[Federal Register Volume 61, Number 194 (Friday, October 4, 1996)]
[Notices]
[Pages 51888-51891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25538]


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DEPARTMENT OF COMMERCE
[A-421-804]


Certain Cold-Rolled Carbon Steel Flat Products From the 
Netherlands; Preliminary Results of Antidumping Duty Administrative 
Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to requests from the respondent, Hoogovens Staal 
BV (Hoogovens), and from the petitioners in the original investigation, 
the

[[Page 51889]]

Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on certain cold-rolled carbon 
steel flat products from the Netherlands. This review covers one 
manufacturer/exporter, Hoogovens, and the period August 1, 1994 through 
July 31, 1995.
    We preliminarily determine the dumping margin for Hoogovens to be 
9.26 percent during the period August 1, 1994, through July 31, 1995. 
Interested parties are invited to comment on these preliminary results. 
Parties who submit argument in this proceeding are requested to submit 
with the argument: (1) A statement of the issue; and (2) a brief 
summary of the argument.

EFFECTIVE DATE: October 4, 1996.

FOR FURTHER INFORMATION CONTACT: Helen M. Kramer or Linda D. Ludwig, 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Room 7866, Washington, D.C. 20230; telephone 
(202) 482-0405 or (202) 482-3833, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Rounds Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

Background

    The Department published an antidumping duty order on certain cold-
rolled carbon steel flat products from the Netherlands on August 19, 
1993 (58 FR 44172). The Department published a notice of ``Opportunity 
to Request an Administrative Review'' of the antidumping duty order for 
the 1994/95 review period on August 1, 1995 (60 FR 39150). On August 
29, 1995, Hoogovens requested that the Department conduct an 
administrative review of the antidumping duty order on cold-rolled 
carbon steel flat products from the Netherlands. The petitioners made a 
similar request on August 31, 1995. We initiated the review on 
September 8, 1995 (60 FR 46817).
    On February 15, 1996, the petitioners requested that the Department 
determine, in accordance with section 751(a)(4) of the Act, whether 
antidumping duties have been absorbed by Hoogovens during the period of 
review (``POR''). Section 351.213(j) of the Department's draft 
regulations provides that, for transition orders as defined in section 
751(c)(6)(C) of the Act, i.e., orders in effect as of January 1, 1995, 
reviews initiated in 1996 will be considered initiated in the second 
year, and reviews initiated in 1998 will be considered initiated in the 
fourth year. 61 FR 7317, 7366 (February 27, 1996). Although these 
regulations are not yet binding upon the Department, they do constitute 
a public statement of how the Department expects to proceed in 
construing section 751(a)(4) of the new statute. This approach assures 
that, prior to the time for sunset review under section 751(c), 
interested parties will still have the opportunity to request a duty 
absorption study on orders for which the second and fourth 
anniversaries have already passed.
    Because the order being reviewed here has been in effect since 
1993, this is a review of a transition order. Therefore, based on the 
policy stated above, the Department will first consider a request for 
an absorption study if a review is initiated in 1996.
    Under the Act, the Department may extend the deadline for 
completion of administrative reviews if it determines that it is not 
practicable to complete the review within the statutory time limit of 
365 days. On April 1, 1996, the Department extended the time limits for 
preliminary and final results in this case. See Extension of Time Limit 
for Antidumping Duty Administrative Reviews, 61 FR 14291.
    The Department is now conducting this administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    The products covered by this review include cold-rolled (cold-
reduced) carbon steel flat-rolled products, of rectangular shape, 
neither clad, plated nor coated with metal, whether or not painted, 
varnished or coated with plastics or other nonmetallic substances, in 
coils (whether or not in successively superimposed layers) and of a 
width of 0.5 inch or greater, or in straight lengths which, if of a 
thickness less than 4.75 millimeters, are of a width of 0.5 inch or 
greater and which measures at least 10 times the thickness or if of a 
thickness of 4.75 millimeters or more are of a width which exceeds 150 
millimeters and measures at least twice the thickness, as currently 
classifiable in the Harmonized Tariff Schedule (HTS) under item numbers 
7209.11.0000, 7209.12.0030, 7209.12.0090, 7209.13.0030, 7209.13.0090, 
7209.14.0030, 7209.14.0090, 7209.21.0000, 7209.22.0000, 7209.23.0000, 
7209.24.1000, 7209.24.5000, 7209.31.0000, 7209.32.0000, 7209.33.0000, 
7209.34.0000, 7209.41.0000, 7209.42.0000, 7209.43.0000, 7209.44.0000, 
7209.90.0000, 7210.70.3000, 7210.90.9000, 7211.30.1030, 7211.30.1090, 
7211.30.3000, 7211.30.5000, 7211.41.1000, 7211.41.3030, 7211.41.3090, 
7211.41.5000, 7211.41.7030, 7211.41.7060, 7211.41.7090, 7211.49.1030, 
7211.49.1090, 7211.49.3000, 7211.49.5030, 7211.49.5060, 7211.49.5090, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7217.11.1000, 
7217.11.2000, 7217.11.3000, 7217.19.1000, 7217.19.5000, 7217.21.1000, 
7217.29.1000, 7217.29.5000, 7217.31.1000, 7217.39.1000, and 
7217.39.5000.
    Included in this review are flat-rolled products of nonrectangular 
cross-section where such cross-section is achieved subsequent to the 
rolling process (i.e., products which have been ``worked after 
rolling'')--for example, products which have been bevelled or rounded 
at the edges. Excluded from this review is certain shadow mask steel, 
i.e., aluminum-killed, cold-rolled steel coil that is open-coil 
annealed, has a carbon content of less than 0.002 percent, is of 0.003 
to 0.012 inch in thickness, 15 to 30 inches in width, and has an ultra 
flat, isotropic surface. These HTS item numbers are provided for 
convenience and Customs purposes. The written description remains 
dispositive.

