Department will grant a CEP offset, as provided in section 773(a)(7)(B) of the Act. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa , 62 FR 61731 (November 19, 1997).

We obtained information from each respondent regarding the marketing stages involved in making the reported home market and U.S. sales, including a description of the selling activities performed by each respondent for each channel of distribution. Company-specific LOT analyses containing business proprietary information are incorporated into the company-specific calculation memoranda. Company-specific LOT findings are summarized below.

POSCO reported home market sales through three channels of distribution and to three customer categories. We examined the chain of distribution and the selling activities associated with sales reported by POSCO to each of its customer categories in the home market. We found that these three categories (service centers, trading companies, and end-users) did not differ significantly from each other with respect to selling activities,  5 although there were slight differences between them for meeting with customers and inventory management. See Appendix A-6 of POSCO's response to the Department's questionnaire, dated December 14, 2001. Based on our overall analysis, we found that POSCO performs virtually the same selling functions with the same intensity for all its home market customers regardless of their channel of distribution in the home market. Therefore, we preliminarily determine that POSCO made home market sales at one LOT during the POI.

In the U.S. market, POSCO made EP and CEP sales through three channels of distribution and one customer category (trading companies). We examined the chain of distribution and the selling activities associated with sales reported by POSCO to trading companies in the U.S. market. The information on the record demonstrates that the selling activities that POSCO reported for its sales through U.S. channels 1 and 2 ( i.e. , POSCO's CEP sales) differed significantly from its sales through U.S. channel 3 ( i.e. , POSCO's EP sales). In particular, for POSCO's EP sales, POSCO performs all categories of selling functions. However, for POSCO's CEP sales, there are several selling functions that POSCO's U.S. affiliate, Pohang Steel America Corp. (“POSAM”) is heavily involved in and performs exclusively: POSAM negotiates the sales terms, meets with customers, invoices unaffiliated customers, performs market research, handles importation documents, serves as importer of record, pays U.S. customs duties and wharfage, and extends credit for CEP sales.

Based on our overall analysis, we found that the three U.S. market sales channels constituted two different levels of trade (U.S. LOT 1 for U.S. channels 1 and 2, and U.S. LOT 2 for channel 3). We then compared the U.S. LOTs to the home market LOT. We preliminarily determine that U.S. channel 3 and home market channels 1, 2, and 3 are at the same LOT because the selling functions that POSCO provides are virtually the same in both markets and do not vary according to whether subject merchandise is ultimately destined for the U.S. market or the home market. Thus, we matched U.S. LOT 2 sales with sales in the home market and made no LOT adjustment.

U.S. LOT 1 ( i.e. , POSCO's CEP sales) differed considerably from the home market LOT with respect to selling activities. As noted above, approximately half of the U.S. selling functions, otherwise performed by POSCO, were performed by POSAM. The information on the record demonstrates that the selling activities that POSCO reported for its sales through U.S. channels 1 and 2 ( i.e. , POSCO's CEP sales) differed significantly from its sales through U.S. channel 3 ( i.e. , POSCO's EP sales). In particular, for POSCO's EP sales, POSCO performs all categories of selling functions. However, for POSCO's CEP sales, of the selling functions noted above, POSAM is heavily involved and performs exclusively the following: POSAM negotiates the sales terms, meets with customers, invoices unaffiliated customers, performs market research, handles importation documents, serves as importer of record, pays U.S. customs duties and wharfage, and extends credit for CEP sales. Thus, we found POSCO's U.S. LOT 1 ( i.e. , CEP sales) to be different from the home market LOT and to be at a less advanced LOT than that of the home market LOT. Furthermore, we have no other information on the record that provides an appropriate basis for quantifying the difference in selling functions performed in either market in order to determine an LOT adjustment.

Thus, in accordance with section 773(a)(7)(B) of the Act and as set forth in 19 CFR 351.412(f), a CEP offset will be granted where (1) normal value is compared to CEP sales, (2) normal value is determined at a more advanced LOT than the LOT of the CEP, and (3) despite the fact that the party has cooperated to the best of its ability, the data available do not provide an appropriate basis to determine whether the difference in LOT affects price comparability. Since we have found that to be the case here with respect to POSCO, in accordance with 19 CFR 351.412(f), we are granting POSCO a CEP offset.

Dongbu reported home market sales through two channels of distribution and to two customer categories. We examined the chain of distribution and the selling activities associated with sales reported by Dongbu to each of its customer categories in the home market. The information on the record demonstrates that Dongbu performs virtually the same selling functions across all home market channels of distribution and customer categories.  6 See page A-12 of Dongbu's section A response to the Department's questionnaire, dated December 14, 2001, as well as Dongbu's March 22, 2002 supplemental response at Exhibit A-22. Based on our overall analysis, we found that Dongbu performs virtually the same selling functions with the same intensity for all its customers regardless of the channel of distribution, although there were slight differences between them in terms of the sale process ( i.e. , sales price is determined through: (1) Typical customer/seller negotiation; or (2) via internet auction bidding process). Therefore, we preliminarily determine that Dongbu made home market sales at one LOT during the POI.

In the U.S. market, Dongbu and Dongbu U.S.A. made EP and CEP sales through four channels of distribution and to three customer categories ( i.e. , distributors, service centers, or end users). We examined the chain of distribution and the selling activities associated with sales reported by Dongbu and Dongbu U.S.A. to distributors, service centers, and end users in the U.S. market. The information on the record demonstrates that the selling activities reported by Dongbu through U.S. channels 1 and 2 differed only slightly from U.S. channels 3 and 4. Basically, Dongbu's U.S. channels 1 and 2 involved its U.S. sales affiliate, Dongbu U.S.A. ( i.e. , they are CEP sales), while Dongbu's U.S. channels 3 and 4 did not involve its U.S. sales affiliate, ( i.e. , EP sales). In particular, for Dongbu's EP sales, Dongbu performs all categories of selling functions. However, for Dongbu's CEP sales, of the selling functions performed for U.S. sales, the majority are performed by Dongbu.  7 Thus, based on our overall analysis of the facts currently on the record, we found that Dongbu's four U.S. sales channels constituted a single LOT ( i.e. , U.S. LOT 1 for U.S. channels 1, 2, 3, and 4).

Moreover, we have preliminarily determined that Dongbu's home market and U.S. LOTs are the same because the selling functions that Dongbu provides are nearly the same in each market and do not vary significantly between markets. See Dongbu's March 22, 2002 supplemental response at Exhibit A-22 for further discussion. Thus no LOT adjustment or CEP offset is warranted.

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.

As provided in section 782(i) of the Act, we will verify all information relied upon in making our final determination.

We will make a final determination concerning critical circumstances for Korea when we make our final determination regarding sales at LTFV in this investigation, which will be no later than 75 days (unless postponed) after this preliminary determination.

Based on our preliminary affirmative critical circumstances finding with respect to all imports of subject merchandise, except those produced or exported by Dongbu, we are directing the Customs Service to suspend liquidation of all entries of cold-rolled steel entered, or withdrawn from warehouse, for consumption on or after the date which is 90 days prior to the date on which this notice is published in the Federal Register ( see Critical Circumstances Notice). Furthermore, in accordance with section 733(d)(2) of the Act, we are directing the U.S. Customs Service to suspend liquidation of all imports of subject merchandise by Dongbu 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 EP or CEP, as appropriate, as indicated in the chart below. These suspension-of-liquidation instructions will remain in effect until further notice.

The weighted-average dumping margin are as follows:

We preliminarily determine that certain cold-rolled carbon steel flat products (cold-rolled steel) from New Zealand are being sold, or are likely to be sold, in the United States at less than fair value, as provided in section 733 of the Act. The estimated margin of sales at LTFV is shown in the Suspension of Liquidation section of this notice.

This investigation was initiated on October 18, 2001.  1 See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela , 66 FR 54198 (October 26, 2001) ( Initiation Notice ). Since the initiation of this investigation, the following events have occurred.

On October 31, 2001, we solicited comments from interested parties regarding the criteria to be used for model-matching purposes, and we received comments on our proposed matching criteria on November 8, 2001. On November 8, 2001, we received model match comments from petitioners and respondents. On November 26, 2001, we informed NZS of our revised model match criteria.

On November 13, 2001, the United States International Trade Commission (ITC) preliminarily determined that there is a reasonable indication that an industry in the United States is being materially injured or threatened with material injury by reason of imports from Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela of certain cold-rolled steel products. See Certain Cold-Rolled Steel Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela , 66 FR 57985 (November 19, 2001).

The Department issued an antidumping questionnaire to BHP New Zealand Steel Limited (NZS) on November 19, 2001.  2 During the period December 2001 through March 2002, the Department received responses to the Department's original and supplemental questionnaires.

