[Federal Register Volume 62, Number 135 (Tuesday, July 15, 1997)]
[Notices]
[Pages 37866-37869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18583]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-405-802]


Certain Cut-to-Length Carbon Steel Plate From Finland: 
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, Rautaruukki Oy 
(Rautaruukki), and from petitioners (Bethlehem Steel Corporation, U.S. 
Steel Company, a Unit of USX Corporation, Inland Steel Industries, 
Inc., Geneva Steel, Gulf States Steel Inc. of Alabama, Sharon Steel 
Corporation, and Lukens Steel Company), the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on certain cut-to-length carbon steel plate from Finland. 
This review covers the above manufacturer/exporter of the subject 
merchandise to the United States. The period of review (POR) is August 
1, 1995, through July 31, 1996.
    We preliminarily determine the dumping margin for Rautaruukki to be 
1.39 percent during the POR. Interested parties are invited to comment 
on these preliminary results. Parties who submit argument in this 
proceeding should also submit with the argument (1) a statement of the 
issue, and (2) a brief summary of the argument.

EFFECTIVE DATE: July 15, 1997.

FOR FURTHER INFORMATION CONTACT: Jacqueline Wimbush or Linda Ludwig, 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1374 or (202) 482-3833, respectively.
SUPPLEMENTARY INFORMATION:

The Applicable Statute

    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 (URAA). In addition, unless 
otherwise indicated, all references to the Department's regulations are 
to 19 CFR part 353, as amended by the regulations published in the 
Federal Register on May 19, 1997 (62 FR 27296).

Background

    On July 9, 1993, the Department published in the Federal Register 
(58 FR 37136) the final affirmative antidumping duty determination on 
certain cut-to-length carbon steel plate from Finland. We published an 
antidumping duty order on August 19, 1993 (58 FR 44165). On August 12, 
1996, the Department published the Opportunity to Request an 
Administrative Review of this order for the period August 1, 1995-July 
31, 1996 (61 FR 41768). The Department received requests for an 
administrative review of Rautaruukki's exports from Rautaruukki itself, 
a producer/exporter of the subject merchandise, and from the 
petitioners. We initiated the review on September 17, 1996 (61 FR 
48882).
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for completion of an administrative review if it 
determines that it is not practicable to complete the review within the 
statutory time limit of 365 days. On April 11, 1997, the Department 
extended the time limits for the preliminary results in this case. See 
Extension of Time Limit for Antidumping Duty Administrative Reviews, 61 
FR 14291 (April 11, 1997).
    The Department is conducting this review in accordance with section 
751(a) of the Act.

Scope of the Review

    The products covered by this administrative review constitute one 
``class or kind'' of merchandise: certain cut-to-length carbon steel 
plate. These products include hot-rolled carbon steel universal mill 
plates (i.e., flat-rolled products rolled on four faces or in a closed 
box pass, of a width exceeding 150 millimeters but not exceeding 1,250 
millimeters and of a thickness of not less than 4 millimeters, not in 
coils and without patterns in relief), of rectangular shape, neither 
clad, plated nor coated with metal, whether or not painted, varnished, 
or coated with plastics or other nonmetallic substances; and certain 
hot-rolled carbon steel flat-rolled products in straight lengths, of 
rectangular shape, hot rolled, neither clad, plated, nor coated with 
metal, whether or not painted, varnished, or coated with plastics or 
other nonmetallic substances, 4.75 millimeters or more in thickness and 
of a width which exceeds 150 millimeters and measures at least twice 
the thickness, as currently classifiable in the Harmonized Tariff 
Schedule (HTS) under item numbers 7208.40.3030, 7208.40.3060, 
7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 
7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 
7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, and 
7212.50.0000. Included are flat-rolled products of non-rectangular 
cross-section where such cross-section is achieved subsequent to the 
rolling process (i.e., products which have been ``worked after 
rolling'') for example, products which have been beveled or rounded at 
the edges. Excluded is grade X-70 plate. These HTS item numbers are 
provided for convenience and Customs purposes. The written description 
remains dispositive.

[[Page 37867]]

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by the respondent by 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 verification reports, the 
public versions of which are available at the Department of Commerce, 
in Central Records Unit (CRU), Room B099.

Transactions Reviewed

    In accordance with section 751(a)(2) of the Act, the Department is 
required to determine the normal value (NV) and export price (EP) or 
constructed export price (CEP) of each entry of subject merchandise 
during the relevant review period.
    Based on a review of Rautaruukki's submissions and verification 
findings, the Department determined that Rautaruukki need not report 
its home market downstream sales because they would most likely not be 
needed in the calculation of normal value. See Decision Memorandum on 
Reporting Downstream Sales, July 2, 1997.