Verification

    As provided in section 782(i)(3) of the Act, we verified 
information provided by Hoogovens and its U.S. affiliate, Rafferty-
Brown Steel Co., Inc. of Connecticut, using standard verification 
procedures, including on-site inspection of the manufacturer's 
facilities, the examination of relevant sales and financial records, 
and selection of original documentation containing relevant 
information. Our verification results are outlined in the public 
versions of the verification reports.

Transactions Reviewed

    In accordance with Section 751 of the Act, the Department is 
required to determine the normal value and export price (EP) of each 
entry of subject merchandise during the relevant review period, and the 
normal value and constructed export price (CEP) of each sale to the 
first unaffiliated customer in

[[Page 51890]]

the United States during the extended window period.
    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of foreign like product 
sold in the exporting country was sufficient to permit a proper 
comparison with the sales of the subject merchandise to the United 
States, pursuant to section 773(a) of the Act. Therefore, in accordance 
with section 773(a)(1)(B)(i) of the Act, we based normal value (NV) on 
the price at which the foreign like product was first sold for 
consumption in the home market, in the usual commercial quantities and 
in the ordinary course of trade. We determined that Hoogovens need not 
report its home market sales made by an affiliated party to the first 
unaffiliated customer (downstream sales), because these sales were 
small. (See Memorandum for the File, November 8, 1995.) We used sales 
to affiliated customers only where we determined such sales were made 
at arm's-length prices, i.e., at prices comparable to prices at which 
the respondent sold identical merchandise to unrelated customers. There 
were no allegations of below-cost sales in the home market.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent covered by the description in the 
Scope of the Review section, above, and sold in the home market during 
the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. 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 on the basis of the characteristics listed in Appendix III of 
the Department's September 14, 1995 antidumping questionnaire. In 
making the product comparisons, we matched foreign like products based 
on the physical characteristics reported by the respondent and verified 
by the Department.

Fair Value Comparisons

    To determine whether sales of certain cold-rolled carbon steel flat 
products by Hoogovens to the United States were made at less than fair 
value, we compared EP or CEP to NV, as described in the United States 
Price and Normal Value sections of this notice. In accordance with 
section 777A(d)(2), we calculated monthly weighted-average prices for 
NV and compared these to individual U.S. transactions. In accordance 
with section 773(a)(4) of the Act, we used constructed value (CV) as 
the basis for NV when there were no contemporaneous sales of the 
foreign like product in the comparison market. All the sales to which 
CV was applied were CEP sales of secondary merchandise. We calculated 
CV in accordance with section 773(e) of the Act and the methodology 
enunciated in the Memorandum of April 19, 1995, entitled Treatment of 
Non-Prime Merchandise for the First Administrative Review of Certain 
Carbon Steel Flat Products. We included the cost of manufacture, and 
selling, general and administrative expenses (SG&A). In accordance with 
section 773(e)(2)(A) of the Act, we based SG&A expenses on the amounts 
incurred by the respondent in connection with the production and sale 
of the foreign like product in the ordinary course of trade for 
consumption in the comparison market. For selling expenses, we used the 
weighted average home market selling expenses. There were no 
adjustments to CV for differences in circumstances of sale.