On February 7, 2002, pursuant to 19 CFR 351.205(e), the petitioners made a timely request to postpone the preliminary determination. On February 22, 2002, the Department published a Federal Register notice postponing the deadline for the preliminary determination until no later than April 26, 2002. ( See Postponement of Preliminary Determinations of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products from Argentina (A-357-816), Australia (A-602-804), Belgium (A-423-811), Brazil (A-351-834), the People's Republic of China (A-570-872), France (A-427-822), Germany (A-428-834), India (A-533-826), Japan (A-588-859), Korea (A-580-848), the Netherlands (A-421-810), New Zealand (A-614-803), Russia (A-821-815), South Africa (A-791-814), Spain (A-469-812), Sweden (A-401-807), Taiwan (A-583-839), Thailand (A-549-819), Turkey (A-489-810) and Venezuela (A-307-822) , 67 FR 8277 (February 22, 2002)).

On March 25, 2002, the petitioners requested that the Department initiate a sales-below-cost investigation of NZS. We did so on April 19, 2002.

The period of investigation (POI) is July 1, 2000, through June 30, 2001. This period corresponds to the four most recent fiscal quarters prior to the month of the filing of the petition ( i.e., September 2001).

Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise. Section 351.210(e)(2) of the Department's regulations requires that exporters requesting postponement of the final determination must also request an extension of the provisional measures referred to in section 733(d) of the Act from a four-month period until not more than six months. We received a request to postpone the final determination from the respondent, NZS, on April 24, 2002. In its request, NZS consented to the extension of provisional measures to no longer than six months.

Since this preliminary determination is affirmative, the request for postponement is made by an exporter that accounts for a significant proportion of exports of the subject merchandise, and there is no compelling reason to deny the respondent's request, we have extended the deadline for issuance of the final determination until the 135th day after the date of publication of this preliminary determination in the Federal Register and have extended provisional measures to no longer than six months.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, as well as a complete discussion of all scope exclusion requests submitted in the context of the on-going cold-rolled steel investigations, please see the “Scope Appendix” attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, published concurrently with this preliminary determination.

Section 777A(c)(1) of the Act directs the Department to calculate individual dumping margins for each known exporter and producer of the subject merchandise. Where it is not practicable to examine all known producer/exporters of subject merchandise, section 777A(c)(2) of the Act permits us to investigate either: (1) A sample of exporters, producers, or types of products that is statistically valid, based on the information available at the time of selection, or (2) exporters and producers accounting for the largest volume of the subject merchandise that can reasonably be examined. Using company-specific export data for the POI, which we obtained from a variety of sources under the Harmonized Tariff Schedules of the United States (HTSUS) numbers that correspond to the subject merchandise, we found that there was one producer/exporter, NZS, who may have exported cold-rolled steel to the United States during the POI. Therefore, we designated NZS as the only mandatory respondent and sent it the Department's antidumping questionnaire.

In accordance with section 776(a) of the Act, we have preliminarily applied partial adverse facts available to NZS for purposes of determining normal value (NV). Given that NZS failed to report the downstream sales for an affiliated reseller as we requested in our original section A questionnaire and supplemental section A questionnaire, we have preliminarily determined that NZS did not act to the best of its ability. Therefore, we have applied partial adverse facts available for sales made by the affiliated reseller, pursuant to section 776(b) of the Act. Due to the proprietary nature of the documentation supporting this issue, for further discussion, see the Memorandum to Faryar Shirzad from Bernard Carreau Re: Use of Facts Available for NZS for the Preliminary Determination in the 2000-2001 Antidumping Duty Investigation of Certain Cold-Rolled Carbon Steel Flat Products from New Zealand, dated April 26, 2002.

As adverse facts available, for each model sold to the affiliated reseller, we have used the highest home-market price of a product NZS sold to unaffiliated customers for the same model during the period of investigation to represent the downstream sales prices made to unaffiliated customers in the home market. ( See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, and the United Kingdom; Preliminary Results of Antidumping Duty Administrative Reviews, Partial Recession of Administrative Reviews, and Notice of Intent To Revoke Orders in Part, 66 FR 8931 (February 5, 2001)).

The facts available methodology used in this preliminary determination assumes that the products sold to the reseller are an appropriate surrogate for those sold by the reseller to the first unaffiliated customer. We note, however, that it appears that the affiliated reseller may engage in further processing of the cold-rolled products it purchases from NZS. Specifically, NZS has stated that the affiliated reseller “further processes the cold rolled coil it purchases by slitting and/or cutting the coils into sheets.”  3 We will continue to evaluate the information available, and, as appropriate, we may reconsider our facts available methodology and selection for the final determination.

To determine whether sales of cold-rolled steel from New Zealand by NZS to the United States were made at LTFV, 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 compared POI weighted-average CEPs to weighted-average NVs.

In accordance with section 771(16) of the Act, we considered all products produced and sold by NZS in the home market during the POI that fit the description in the Scope of Investigation section of this notice 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 respondent in the following order of importance: hardening and tempering; painted; carbon level; quality; yield strength; minimum thickness; thickness tolerance; width; edge finish; form; temper rolling; leveling; annealing; and surface finish.

In accordance with section 772(b) of the Act, we CEP for those sales where the merchandise was sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. In this case, we calculated CEP based on the packed prices charged to the first unaffiliated customer in the United States. We found that all of NZS’ U.S. sales are CEP sales because the merchandise was sold through NZS’ U.S. affiliate, BHP Steel Americas Inc. (BHPSA) in the United States, within the meaning of section 772(b) of the Act. These sales are properly classified as CEP sales because they were made after the date of importation.We made deductions from the starting price, where appropriate, in accordance with section 772(c)(2)(A) of the Act. These deductions included foreign inland freight, international freight, marine insurance, U.S. brokerage and handling and U.S. customs duties (including harbor maintenance fees and merchandise processing fees). In addition, in accordance with section 772(d)(1) of the Act, we deducted from the starting price those selling expenses that were incurred in selling the subject merchandise in the United States, specifically, indirect selling expenses (including inventory carrying costs), credit expense and warranty expense.

For those U.S. sales for which NZS did not report a date of payment, we have used the signature date of the preliminary determination ( i.e., April 26, 2002) in the calculation of imputed credit expenses. In addition, we used NZS’ revised weighted average interest rate, which correctly used the Federal Reserve's weighted-average data for commercial and industrial loans of one-month's to one-year's duration, to calculate credit expense in the U.S. market. 4 For further discussion, see the Memorandum to the File from Tracy Levstik and Salim Bhabhrawala Re: Calculations Performed for NZS for the Preliminary Determination in the 2000-2001 Antidumping Duty Investigation of Certain Cold-Rolled Carbon Steel Flat Products from New Zealand, dated April 26, 2002. Pursuant to section 772(d)(3) of the Act, we further reduced the starting price by an amount for profit to arrive at CEP. In accordance with section 772(f) of the Act, we calculated the CEP profit rate using NZS’ financial statements pursuant to 19 CFR 351.402(d)(2) of the Act.

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 the respondent's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market was viable for the respondent.

Sales to affiliated customers for consumption in the home market which were determined not to be at arm's length were excluded from our analysis. To test whether these sales were made at arm's length, we compared the prices of sales of comparison products to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, discounts, rebates and packing. Pursuant to 19 CFR 351.403(c) and in accordance with our practice, where the prices to the affiliated party were on average less than 99.5 percent of the prices to unaffiliated parties, we determined that the sales made to the affiliated party were not at arm's length. See e.g., Notice of Final Results and Partial Rescission of the Antidumping Duty Administrative Review: Roller Chain, Other Than Bicycle, From Japan, 62 FR at 60472, 60478 (November 10, 1997), and Antidumping Duties; Countervailing Duties: Final Rule (“Antidumping Duties”), 62 FR at 27295, 27355-56 (May 19, 1997). See 19 CFR 351.403; Antidumping Duties, 62 FR at 27355-56. None of NZS’ sales to its affiliated reseller passed the arm's-length test.

On March 25, 2002, the petitioners made a timely sales below cost allegation against NZS. Based on the allegation and in accordance with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to believe or suspect that sales of cold-rolled steel from New Zealand were made at prices below the COP. See the Memorandum to Gary Taverman from the Team Re: The Petitioners' Allegation of Sales Below the Cost of Production for BHP New Zealand Steel Limited (NZS), dated April 19, 2002. As a result, the Department is conducting an investigation to determine whether NZS made sales in the home market at prices below the COP during the POI within the meaning of section 773(b) of the Act. On April 19, 2002, we instructed NZS to complete a section D questionnaire. Given the proximity of the preliminary determination, we did not receive NZS’ section D response in time to analyze it for the preliminary determination, but will do so for the final determination.

We calculated NV based on packed prices to unaffiliated customers or prices to affiliated customers that we determined to be at arm's-length in New Zealand. We adjusted, where applicable, the starting price for discounts and rebates. We made deductions for movement expenses, including inland freight (plant to distribution warehouse and plant/warehouse to customer) and warehousing under section 773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made adjustments for differences in circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) of the Act. No other adjustments to NV were claimed or allowed.

In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, we calculate NV based on sales in the comparison market at the same level of trade (LOT) as the U.S. transaction. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. Id. ; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa , 62 FR 61731, 61732 (November 19, 1997) ( Steel Plate from South Africa ). To determine whether the comparison market sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market (i.e. the chain of distribution), including the selling functions, class of customer (customer category), and the level of selling expenses for each type of sale.