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 most similar foreign like product 
on the basis of the characteristics listed in Appendix III of the 
Department's antidumping questionnaire. We considered all shipbuilding 
Grade ``A'' steel other than ABA, the specification sold in the U.S. 
market, to be most similar to the U.S. specification.

Fair Value Comparisons

    To determine whether sales of certain cut-to-length carbon steel 
plate by Rautaruukki to the United States were made at less than fair 
value, we compared the EP to the NV, as described in the ``Export 
Price'' and ``Normal Value'' sections of this notice. In accordance 
with section 777A (d)(2) of the Act, we calculated monthly weighted-
average prices for NV and compared these to individual U.S. 
transactions.

Export Price

    We used EP as defined in section 772(a) of the Act. We calculated 
EP based on packed prices to unaffiliated customers in the United 
States. Where appropriate, we made deductions from the starting price 
for brokerage and handling, international freight, marine insurance, 
other transportation expenses, certification charges and credit. We 
have made adjustments to international freight to include fees paid to 
affiliated parties. See Sales Verification Report, June 11, 1997. We 
have deducted estimated expenses to account for harbor maintenance and 
depreciation. See Analysis Memorandum, July 7, 1997.

Normal Value

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of the 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 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, at the same level of trade as the export price. See 
``Level of Trade'' section below.
    Where appropriate, we deducted rebates, discounts, credit expenses, 
inland freight, certification charges, warranty and packing.
    For comparison to EP, we increased NV by U.S. packing costs in 
accordance with section 773(a)(6)(A) of the Act. Where sales are made 
in the home market on a different weight basis than in the U.S. market 
(theoretical versus actual weight or where different theoretical weight 
factors are used), it is the Department's practice to convert all 
quantities to the same weight basis, using the conversion factors 
supplied by the respondents. However, we were unable to verify 
respondent's actual-to-theoretical weight conversion factors. See Sales 
Verification Report, June 10, 1997. For these preliminary results, we 
have adjusted for differences between the theoretical weight factors 
used in the two markets. We have also converted all figures based on 
actual weight to a theoretical weight basis using a facts available 
conversion factor (the lowest factor submitted by respondent). We 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. For the difference in merchandise 
adjustment, we relied on cost of production (COP) and constructed value 
(CV) data. In accordance with the Department's practice, where the 
difference in merchandise adjustment for any product comparison 
exceeded 20 percent for the most similar product match, we based NV on 
CV.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action (SAA) accompanying the URRA, to the 
extent practicable, the Department will calculate normal values based 
on sales at the same level of trade as the U.S. sales (either EP or 
CEP). When the Department is unable to find sales in the comparison 
market at the same level of trade as the U.S. sale(s), the Department 
may compare sales in the U.S. and foreign markets at different levels 
of trade, and adjust NV if appropriate. The NV level of trade is that 
of the starting-price sales in the home market. As the Department 
explained in Gray Portland Cement and Clinker From Mexico: Final 
Results of Antidumping Duty Administrative Review, 62 F.R. 17148, 17156 
(April 9, 1997), for both EP and CEP, the relevant transaction for the 
level of trade analysis is the sale from the exporter to the importer.
    To determine whether home market sales are at a different level of 
trade than U.S. sales, we examine whether the home market sales are at 
different stages in the marketing process than the U.S. sales. The 
marketing process in both markets begins with the good being sold by 
the producer and extends to the sale to the final user. The chain of 
distribution between the producer and the final user may have many or 
few links, and each respondent's sales are generally to an importer, 
whether independent or affiliated. We review and compare the 
distribution systems in the home market and the United States, 
including selling functions, class of customer, and the extent and 
level of selling expenses for each claimed level of trade. Customer 
categories such as distributor, retailer or end-user are commonly used 
by respondents to describe level of trade, but without substantiation, 
they are insufficient to establish that a claimed level of trade is 
valid. An analysis of the chain of distribution and of the selling 
functions substantiates or invalidates the claimed customer 
categorization levels. If the claimed levels are different, the selling 
functions performed in selling to each level should also be different. 
Conversely, if customer level are