United States Price (USP)

    For the price to the United States, we used export price (EP) or 
constructed export price (CEP) as defined in sections 772(a) and 772(b) 
of the Act, as appropriate. All of the CEP sales were further 
manufactured in the United States.
    We calculated EP and CEP based on the packed, delivered, duty-paid 
price to unaffiliated customers in the United States. We made 
deductions for movement expenses (foreign inland freight, foreign 
brokerage and handling, international freight, marine insurance, U.S. 
inland freight, U.S. brokerage and handling, and U.S. Customs duties) 
in accordance with section 772(c)(2)(A) of the Act. For EP sales, we 
made deductions from the gross unit price for discounts where 
applicable. We accounted for post-sale price adjustments for individual 
sales (reported in the ``Other Discounts'' field) by reducing or 
increasing the gross unit price, as appropriate. In accordance with 
section 772(d)(1) of the Act and the Statement of Administrative Action 
(SAA) (at 823-824), we calculated the CEP by deducting discounts, 
selling expenses associated with economic activities occurring in the 
United States, including commissions, credit expenses, and indirect 
selling expenses, inventory carrying costs and repacking expenses. In 
accordance with section 772(d)(2) of the Act, we also deducted the cost 
of further manufacturing. Finally, we made an adjustment for an amount 
of profit allocated to these expenses in accordance with section 
772(d)(3) of the Act. No other adjustments to EP or CEP were claimed or 
allowed.

Normal Value

    Home market prices were based on the packed, ex-factory or 
delivered prices to affiliated or unaffiliated customers and were 
reported net of value added tax. We deducted packing and movement 
expenses in accordance with sections 773(a)(6) (A) and (B) of the Act. 
We made adjustments, where appropriate, for discounts, rebates and 
post-sale price adjustments. In comparisons to EP and CEP sales, we 
also made adjustments to NV for differences in cost attributable to 
differences in physical characteristics of the merchandise pursuant to 
section 773(a)(6)(C)(ii) of the Act and increased NV by U.S. packing 
costs in accordance with section 773(a)(6)(A) of the Act.
    As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA 
at 829-831, to the extent practicable, the Department will calculate 
NVs based on sales at the same level of trade as the U.S. sales. When 
the Department is unable to find sales in the comparison market at the 
same level of trade as the U.S. sales, the Department may compare sales 
in the U.S. and foreign markets at different levels of trade. See, 
also, Final Determination of Sales at Less Than Fair Value: Certain 
Pasta from Italy (61 FR 30326, June 14, 1996) (Pasta from Italy).
    In accordance with section 773(a)(7)(A), if sales at different 
levels of trade are compared, the Department will adjust the NV to 
account for the difference in level of trade if two conditions are met. 
First, there must be differences between the actual selling functions 
performed by the seller at the level of trade of the U.S. sale and the 
level of trade of the NV sale. Second, the difference must affect price 
comparability as evidenced by a pattern of consistent price differences 
between sales at the different levels of trade in the market in which 
NV is determined.
    In its response to Section A of the questionnaire, Hoogovens stated 
that it made sales in the U.S. and home markets at two distinct levels 
of trade: (1) sales to end-user customers, and (2) sales to steel 
service centers. In its Section B response, Hoogovens explained that it 
cannot differentiate among the selling functions performed and services 
offered to the different classes of home market or export price 
customers during the POR. Consequently, Hoogovens could not