The NV LOT is that of the starting-price sales in the comparison market, or when NV is based on CV, that of the sales from which we derive selling, general and administrative (SG&A) expenses and profit. For EP sales, the U.S. LOT is also the level of the starting-price sale, which is usually from exporter to importer. For CEP transactions, it is the level of the constructed sale from the exporter to the importer. 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. 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 Steel Plate from South Africa.

In implementing these principles in this investigation, we obtained information from NZS about the marketing stages involved in the reported U.S. and home market sales, including a description of the selling activities performed by the respondent for each channel of distribution. Generally, if the reported LOTs are the same, the functions and activities of the seller should be similar. Conversely, if a party reports LOTs that are different for different categories of sales, the functions and activities may be dissimilar.

NZS reported two channels of distribution in the home market, with two customer categories ( i.e., distributors and original equipment manufacturers (OEMs)). The first home market channel of distribution, coded in its submissions as channel 2, included sales made by NZS to unaffiliated home market distributors and OEMs. The second home market channel of distribution, coded in its submissions as channel 3, included sales made by NZS to an affiliated reseller (until October 23, 2000) and to unaffiliated home market OEMs. According to NZS, “there is no difference between channels 2 and 3 * * * (NZS) created channel 3 for the response to show affiliated sales * * * separately.”  5 We compared these two channels of distribution and determined that sales to the two customer categories in both channels were the same in all respects except regarding the determination of sales prices. NZS maintains supply agreements with distributors and uses a set price list and volume rebate structure whereas for its OEM customers, NZS negotiates price and rebates on a sale-specific basis. Due to the fact that these channels are the same with respect to all other selling activities, that is, forecasting and planning services, account management and sales support, product development and marketing support, order processing, managing customer complaints and technical support, and freight, warehousing and delivery services, we preliminarily determine that home market sales in these two channels of distribution constitute a single LOT.

In the U.S. market, all of NZS’ sales are CEP sales. NZS reported that its CEP sales are through one channel of distribution (coded in its submissions as channel 1), that is, they are BHPSA's sales to unaffiliated U.S. customers. The selling activities performed for the channel include forecasting and planning sales (performed by NZS and BHPSA), account management and sales support (performed by NZS and BHPSA), order processing between NZS and BHPSA (performed by NZS and BHPSA), order processing between BHPSA and unaffiliated customers (performed by BHPSA), and managing customer complaints (NZS and BHPSA). We therefore preliminarily conclude that NZS had only one LOT for its CEP sales.

In determining whether separate levels of trade actually existed between CEP sales and home market sales, we examined the chains of distribution, customer categories, and selling functions related to these sales reported in the home market and the United States. In determining LOTs for CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Act. After making CEP deductions from the end user price, we noted that the only difference was related to product development and marketing support services offered only in the home market and not for CEP sales. See section 773(a)(7)(A) of the Act. On this basis, it appears that the LOT of NZS’ home market sales do not involve significantly different selling functions than the LOT of the CEP sales, and that the distinctions do not constitute a difference in LOT between sales in the two markets. Therefore, we preliminarily determine that no LOT adjustment or CEP offset is warranted.

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as obtained from the Federal Reserve Bank (the Department's preferred source for exchange rates).

As provided in section 782(i) of the Act, we will verify all information relied upon in making our final determination.

In accordance with section 733(d) of the Act, we are directing the U.S. Customs Service to suspend liquidation of all entries of certain cold-rolled carbon steel flat products from New Zealand, that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register . We are also instructing 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 below. These instructions suspending liquidation will remain in effect until further notice.

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR Part 351 (2001).

On October 18, 2001, the Department initiated antidumping duty investigations to determine whether imports of cold-rolled steel from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela are being, or are likely to be, sold in the United States at LTFV. See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 2001) (“Initiation Notice”). The petitioners in the concurrent antidumping duty investigations are Bethlehem Steel Corporation, National Steel Corporation, Nucor Corporation, Steel Dynamics, Inc., United States Steel LLC, WCI Steel, Inc., and Weirton Steel Corporation. LTV Steel Company, Inc. is no longer an active petitioner in these investigations. 1

On November 19, 2001, the International Trade Commission (“ITC”) published its determination that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of cold-rolled steel from all of these countries. See Certain Cold-Rolled Carbon Steel Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 57985 (November 19, 2001).

On October 26, 2001, the Department sent letters requesting the quantity and value of shipments of subject merchandise exported to the United States during the period January 1, 2001, through June 30, 2001, to the Embassy of the People's Republic of China, Sichuan Chuaton Changcheng Special Steel Group Co. Ltd., Laiwu Steel Group Ltd., Wuhan Iron and Steel Group Co., Benxi Iron and Steel Co., Shanghai Baosteel Group Corp. (“Baosteel”), and Shanghai Pudong Iron and Steel Group Co., Ltd. On November 8, 2001, Baosteel submitted quantity and value information. We received no other responses to this request.

On November 23, 2001, Pangang Group International Economic & Trading Corp. (“Pangang”) submitted a letter which requested that it be treated as a respondent in this investigation. On November 27, 2001, the Department issued its antidumping questionnaire to the Government of the PRC and issued courtesy copies to the six exporters/producers identified in the petition and to Pangang. The Department only received a response to its questionnaire from Pangang. On December 18, 2001, Baosteel submitted a letter to the Department which stated that it was not going to participate in the instant investigation.

On February 22, 2002, the Department postponed the preliminary determination in this investigation to April 26, 2002. See Postponement of Preliminary Determinations of Antidumping Duty Investigations; Certain Cold-Rolled Carbon Steel Flat Products from Argentina, et al., 67 FR 8227 (February 26, 2002).

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, as well as a complete discussion of all scope exclusion requests submitted in the context of the on-going cold-rolled steel investigations, please see the “Scope Appendix” attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, published concurrently with this preliminary determination.

The period of investigation (“POI”) for this investigation corresponds to the two most recent fiscal quarters prior to the filing of the petition, i.e., January 1, 2001 through June 30, 2001.

On November 29, 2001, and December 7, 2001, four of the petitioners in the investigation (Nucor Corporation, Steel Dynamics Inc., WCI Steel Inc., and Weirton Steel Company) submitted an allegation of critical circumstances with respect to imports of cold-rolled steel from the PRC and requested an expedited decision in the matter. On April 10, 2002, the Department issued its preliminary affirmative determination that critical circumstances exist with respect to imports of cold-rolled steel from the PRC. See Memorandum to Faryar Shirzad from Joseph A. Spetrini: Preliminary Affirmative Determinations of Critical Circumstances (April 10, 2002); and Notice of Preliminary Determinations of Critical Circumstances: Certain Cold-Rolled Carbon Steel Flat Products From Australia, the People's Republic of China, India, the Republic of Korea, the Netherlands, and the Russian Federation, 67 FR 19157 (April 18, 2002) (“Critical Circumstances Notice”).

The Department has treated the PRC as a nonmarket economy (“NME”) country in all past antidumping investigations. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Bulk Aspirin From the People's Republic of China, 65 FR 33805 (May 25, 2000); Notice of Final Determination of Sales at Less Than Fair Value: Certain Non-Frozen Apple Juice Concentrate from the People's Republic of China, 65 FR 19873 (April 13, 2000); Notice of Final Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products from the People's Republic of China, 66 FR 49632 (September 28, 2001) (“Hot-Rolled Steel from the PRC”). This NME designation remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. No party has sought revocation of the NME status in this investigation. Therefore, in accordance with section 771(18)(C) of the Act, we will continue to treat the PRC as a NME country.

When the Department is investigating imports from a NME, section 773(c)(1) of the Act directs us to base the normal value (“NV”) on the NME producer's factors of production, valued in a comparable market economy that is a significant producer of comparable merchandise. The sources of individual factor prices are discussed under the “Normal Value” section, below. Furthermore, no interested party has requested that we treat the cold-rolled steel industry in the PRC as a market-oriented industry and no information has been provided that would lead to such a determination. Therefore, preliminarily we have continued to treat the PRC as a NME.

In a NME proceeding, the Department presumes that all companies within the country are subject to governmental control, and assigns separate rates only if the respondent demonstrates the absence of both de jure and de facto governmental control over export activities. See Notice of Final Determination of Sales at Less Than Fair Value: Bicycles From the People's Republic of China, 61 FR 19026, 19027 (April 30, 1996). Pangang has provided the requested company-specific separate-rates information and has indicated that there is no element of government ownership or control. Based on Pangang's claim, we considered whether it is eligible for a separate rate.

The Department's separate-rate test is unconcerned, in general, with macroeconomic/ border-type controls (e.g., export licenses, quotas, and minimum export prices), particularly if these controls are imposed to prevent dumping. The test focuses, rather, on controls over the investment, pricing, and output decision-making process at the individual firm level. See Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final Determination of Sales at Less than Fair Value, 62 FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 (November 17, 1997); and Honey from the People's Republic of China: Preliminary Determination of Sales at Less than Fair Value, 60 FR 14725, 14726 (March 20, 1995).

To establish whether a firm is sufficiently independent from government control to be entitled to a separate rate, the Department analyzes each exporting entity under a test arising out of the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991), as modified by Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (“Silicon Carbide”). Under the separate-rates criteria, the Department assigns separate rates in NME cases only if the NME respondents can demonstrate the absence of both de jure and de facto governmental control over export activities. See Silicon Carbide and Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from the People's Republic of China, 60 FR 22545 (May 8, 1998).