[[Page 51891]]

meet the Department's test and did not claim a level of trade 
adjustment with respect to its EP sales in this review. Hoogovens 
reported these sales using the code ``1'' in the CUSTLOTH and CUSTLOTU 
fields. However, Hoogovens argued that all of its home market sales 
used as the basis of NV involved the performance of various selling 
activities, many of which are not accounted for by the direct selling 
expense adjustment to NV. Therefore, Hoogovens claimed, there is no 
home market equivalent to the CEP and Hoogovens requested that the 
Department make an adjustment to NV for indirect selling expenses up to 
the amount of indirect selling expenses deducted from CEP. Hoogovens 
reported CEP sales using the code ``2'' in the CUSTLOTU field.
    During verification, the team interviewed Hoogoven's Senior Sales 
Executive for Stripmill Products regarding services provided to 
different categories of customers. He explained that the company 
provides the same types of services to all customers in all markets. 
See the public version of the verification report, p. 10. In 
identifying the level of trade for CEP sales, we considered only the 
selling activities reflected in the U.S. price after deduction of 
expenses and profit under section 772(d) of the Act. Pursuant to 
section 773(a)(1)(B)(i) of the Act, we considered the selling functions 
reflected in the starting price of the home market sales before any 
adjustments. Based on our analysis, we preliminarily find that no level 
of trade differences exist between any sales in either the home market 
or the U.S. market. Therefore, all price comparisons are at the same 
level of trade, and neither an adjustment pursuant to section 
773(a)(7)(A), nor a circumstances of sale adjustment in accordance with 
section 773(a)(6)(C)(iii) of the Act and 19 C.F.R. 353.56, is 
warranted.

Currency Conversion

    For purposes of the preliminary results, we made currency 
conversions based on the official exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank of New York. 
Section 773A(a) of the Act directs the Department to use a daily 
exchange rate in order to convert foreign currencies into U.S. dollars, 
unless the daily rate involves a ``fluctuation.'' In accordance with 
the Department's practice, we have determined that a fluctuation exists 
when the daily exchange rate differs from a benchmark by 2.25 percent. 
The benchmark is defined as the rolling average of rates for the past 
40 business days. When we determine a fluctuation existed, we 
substitute the benchmark for the daily rate. However, for the 
preliminary results we have not determined that a fluctuation exists, 
and we have not substituted the benchmark for the daily rate.

Reimbursement

    Section 353.26 of the antidumping regulations requires the 
Department to deduct from the United States price the amount of any 
antidumping duty that a producer or reseller either pays directly on 
behalf of the importer or reimburses to the importer. Based on verified 
evidence on the record in this review, the Department has preliminarily 
determined that Hoogovens has agreed to reimburse Hoogovens Steel USA, 
Inc. (formerly N.V.W. (USA), Inc.), the importer of record, for 
antidumping duties to be assessed, and has reimbursed Hoogovens Steel 
for antidumping duty cash deposits made on entries during the POR. 
Therefore, the regulation applies.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                 Margin 
           Manufacturer/exporter                  Period       (percent)
------------------------------------------------------------------------
Hoogovens Staal BV........................     8/1/94-7/31/95       9.26
------------------------------------------------------------------------

    Parties to this proceeding may request disclosure within five days 
of publication of this notice and any interested party may request a 
hearing within 10 days of publication. Any hearing, if requested, will 
be held 44 days after the date of publication, or the first working day 
thereafter. Interested parties may submit case briefs and/or written 
comments no later than 30 days after the date of publication. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 37 days after the 
date of publication. The Department will publish a notice of the final 
results of the administrative review, which will include the results of 
its analysis of issues raised in any such written comments or at the 
hearing, within 180 days from the issuance of these preliminary 
results.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between USP and NV, taking into account reimbursed duties, may vary 
from the percentage stated above. The Department will issue 
appraisement instructions directly to Customs. The final results of 
this review shall be the basis for the assessment of antidumping duties 
on entries of merchandise covered by this review and for future 
deposits of estimated duties.
    The following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of certain cold-rolled carbon steel flat products from the 
Netherlands entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results of this administrative 
review, as provided by section 751(a)(1) of the Act and 19 CFR 353.26: 
(1) the cash deposit rate for Hoogovens will be the rate established in 
the final results of this administrative review; (2) if the exporter is 
a firm not covered in this review, but the manufacturer is Hoogovens, 
the cash deposit rate will be that established for Hoogovens in the 
final results of this review; and (3) if neither the exporter nor the 
manufacturer is a firm covered in this review, the cash deposit rate 
will be 19.32 percent, the ``all others'' rate established after remand 
in the LTFV investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act and 19 CFR 353.22.

    Dated: September 27, 1996.
Barbara R. Stafford
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25538 Filed 10-3-96; 8:45 am]
BILLING CODE 3510-DS-P