The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (1) An absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) any other formal measures by the government decentralizing control of companies.

Pangang has placed on the record a number of documents to demonstrate the absence of de jure control, including the “Company Law of the People's Republic of China.” In prior cases, the Department has analyzed this law and found that it establishes an absence of de jure control. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Certain Partial-Extension Steel Drawer Slides with Rollers from the People's Republic of China, 60 FR 54472, 54474 (October 24, 1995). We have no information in this proceeding which would cause us to reconsider this determination.

The Department typically considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by, or subject to, the approval of a governmental authority; (2) whether the respondent has authority to negotiate and sign contracts, and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of its management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses.

As stated in previous cases, there is some evidence that certain enactments of the central government of the PRC have not been implemented uniformly among different sectors and/or jurisdictions in the PRC. See Silicon Carbide. Therefore, the Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.

Pangang asserted the following: (1) There is no government participation in setting export prices; (2) its managers have authority to bind sales contracts; (3) it does not have to notify any government authorities of its management selection, and (4) there are no restrictions on the use of its export revenue and it is responsible for financing it own losses. Additionally, Pangang's questionnaire response does not suggest that pricing is coordinated among exporters. Furthermore, our analysis of Pangang's questionnaire response reveals no other information indicating government control. Therefore, based on the information provided, we preliminarily determine that there is an absence of de facto governmental control of Pangang's export functions. Consequently, we preliminarily determine that the respondent has met the criteria for the application of a separate rate.

In NME cases, it is the Department's policy to assume that all exporters located in the NME comprise a single exporter under common control, the “NME entity.” This presumption can be rebutted. The Department assigns a single NME rate to the NME entity unless an exporter can demonstrate eligibility for a separate rate. All exporters were given the opportunity to respond to the Department's questionnaire. As explained above, we received a timely Section A response from Pangang. Our review of U.S. import statistics, however, reveals that Pangang did not account for all imports of subject merchandise into the United States from the PRC. One producer/exporter of the subject merchandise, Baosteel, reported quantity and value information, but later submitted a letter to the Department announcing its intent not to participate in the investigation. We received no responses from other exporters to whom we sent requests for information. For this reason, we preliminarily determine that the majority of PRC exporters of cold-rolled steel failed to respond to our questionnaire. Consequently, we are applying adverse facts available (see below) to determine the single antidumping rate—the PRC-wide rate—applicable to all other exporters in the PRC based on our presumption that those respondents who failed to demonstrate entitlement to a separate rate constitute a single enterprise under common control by the PRC government. See, e.g., Final Determination of Sales at Less Than Fair Value: Synthetic Indigo from the People's Republic of China, 65 FR 25706, 25707 (May 3, 2000). The PRC-wide rate applies to all entries of subject merchandise except for entries from Pangang.

Section 776(a)(2) of the Act provides that, if an interested party withholds information that has been requested by the Department, fails to provide such information in a timely manner or in the form or manner requested, significantly impedes a proceeding under the antidumping statute, or provides information which cannot be verified, the Department shall use, subject to sections 782(d) and (e) of the Act, facts otherwise available in reaching the applicable determination. As explained above, the majority of exporters of the subject merchandise failed to respond to the Department's request for information. The failure of theses exporters to respond also significantly impede this proceeding. Pursuant to section 776(a) of the Act, in reaching our preliminary determination, we have used total facts available for the PRC-wide rate because these entities did not respond.

In addition, section 776(b) of the Act provides that, if the Department finds that an interested party “has failed to cooperate by not acting to the best of its ability to comply with a request for information,” the Department may use information that is adverse to the interests of that party as facts otherwise available. Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action (“SAA”) accompanying the URAA, H.R. Doc. No. 316, 103d Cong., 2d Session at 870 (1994). Furthermore, “affirmative evidence of bad faith on the part of the respondent is not required before the Department may make an adverse inference.” See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27340 (May 19, 1997). The complete failure of these exporters to respond to the Department's requests for information constitutes a failure to cooperate to the best of their ability. In regard to Baosteel, though the company initially provided quantity and value information, the company subsequently indicated in a December 18, 2001 letter to the Department that it would not participate in the investigation. This conduct constitutes a failure of Baosteel to cooperate to the best of its ability. Therefore, pursuant to section 776(b) of the Act, the Department preliminarily finds that, in selecting from among the facts available, an adverse inference is appropriate.

An adverse inference may include reliance on information derived from the petition, the final determination in the investigation, any previous review, or any other information placed on the record. See section 776(b) of the Act. However, section 776(c) provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation or review, the Department shall, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The SAA states that the independent sources may include published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation or review. See SAA at 870. The SAA clarifies that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value. Id. As noted in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.

For our preliminary determination, as adverse facts available, we have used the highest rate calculated for a respondent, i.e. , the rate calculated for Pangang. In an investigation, if the Department chooses as facts available a calculated dumping margin of another respondent, the Department will consider information reasonably at its disposal as to whether there are circumstances that would indicate that using that rate is appropriate. Where circumstances indicate that the selected margin may not be appropriate, the Department will attempt to find a more appropriate basis for facts available. See, e.g., Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty Administrative Review , 61 FR 6812, 6814 (February 22, 1996) (the Department disregarded the highest margin as adverse best information available because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin). In this investigation, there is no indication that Pangang's calculated margin is inappropriate to use as adverse facts available.

Accordingly, for the preliminary determination, the PRC-wide rate is 129.85 percent. Because this is a preliminary margin, the Department will consider all margins on the record at the time of the final determination for the purpose of determining the most appropriate final PRC-wide margin.

To determine whether sales of cold-rolled steel to the United States by Pangang were made at less than fair value, we compared export price (“EP”) to NV, as described in the “Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs. We calculated weighted-average NVs.

In accordance with section 772(a) of the Act, we used EP because the subject merchandise was sold directly to unaffiliated purchasers outside of the United States, with the knowledge that the final destination of the subject merchandise was the United States. Pangang claimed that sales to the United States went through either of two channels of trade. In the first channel, Pangang sold directly to the unaffiliated U.S. importer. In the second channel, Pangang sold through another unaffiliated party to the U.S. importer. Pangang claims that in the second channel, the U.S. importer pays the other party, who then pays Pangang. For both channels of trade, we used the price of Pangang's first sale to an unaffiliated party in, or for exportation to, the United States. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs to the NVs. We calculated EP based on prices to unaffiliated purchasers in the United States. We made deductions, where appropriate, for foreign inland freight and brokerage and handling. Because certain domestic charges, such as those for foreign inland freight and brokerage and handling, were provided by NME companies, we valued those charges based on surrogate rates from India. See the Factors-of-Production Valuation Memorandum to Edward Yang through James Doyle from Carrie Blozy and Stephen Shin, dated April 26, 2002 (“FOP Memorandum”).

When the Department is investigating imports from a NME country, section 773(c)(1) of the Act directs it to base NV, in most circumstances, on the NME producer's factors of production, valued in a surrogate market-economy country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, the Department, in valuing the factors of production, shall utilize, to the extent possible, the prices or costs of factors of production in one or more market-economy countries that are at a level of economic development comparable to the NME country and are significant producers of comparable merchandise. The sources of the surrogate factor values are discussed under the NV section below.

The Department has determined that India, Pakistan, Indonesia, Sri Lanka and the Philippines are countries comparable to the PRC in terms of economic development. See Memorandum from Jeffrey May to James Doyle, dated December 12, 2001. Customarily, we select an appropriate surrogate based on the availability and reliability of data from these countries. For PRC cases, the primary surrogate has often been India if it is a significant producer of comparable merchandise. In this case, we have found that India is a significant producer of comparable merchandise. We used India as the primary surrogate country and, accordingly, we have calculated NV using Indian prices to value the PRC producer's factors of production, when available and appropriate. We have obtained and relied upon publicly available information wherever possible. See FOP Memorandum. In accordance with 19 CFR 351.301(c)(3)(i), for the final determination in this antidumping investigation, interested parties may submit publicly available information to value the factors of production within 40 days after the date of publication of this preliminary determination.

Section 773(c)(1) of the Act provides that the Department shall determine the NV using a factors-of-production methodology if: (1) The merchandise is exported from a NME country; and (2) the information does not permit the calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. Factors of production include: (1) Hours of labor required; (2) quantities of raw materials employed; (3) amounts of energy and other utilities consumed; and (4) representative capital costs. See 773(c) of the Act. We used factors of production, reported by Pangang, for materials, energy, labor, by-products, and packing. We valued all the input factors using publicly available published information, as discussed in the “Surrogate Country” and “Factor Valuations” sections of this notice. In accordance with 19 CFR 351.408(c)(1), when a producer sources an input from a market economy and pays for it in market-economy currency, the Department employs the actual price paid for the input to calculate the factors-based NV. See also Lasko Metal Products v. United States, 437 F.3d 1442, 1445-1446 (Fed. Cir. 1994) (“Lasko”). Therefore, when Pangang had market-economy inputs and paid for these inputs in a market-economy currency, we used the actual prices paid for those inputs in our calculations.

In accordance with section 773(c) of the Act, we calculated NV based on factors of production reported by Pangang for the POI. To calculate NV, the reported per-unit factor quantities were multiplied by publicly available Indian surrogate values (except as noted below). In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we adjusted imported input prices by including freight costs to make them delivered prices. For a detailed description of all surrogate values used for the respondent, see FOP Memorandum.

We added to Indian import surrogate values a surrogate freight cost using the shorter of (a) the reported distance from the domestic supplier to the factory, or (b) the distance from the nearest seaport to the factory. This adjustment is in accordance with the decision in Sigma Corporation v. United States, 117 F. 3d 1401, 1407-08 (Fed. Cir. 1997).

For those Indian Rupee values not contemporaneous with the POI, we adjusted for inflation using wholesale price indices published in the International Monetary Fund's International Financial Statistics for India. For those U.S. dollar-denominated values not contemporaneous with the POI, we adjusted for inflation using producer price indices published in the International Monetary Fund's International Financial Statistics for the United States.

Although surrogate-value data based on Monthly Trade Statistics of Foreign Trade of India —Volume II—Imports (“Indian Import Statistics”) were provided by Pangang, we relied on more contemporaneous Indian Import Statistics (time period: April 2000 through March 2001), where available. Except as noted below, we valued raw-material inputs using the weighted-average unit import values derived from the Indian Import Statistics. When Indian Import Statistics from a contemporaneous period were not available, we used Indian Import Statistics from an earlier period.

Pangang reported that it self-produced all of its own electricity as well as the industrial gases argon, nitrogen and oxygen, which are used in the manufacture of the subject merchandise. In the antidumping investigation of hot-rolled carbon steel flat products from the PRC, the Department valued certain self-produced energy components (electricity, argon, oxygen, and nitrogen) through surrogate valuation as a finished product, rather than valuing the inputs consumed in generating each individual energy component. This was based on the fact that the financial statement of the sole surrogate company indicated that the surrogate company purchased a large portion of the inputs in question and did not appear to self-produce any of the inputs. Therefore, the valuation of the inputs consumed in generating each individual energy component would lead to mathematically incorrect results. See Hot-Rolled Steel from the PRC and accompanying Issues and Decision Memorandum at Comment 2. The Department has followed the approach established in Hot-Rolled Steel from the PRC regarding the valuation of certain self-produced energy inputs.

In its April 10, 2002, submission, Pangang argued that each of the inputs used for producing electricity, argon, nitrogen, and oxygen must be valued separately to reflect the actual production process of the subject merchandise. Pangang maintained that valuation of the finished self-produced input will significantly overstate the cost of producing the input as many of the inputs into the self-produced input are by-products or surplus inputs. Finally, Pangang argued that the reasons for using surrogate valuation to value electricity, argon, nitrogen, and oxygen in Hot-Rolled Steel from the PRC and structural steel beams from the PRC (see Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Structural Steel Beams From The People's Republic of China, 66 FR 67197, 67201 (December 28, 2001) (“Structural Steel Beams from the PRC”)) do not apply in the present case. Pangang stated that because its power facilities were established decades ago, Pangang has not experienced large capital costs associated with its energy production during the POI. Pangang also asserted that to reject the use of its factors of production would amount to facts available.

In this case, as explained below, to value overhead, selling general and administrative (“SG&A”), interest, and profit, we are relying on the 2000-2001 financial statements of Steel Authority of India Limited (“SAIL”) and TATA Steel (“TATA”), both of whom are Indian integrated steel producers of cold-rolled steel. The financial statements of both companies do not indicate that either self-produce argon, nitrogen, and oxygen. However, they do indicate that during the 2000-2001 financial year SAIL and TATA self-produced approximately 60 and 54 percent, respectively, of the electricity they consumed. See SAIL's financial statements at page 53 (Form A), which is attached to the FOP memorandum at Exhibit 7, and TATA's financial statements at page 14 (Form A), which is attached to petitioners' April 9, 2002, submission at Exhibit 2. For purposes of the preliminary determination we are continuing to follow our practice in Hot-Rolled Steel from the PRC and Structural Steel Beams from the PRC, and are valuing self-produced electricity, argon, nitrogen, and oxygen as finished-products, rather than valuing factor inputs going into the production of these inputs. Although the record evidence indicates that SAIL and TATA self-produced 60 and 54 percent, respectively, of their electricity, we find that potential distortion exists as Pangang self-produces all of its electricity as well as its argon, nitrogen, and oxygen. As we explained in Structural Steel Beams from the PRC, “the respondent's methodology would add needless complications to our calculation of NV and lead to potentially erroneous results.”

As the basis for valuing electricity, we have relied on the 1997 data published in the International Energy Agency's publication, Energy Prices and Taxes, Third Quarter, 2000 , and adjusted the amount for inflation. As the basis for valuing argon, nitrogen, and oxygen, we have relied on October 1996 price information from Bhoruka Gases Limited, an Indian manufacturer of industrial gases, and adjusted the amount for inflation.

Pangang reported that it purchased iron ore fines and lumps from market-economy suppliers during the POI. The Department used the weighted-average price reported by Pangang.

We valued all inputs for packing using the average-unit values derived from the Indian Import Statistics.

We used Indian transport information to value transport for raw materials. For all instances in which respondent reported delivery by truck, to calculate domestic inland freight (truck), we used a price quote obtained by the Department from an Indian trucking company for transporting materials between Mumbai and Coimbatore (1265 kilometers). We converted the Indian Rupee value to U.S. dollars and adjusted for inflation through the POI. Similarly, for domestic inland freight (rail), we used a freight rate as quoted from Indian Railway Conference Association price lists.

To value factory overhead, SG&A expenses, interest, and profit, we used financial ratios based on 2000-2001 financial information from two Indian integrated steel producers of cold-rolled steel, SAIL and TATA. In their March 26, 2001, surrogate value submission, Pangang argued that the Department should determine overhead, SG&A, and profit based on data from the Reserve Bank of India, which represents financial data from 947 private limited companies from the Indian metals and chemical industries. Pangang claimed that the Department should rely on the Reserve Bank data because the financial statistics of a single company will not approximate the experience of Pangang in this case as Pangang is a member of the fully integrated group of companies, which not only produces the subject merchandise, but also produces and sells a range of other chemical and steel products and provides services. In their April 9, 2002, surrogate value submission, petitioners argued that the Department should rely on the most contemporaneous information available for TATA. In the investigation of cut-to-length carbon steel plate from the PRC, the Department determined not to use data from the Reserve Bank of India, explaining, “it is the Department's preference to base SG&A and profit ratios on data from actual producers of subject merchandise in the surrogate country.” See Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from the People's Republic of China, 62 FR 61964, 61969, 61970 (November 20, 1997). In their April 18, 2002 submission, the respondent argued that because TATA undertook significant capital investments during the fiscal 2000-2001 year, TATA's financial ratios are not indicative of Pangang's experience. Therefore, Pangang argued that the Department should disregard TATA's financial data.

In addition to the two potential surrogates the parties placed on the record (i.e., TATA and the Reserve Bank of Indian data), the Department located another surrogate, SAIL , and placed its financial information on the record as well. Thus, we have on the record of the investigation financial statements of two Indian producers of cold-rolled steel (i.e., SAIL and TATA). Moreover, like Pangang, both SAIL and TATA are integrated steel producers that are members of a group of companies which produce products in addition to producing the subject merchandise. See FOP Memorandum for a copy of the 2000-2001 financial information for the companies included within the SAIL and TATA Steel Groups. Because the Department prefers to base financial ratios on multiple producers from a contemporaneous period, the Department has calculated a simple average of the financial ratios of SAIL and TATA. See Brake Rotors From the People's Republic of China: Preliminary Results of Third New Shipper Review and Preliminary Results and Partial Rescission of Second Antidumping Duty Administrative Review, 64 FR 73007, 73011 (December 29, 1999). As in Hot-Rolled Steel from the PRC, we used information from TATA from profit. See the Hot-Rolled Factors-of-Production Valuation Memorandum to Edward Yang through James Doyle from Carrie Blozy, Catherine Bertrand and Doreen Chen, dated September 28, 2001.

For labor, consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate at the Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in September 2001 (see http://ia.ita.doc.gov/wages ). The source of the wage rate data on the Import Administration's web site is the 2000 Year Book of Labour Statistics, International Labor Organization (Geneva: 2000), Chapter 5B: Wages in Manufacturing.

For the by-products, steel slag and iron slag, we used U.S. domestic prices as surrogate values. In previous cases, the Department has determined not to value slag based on Indian Import Statistics because we found that the Indian import values were unusually high compared to the price of the subject merchandise. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products From the People's Republic of China, 66 FR 22183, 22191 (May 3, 2001) (“Hot-Rolled from the PRC Prelim”); Hot-Rolled Steel from the PRC; and Structural Steel Beams from the PRC. Consistent with these prior determinations, for purposes of the preliminary determination, the Department is valuing steel slag and iron slag based on values for slag from the U.S. Geological Survey Minerals, Commodities Summaries from 1998. We adjusted the value for inflation using the U.S. producer price index.

To value the by-products coke oven gas and steam, we: (1) Noted the BTU equivalent of coke oven gas or steam; (2) obtained a ratio of coke oven gas or steam to the BTU equivalent of natural gas; and (3) multiplied this ratio by the surrogate value of natural gas, which was taken from the 1999 financial report of EOG Resources, Inc. This natural gas value was also used in the investigation of hot-rolled steel from the PRC. See Hot Rolled Steel from the PRC Prelim.

We are not granting offsets for the recoveries of hot-rolled steel products and cold-rolled steel products for purposes of the preliminary determination. In its March 12, 2002, supplemental questionnaire response, Pangang explained that inferior steel products, which include hot-rolled and cold-rolled products, “are those steels in good steel quality but which sizes do not meet client needs.” We find that inferior hot-rolled and cold-rolled steel products represent sales of non-prime or secondary finished product and hence cannot be classified as by-products as they are more properly considered home market sales of hot-rolled and cold-rolled steel.

We will make a final determination concerning critical circumstances for the PRC when we make our final determination regarding sales at LTFV in this investigation, which, unless postponed, will be no later than 75 days after the publication of this notice in the Federal Register .

Because of our preliminary affirmative critical circumstances finding, we are directing Customs to suspend liquidation of all entries of cold-rolled steel from the PRC entered, or withdrawn from warehouse, for consumption on or after 90 days prior to the date on which this notice is published in the Federal Register . See Critical Circumstances Notice. We are instructing Customs to require a cash deposit or the posting of a bond equal to the estimated preliminary dumping margin, as indicated in the chart below. These instructions suspending liquidation will remain in effect until further notice.

We determine that the following percentage weighted-average margins exist for the POI:

The PRC-wide rate applies to all entries of the subject merchandise except for entries from exporters/manufacturers that are identified individually above.

In accordance with section 733(f) of the Act, we have notified the ITC of our preliminary 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 imports of cold-rolled steel from the PRC are materially injuring, or threaten material injury to, the U.S. industry.

Case briefs or other written comments must be submitted to the Assistant Secretary for Import Administration no later than 50 days after the date of publication of this notice, and rebuttal briefs no later than 55 days after the date of publication of this notice. Rebuttal briefs must be limited to the issues raised in the case briefs. 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 fifty-seven days after publication of this notice, at the U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing 48 hours before the scheduled date.

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 date of 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. At the hearing, oral presentations will be limited to issues raised in the briefs. See 19 CFR 351.310(c). We will make our final determination, unless postponed, no later than 75 days after this preliminary determination.

This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act.

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 C.F.R. Part 351 (2001).

On October 18, 2001, the Department initiated antidumping duty investigations to determine whether imports of cold-rolled steel from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela are being, or are likely to be, sold in the United States at LTFV. See Notice of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 2001) (“Initiation Notice”). The petitioners in this investigation are Bethlehem Steel Corporation, LTV Steel Company, Inc., National Steel Corporation, Nucor Corporation, Steel Dynamics, Inc., United States Steel Corporation, WCI Steel, Inc., and Weirton Steel Corporation (“Petitioners”). 1

On November 13, 2001, the International Trade Commission (“ITC”) preliminarily determined that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of cold-rolled steel from all of these countries. See Certain Cold-Rolled Carbon Steel Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 57985 (November 19, 2001).

On November 23, 2001, the Department issued its respondent selection memorandum, selecting JSC Severstal (“Severstal”) as the sole mandatory respondent to be investigated. See Memorandum from James C. Doyle to Edward C. Yang: Selection of Respondents, at 2 (November 23, 2001) (“Respondent Selection Memo”). On November 27, 2001, the Department issued its antidumping questionnaire to Severstal and to the Government of the Russian Federation (“GOR”). The Department received no responses to the questionnaire. See Memorandum to The File from Juanita H. Chen: Failure of Respondent JSC Severstal to Respond to Questionnaire (February 4, 2002) (“Failure to Respond Memo”).

On February 7, 2002, three of the petitioners requested that the Department postpone the preliminary determination by fifty days. See Letter to the Department from Bethlehem Steel Corporation, National Steel Corp., and United States Steel Corporation (February 7, 2002). On February 22, 2002, the Department postponed the preliminary determination in this investigation to April 26, 2002. See Postponement of Preliminary Determinations of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, et al., 67 FR 8227 (February 22, 2002).

On March 15, 2002, petitioners submitted a letter requesting that the Department apply a dumping margin based on total adverse facts available for Severstal. Petitioners argue that because Severstal failed to timely provide the information requested by the Department, as adverse facts available, the Department should apply the highest calculated dumping margin of 332.59 percent from the antidumping petition or, in the alternative, apply the highest dumping margin of 137.33 percent from the notice of initiation.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, as well as a complete discussion of all scope exclusion requests submitted in the context of the on-going cold-rolled steel investigations, please see the “Scope Appendix” attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, published concurrently with this preliminary determination.

The period of investigation (“POI”) is January 1, 2001 through June 30, 2001. This period corresponds to the two most recent fiscal quarters prior to the filing of the petition ( i.e. , September 2001).

On November 29, 2001 and December 7, 2001, four of the petitioners in the investigation (Nucor Corporation, Steel Dynamics, Inc., WCI Steel, Inc., and Weirton Steel Company) submitted an allegation of critical circumstances with respect to imports of cold-rolled steel from Russia and requested an expedited decision in the matter. On April 10, 2002, the Department issued its preliminary affirmative determination that critical circumstances exist with respect to imports of cold-rolled steel from Russia. See Memorandum to Faryar Shirzad from Joseph A. Spetrini: Preliminary Affirmative Determinations of Critical Circumstances (April 10, 2002); and Notice of Preliminary Determinations of Critical Circumstances: Certain Cold-Rolled Carbon Steel Flat Products From Australia, the People's Republic of China, India, the Republic of Korea, the Netherlands, and the Russian Federation , 67 FR 19157 (April 18, 2002) (“Critical Circumstances Notice”).

The Department has treated Russia as a nonmarket economy (“NME”) country in all past antidumping investigations. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value; Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation , 65 FR 42669 (July 11, 2000); Notice of Final Determination of Sales at Less Than Fair Value : Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation , 64 FR 38626 (July 19, 1999); Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from the Russian Federation , 62 FR 61787. This NME designation remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. No party has sought revocation of the NME status in this investigation. 2 Therefore, in accordance with section 771(1)(C) of the Act, we will continue to treat Russia as a NME country.

In a NME proceeding, the Department presumes that all companies within the country are subject to governmental control, and assigns separate rates only if the respondent demonstrates the absence of both de jure and de facto governmental control over export activities. See Notice of Final Determination of Sales at Less Than Fair Value: Bicycles From the People's Republic of China , 61 FR 19026, 19027 (April 30, 1996). As no party requested that it be assigned a separate rate in this investigation, there was no demonstration of eligibility for a separate rate under the separate rates criteria. Accordingly, we preliminarily determine all exporters are subject to the Russia-wide rate.

Section 776(a)(2) of the Act provides that, if an interested party (A) withholds information requested by the Department, (B) fails to provide such information by the deadline for submission of the information, or in the form and manner requested, (C) significantly impedes a proceeding under the antidumping statute, or (D) provides information that cannot be verified, the Department shall use, subject to sections 782(d) of the Act, facts otherwise available in reaching the applicable determination.

Pursuant to section 782(e) of the Act, the Department shall not decline to consider submitted information if all of the following requirements are met: (1) the information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

Given the extent to which Severstal exported cold-rolled steel from Russia during the POI, Severstal was designated as the sole mandatory respondent in the investigation. See Respondent Selection Memo, at 4. However, both Severstal and the GOR failed to submit any response to the Department's questionnaire. As noted in the Failure to Respond Memo , Severstal indicated that it did not plan to respond to the Department's NME antidumping questionnaire, with the understanding that the Department would apply facts available methodology. Without a response from Severstal to the Department's antidumping questionnaire, we have no foundation for determining a margin. Thus, the Department has applied facts available (“FA”), in accordance with section 776(a)(2) of the Act, in making our preliminary antidumping determination.

In selecting from among the facts otherwise available, section 776(b) of the Act provides that if the Department finds the respondent “has failed to cooperate by not acting to the best of its ability to comply with a request for information * * * {the Department} may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available.” See, e.g., Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty Administrative Review, 62 FR 53808, 53819-20 (October 16, 1997). Severstal did not attempt to respond to the Department's questionnaire, but stated outright its intention of not responding to the questionnaire at all. See Failure to Respond Memo. As a general matter, it is reasonable for the Department to assume that Severstal possessed the records necessary for this investigation, and that by not supplying any information requested by the Department, Severstal failed to cooperate to the best of its ability. Because the Department has determined Severstal failed to cooperate to the best of its ability, we are applying an adverse inference pursuant to section 776(b) of the Act. As adverse FA, we have applied the margin from initiation (i.e., the highest margin based on the amended petition), which is 137.33 percent, as the Russia-wide rate. See AD Initiation Checklist (October 18, 2001) (“Initiation Checklist” ). Pursuant to section 776(c) of the Act, the Department has corroborated the 137.33 percent margin from initiation to the extent practicable. See Total Facts Available Corroboration Memorandum (April 26, 2002). This Russia-wide rate applies to all entries of subject merchandise.

We will make a final determination concerning critical circumstances for Russia when we make our final determination regarding sales at LTFV in this investigation, which will be no later than 75 days after the publication of this notice in the Federal Register .

Because of our preliminary affirmative critical circumstances finding, we are directing Customs to suspend liquidation of all entries of cold-rolled steel from Russia entered, or withdrawn from warehouse, for consumption on or after 90 days prior to the date on which this notice is published in the Federal Register , in accordance with section 733(e) of the Act. See Critical Circumstances Notice. We are also instructing Customs to require a cash deposit or the posting of a bond equal to the preliminary dumping margin, as indicated in the chart below. These instructions suspending liquidation will remain in effect until further notice.

We determine that the following percentage weighted-average margin exists for the POI:

The Russia-wide rate applies to all entries of the subject merchandise.

In accordance with section 733(f) of the Act, we have notified the ITC of our preliminary 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 the date of our final determination whether imports of cold-rolled steel from Russia are materially injuring, or threaten material injury to, the U.S. industry.

Case briefs or other written comments must be submitted to the Assistant Secretary for Import Administration no later than 50 days after the date of publication of this notice, and rebuttal briefs no later than five business days after the deadline for submission of case briefs. Rebuttal briefs must be limited to the issues raised in the case briefs. 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 two days after the deadline for submission of the rebuttal briefs, at the U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing 48 hours before the scheduled date.

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 date of 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. At the hearing, oral presentations will be limited to issues raised in the briefs. See 19 CFR 351.310(c). If this investigation proceeds normally, we will make our final determination no later than 75 days after this preliminary determination.

This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act.

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department of Commerce (“Department's”) regulations are to the regulations codified at 19 CFR part 351 (April 2001).

Since the initiation of this investigation ( Initiation of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey and Venezuela, 66 FR 54198 (October 26, 2001) (“ Initiation Notice ”)), the following events have occurred.

On November 13, 2001, the United States International Trade Commission (“ITC”) preliminarily determined that there is a reasonable indication that imports of certain cold-rolled steel products from South Africa are materially injuring the United States industry ( see Certain Cold-Rolled Steel Products From Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey and Venezuela, (66 FR 57985 (November 19, 2001)).

On December 5, 2001, we selected the largest producer/exporter of cold-rolled steel from South Africa as a mandatory respondent in this proceeding. For further discussion, see the Memorandum to Laurie Parkhill, Director Office 3, from The Team regarding Selection of Respondents dated December 5, 2001. We issued the antidumping questionnaire to Iscor Limited (“Iscor”) on December 5, 2001.

On December 7, 2001, the petitioners  1 alleged that there is a reasonable basis to believe or suspect critical circumstances exist with respect to the antidumping investigations of cold-rolled carbon steel flat products from Argentina, Australia, China, India, the Netherlands, Russia, South Africa, South Korea, and Taiwan. On December 14, 2001, the petitioners supplemented their December 7, 2001, submission with additional information.

During the period January through April 2002, the Department received from Iscor responses to sections A, B, and C of the Department's original and supplemental questionnaires.

On February 7, 2002, pursuant to 19 CFR 351.205(e), the petitioners made a timely request to postpone the preliminary determination. We granted this request on February 14, 2002, and postponed the preliminary determination until no later than April 26, 2002 ( Postponement of Preliminary Determinations of Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey and Venezuela, 67 FR 8227 (February 22, 2002)).

In accordance with 19 CFR 351.206(c)(2)(i), because petitioners submitted the critical circumstances allegation more than twenty days before the scheduled date of the preliminary determination, the Department must issue the preliminary critical circumstances determination not later than the date of the preliminary determination. A full discussion of our analysis may be found in the critical circumstances section of this notice and in the critical circumstances memorandum from Richard W. Moreland to Faryar Shirzad, dated April 26, 2002 ( Preliminary Negative Determinations of Critical Circumstances—South Africa ). A public version of this memorandum is on file at the Import Administration Central Records Unit, in Room B-099 of the Department of Commerce Building.

Pursuant to section 735(a)(2) of the Act, on April 23, 2002, Iscor requested that, in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination until not later than 135 days after the date of the publication of the preliminary determination in the Federal Register and extend the provisional measures to not more than six months. In accordance with 19 CFR 351.210(b)(2)(ii) and (e), because (1) our preliminary determination is affirmative, (2) Iscor accounts for a significant proportion of exports of the subject merchandise, and (3) no compelling reasons for denial exist, we are granting the respondent's request and are postponing the final determination until no later than 135 days after the publication of this notice in the Federal Register . Suspension of liquidation will be extended accordingly.

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. For a full description of the scope of this investigation, please see the Scope Appendix attached to the Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination and Preliminary Negative Determination of Critical Circumstances: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, published concurrently with this preliminary determination.

The period of investigation (“POI”) is July 1, 2000, through June 30, 2001.

To determine whether sales of cold-rolled steel from South Africa to the United States were made at less than fair value (“LTFV”), 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 compared POI weighted-average CEPs to POI weighted-average NVs.

In accordance with section 771(16) of the Act, we considered all products produced and sold by the respondent in the home market during the POI that fit the description in the “Scope of Investigation” section of this notice to be foreign like products for purposes of determining appropriate product comparisons for U.S. sales. We compared U.S. sales to sales of identical merchandise made in the home market. 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: hardening and tempering, painted, carbon level, quality, yield strength, minimum thickness, thickness tolerance, width, edge finish, form, temper rolling, leveling, annealing, and surface finish.

For this preliminary determination, we did not use certain home-market sales reported by Iscor because it did not indicate the quality or yield strength for the products involved in these transactions and reported zero in the quality and yield strength fields. As a result, in the product-comparison portion of the margin program we generated missing values. In its April 8, 2002, supplemental response at pages 11 and 12, Iscor stated that it reported zero because for some orders customers did not specify a quality or yield strength for the merchandise ordered and Iscor did not keep a record of this information. We intend to examine this matter in detail at verification.

In accordance with section 772(b) of the Act, we calculated CEP for all sales to the United States because Iscor sells all the merchandise under investigation to the United States through an affiliated company in the United States, MacSteel International USA Corp.

We based CEP on the FOB prices to unaffiliated purchasers in the United States. We made adjustments for billing adjustments. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act; these deductions included, where appropriate, domestic inland freight ( i.e., inland freight expense from plant/warehouse to port of exit), ocean freight, marine insurance, U.S. brokerage and handling, U.S. customs duties, U.S. wharfage fees, U.S. survey fees, U.S. inland freight expenses ( i.e., freight from port to warehouse), and warehousing expenses. In accordance with section 772(d)(1) of the Act and 19 CFR 351.402(b), we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses ( e.g., imputed credit costs) and indirect selling expenses ( e.g., inventory carrying costs).

Pursuant to section 772(d)(3) of the Act, we further reduced the starting price by an amount for profit to arrive at CEP. In accordance with section 772(f) of the Act, we calculated the CEP profit rate using the expenses incurred by Iscor and its affiliate on their sales of the subject merchandise in the United States and the foreign like product in the home market and the profit associated with those sales. See Preliminary Determination Analysis Memorandum for Iscor .

We used Iscor's reported constructed value (CV) data to calculate the CEP profit amount. In our original questionnaire dated December 5, 2001, we requested that Iscor respond to the CV portion of section D with respect to products or models sold in the United States for which it had no sales of comparable merchandise in the home or third-country market. As Iscor did not respond to the CV section of the section D, we repeated the request in a supplemental questionnaire. In response to the supplemental questionnaire, Iscor provided a response to the CV portion of the section D questionnaire. Because CV data was on the record and it is the Department's normal practice to use CV data to calculate the CEP profit amount when it is available, we used this data to calculate the CEP profit amount. By using CV data we are able to calculate a profit amount which is more specific to the merchandise under investigation than relying on a profit amount derived from the financial statements which could cover a broader range of merchandise. In using Iscor's CV data, we found that Iscor did not provide CV data for all of its U.S. products. Therefore, for this preliminary determination, and pursuant to section 776(a) of the Act, as facts available, we extracted the cost information available in the U.S. database and information provided in the CV portion of section D response to derive the CV for these sales. Prior to our final determination, we will require Iscor to provide the CV data for the products for which we currently have no CV data so that we can include this data in our calculations for the final determination.

For this preliminary determination we have not included certain expense amounts reported in the U.S. miscellaneous-expense field. In its section C questionnaire response Iscor reported certain expense amounts in the U.S. miscellaneous-expenses field. However, it did not clearly identify the nature of these expenses. In its response to our supplemental questionnaire, Iscor stated that this field is primarily comprised of brokerage fees. However, it did not provide an adequate explanation for the negative amounts reported in this field. Since Iscor did not demonstrate that it was entitled to receive this upward adjustment to U.S. price ( i.e., deducting the negative numbers reported in movement expense resulted in an increase in U.S. price for certain transactions) for this preliminary determination, we did not use the negative amounts reported in this field. However, because Iscor provided adequate information with regard to the positive values reported in this field, we used the positive amounts reported in this field. See Preliminary Determination Analysis Memorandum for Iscor .

On December 21, 2001, Iscor requested that the Department permit it to exclude from its response to the questionnaire an insignificant quantity of sales which its U.S. affiliate sold to its affiliated customer in the U.S. market as well as that affiliated customer's sales to its unaffiliated customers. The affiliated customer added value to some of the merchandise prior to resale. Iscor stated that providing sales and further-manufacturing data for such an insignificant quantity of sales would be disproportionately burdensome without having any meaningful effect on the calculation of the dumping margin. Consistent with our past practice, because the volume of these sales was small and would have a negligible impact upon the margin calculation, we granted Iscor's request. See Preliminary Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Japan , 64 FR 8291, 8295 (February 19, 1999) (unchanged in the final determination). In our letter granting the request, however, we informed Iscor that this assertion is subject to verification.

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 and 19 CFR 351.405(2). Because the respondent's aggregate volume of home-market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales for the subject merchandise, we determined that the home market was viable for the respondent.

Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same level of trade (“LOT”) as the EP or CEP. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 412(c)(2)(2001). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. Id. ; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 (November 19, 1997).

In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market ( i.e., the “chain of distribution”), 2 including selling functions, 3 class of customer (“customer category”), and the level of selling expenses for each type of sale.

Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for EP and comparison-market sales ( i.e., NV based on either home-market or third-country prices), we consider the starting prices before any adjustments. For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and profit under section 772(d) of the Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. March 7, 2001).

When the Department is unable to find sales of the foreign like product in the comparison market at the same LOT as the EP or CEP, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP or CEP sales at a different LOT in the comparison market, where available data make it practicable, we make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales only, if a NV level of trade is more remote from the factory than the CEP LOT and there is no basis for determining whether the difference in LOTs between NV and CEP affected price comparability (i.e., no LOT adjustment was practicable), the Department will grant a CEP offset, as provided in section 773(a)(7)(B) of the Act.

We obtained information from Iscor regarding the marketing stages involved in making the reported home-market and U.S. sales, including a description of the selling activities performed by the respondent for each channel of distribution. Iscor's LOT findings are summarized below.

Iscor reported one channel of distribution in the home market with two customer categories, merchants (which included distributors, processors and service centers) and end-users. The selling activities associated with all sales were similar ( e.g., freight and delivery arrangements, order processing, inventory management, after-sales service, and quality assurance) and, based on our analysis of the selling activities, we preliminarily determine that the reported single home-market channel of distribution constitutes one LOT. Iscor reported one channel of distribution in the U.S. market, represented by its CEP sales. Iscor's CEP level of trade was its sales to its affiliated reseller. After making deductions pursuant to section 772(d) of the Act, we found that the selling functions performed by Iscor at the CEP level ( e.g., freight and delivery arrangements, order processing, inventory management, after-sales service and quality assurance) were not sufficiently different from the selling functions performed at the home-market LOT ( e.g., freight and delivery arrangements, order processing, inventory management, after-sales service, and quality assurance) to consider the home-market LOT to be different and at a more advanced stage of distribution than the CEP LOT. Because the sole home-market LOT was not different from the CEP LOT we did not make a LOT adjustment.

Although Iscor claimed a CEP-offset adjustment to NV, because we found the CEP LOT to be similar to the home-market LOT we made no CEP-offset adjustment.

We calculated NV based on “free on rail ex-works” prices to unaffiliated customers. We made adjustments, where appropriate, to the starting price for billing adjustments, interest revenue, rebates, and early-payment discounts. We also made deductions for movement expenses ( i.e., inland freight expense from plant/warehouse to customer) under section 773(a)(6)(B)(ii) of the Act. In addition, we made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in circumstances of sale for imputed credit expenses.

We also deducted home-market packing costs and added U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of the Act.

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.

As provided in section 782(i) of the Act, we will verify all information relied upon in making our final determination.

Section 733(e)(1) of the Tariff Act provides that the Department will preliminarily determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise; or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales; and (B) there have been massive imports of the subject merchandise over a relatively short period.

Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) the volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, 19 CFR 351.206(h)(2) provides that, “In general, unless the imports during the “relatively short period” have increased by at least 15 percent over the imports during an immediately preceding period of comparable duration, the Secretary will not consider the imports massive.”

Section 351.206(i) of the Department's regulations defines “relatively short period” as generally the period beginning on the date the proceeding begins ( i.e., the date the petition is filed) and ending at least three months later. This section provides further that, if the Department “finds that importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely,” then the Department may consider a period of not less than three months from that earlier time.

In determining whether the above statutory criteria have been satisfied, we examined the following information: (1) The evidence presented in the petitioners' submissions of December 7, 2001, and January 14, 2002; (2) new evidence obtained since the initiation of the less-than-fair-value (LTFV) investigations ( i.e., additional import statistics released by the Census Bureau); and (3) the International Trade Commission's (ITC) affirmative preliminary injury determination ( see Certain Cold-Rolled Steel Products From Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Japan, Korea, Netherlands, New Zealand, Russia, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, International Trade Commission Investigations Nos. 701-TA-422-425 and 731-TA-964-983 Preliminary Determination, 66 FR 57985 (November 19, 2001)).

In determining whether a history of dumping and material injury exists, the Department generally considers current or recent antidumping duty orders on the subject merchandise from the country in question in the United States and current orders in any other country. See Carbon and Alloy Steel Wire Rod From Germany, Mexico, Moldova, Trinidad and Tobago, and Ukraine: Notice of Preliminary Determination of Critical Circumstances, 67 FR 6224 (February 11, 2002) ( Carbon and Alloy Steel Wire Rod ). Because we are not aware of any existing antidumping order in any country on cold-rolled carbon steel flat products from South Africa, we do not find a history of dumping from South Africa, pursuant to section 733(e)(1)(A)(i) of the Act. However, the Department may look to the second criterion for determining whether importers knew or should have known that exporters were selling subject merchandise from South Africa at LTFV prices.

In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known the exporter was selling cold-rolled steel at less than fair value, the Department normally considers margins of 25 percent or more for export price (EP) sales and 15 percent or more for CEP sales sufficient to impute importer knowledge of sales at LTFV. See Carbon and Alloy Steel Wire Rod, 67 FR 6224, 6225.

The Department normally bases its decision with respect to knowledge on the margins determined in the preliminary determination. Therefore, for purposes of this preliminary determination of critical circumstances, we are relying on the margin calculated for Iscor for this preliminary determination. Because this margin is greater than 15 percent (see “Suspension of Liquidation” section below), in the case of South Africa, which has CEP sales, we find that there is a reasonable basis to impute knowledge of dumping with respect to imports from South Africa.

In determining whether there is a reasonable basis to believe or suspect that an importer knew or should have known that there was likely to be material injury by reason of dumped imports, the Department normally will look to the preliminary injury determination of the ITC. If the ITC finds a reasonable indication of present material injury to the relevant U.S. industry, the Department will determine that a reasonable basis exists to impute importer knowledge that material injury is likely by reason of dumped imports. See Final Determination of Sales at Less Than Fair Value: Certain Cut-To-Length Carbon Steel Plate from the People's Republic of China, 62 FR 61964 (November 20, 1997). In this case, the ITC preliminarily found that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of subject merchandise from South Africa. See Determinations and Views of the Commission, Investigations Nos. 701-TA-422-425 and 731-TA-964-983, Publication 3471 (November 2001) ( ITC Determination ). Due to the ITC's finding of material injury, we preliminarily determine that there is a reasonable basis to believe or suspect that importers knew or should have known that imports of cold-rolled steel from South Africa were likely to cause material injury.

In determining whether there are “massive imports” over a “relatively short period,” pursuant to section 733(e)(1)(B) of the Act, the Department normally compares the import volumes of the subject merchandise for at least three months immediately preceding the filing of the petition ( i.e., the “base period”) to a comparable period of at least three months following the filing of the petition ( i.e., the “comparison period”). However, as stated in 19 CFR 351.206(i), “if the Secretary finds importers, or exporters or producers, had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, then the Secretary may consider a time period of not less than three months from that earlier time.” Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period. We used company-specific shipment data and determined that there were not massive imports either for Iscor or for “all others.” For a detailed analysis, see the memorandum from Richard Moreland to Faryar Shirzad, dated April 26, 2002 ( Preliminary Negative Determinations of Critical Circumstances—South Africa ).

In accordance with section 733(d)(2) 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:

In accordance with section 733(f) of the Act, we have notified the ITC of our determination. If our final determination is affirmative, pursuant to section 735(b)(2) of the Act, 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.

We will disclose the calculations used in our analysis to parties in this proceeding in accordance with 19 CFR 351.224(b).

Case briefs for this investigation must be submitted to the Department no later than seven days after the date of the final verification report issued in this proceeding. Rebuttal briefs must be filed five days from the deadline date for case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Section 774 of the Act provides that the Department will hold a public hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by an interested party. If a request for a hearing is made in this investigation, the hearing will tentatively be held three days after the rebuttal brief deadline date at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C. 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 the following information: (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.

This determination is published pursuant to sections 733(f) and 777(i) of the Act.