[[Page 37868]]

nominally the same, the selling functions performed should also be the 
same. Different levels of trade necessarily involve differences in 
selling functions, but differences in selling functions, even 
substantial ones, are not alone sufficient to establish a difference in 
the level of trade. Differences in levels of trade are characterized by 
purchasers at different stages in the chain of distribution and sellers 
performing qualitatively different functions in selling to them.
    When we compare U.S. sales to home market sales at a different 
level of trade, we make a level-of-trade adjustment if the difference 
in level of trade affects price comparability. We determine any effect 
on price comparability by examining sales at different levels of trade 
in a single market, the home market (or the third-country market used 
to calculate NV when the aggregate volume of sales in the home market 
is less than five percent of the aggregate volume of U.S. sales). Any 
price effect must be manifested in a pattern of consistent price 
differences between home market (or third-country) sales used for 
comparison and sales at the equivalent level of trade of the export 
transaction. See Granular Polytetrafluorethylene Resin From Italy; 
Preliminary Results of Antidumping Duty Administrative Review, 62 FR 
26283, 26285 (May 13, 1997); Cement from Mexico. To quantify the price 
differences, we calculate the difference in the average of the net 
prices of the same models sold at different levels of trade. We use the 
average percentage difference between these net prices to adjust NV 
when the level of trade of NV is different from that of the export 
sale. If there is no pattern of price differences, then the difference 
in level of trade does not have a price effect and therefore, no 
adjustment is necessary.
    Rautaruukki sold to a single customer in the U.S. market (a trading 
company). In the home market, Rautaruukki sold to two categories of 
customers (wholesalers/distributors and end-users) and performed the 
same selling functions between sales to all its U.S. and home market 
customers. Thus, our analysis of the questionnaire response leads us to 
conclude that sales within each market and between markets are not made 
at different levels of trade. Accordingly, we preliminarily find that 
all sales in the home market and the U.S. market are made at the same 
level of trade. Therefore, all price comparisons are at the same level 
of trade and no adjustment pursuant to section 773(a)(7)(A) is 
warranted.

Cost of Production Analysis

    Based on the fact that the Department had disregarded below cost 
sales in the first administrative review (61 FR 2792) (the most 
recently completed investigation/review of Rautaruukki at the time of 
initiation of this review), in accordance with section 773(b)(2)(A)(ii) 
of the Act, the Department found reasonable grounds to believe or 
suspect that Rautaruukki made home market sales at prices below the 
cost of production. As a result, the Department initiated an 
investigation to determine whether the respondent made home market 
sales during this POR at prices below their COP within the meaning of 
section 773(b) of the Act. Before making any fair value comparisons, we 
conducted the COP analysis described below.

A. Calculation of COP

    We calculated the COP based on the sum of respondent's cost of 
materials and fabrication for the foreign like product, plus amounts 
for home market general expenses and packing costs in accordance with 
section 773(b)(3) of the Act. Based on findings made at verification, 
we have recalculated Rautaruukki's general and administrative expenses 
and interest. See Memorandum to Chris Marsh From Elizabeth Lofgren, 
June 3, 1997.

B. Test of Home Market Prices

    We used the respondent's weighted-average COP, as adjusted (see 
above), for the period August 1, 1995 to July 31, 1996. We compared the 
weighted-average COP figures to home market sales of the foreign like 
product as required under section 773(b) of the Act. In determining 
whether to disregard home-market sales made at prices below the COP, we 
examined whether (1) within an extended period of time, such sales were 
made in substantial quantities, and (2) such sales were made at prices 
which permitted the recovery of all costs within a reasonable period of 
time. On a product-specific basis, we compared the COP to the home 
market prices, less any applicable movement charges, rebates, 
discounts, and direct and indirect selling expenses.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C), where less than 20 percent of 
respondent's sales of a given product were at prices 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 20 percent or more of a respondent's sales of a 
given product during the POR were at prices less than the COP, we 
determined such sales to have been made in ``substantial quantities,'' 
and within an extended period of time in accordance with section 
773(b)(2)(B) of the Act. Where we determined that such sales were also 
not made at prices which would permit recovery of all costs within a 
reasonable period of time, in accordance with section 773(b)(2)(D) of 
the Act, we disregarded the below-cost sales. Where all sales of a 
specific product were at prices below the COP, we disregarded all sales 
of that product, and calculated NV based on CV.

D. Calculation of CV

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of respondent's cost of materials, fabrication, SG&A, 
U.S. packing costs, interest expenses and profit as reported in the 
U.S. sales database. As noted above, we recalculated Rautaruukki's 
general and administrative expenses and interest expenses based on our 
verification results. In accordance with Sec. 773(e)(2)(A) of the Act, 
we based SG&A and profit on the amounts incurred and realized by the 
respondent in connection with the production and sale of the foreign 
like product in the ordinary course of trade, for consumption in the 
foreign country. For selling expenses, we used the weighted-average 
home market selling expenses. Where we compared CV to EP, we deducted 
from CV the weighted-average home market direct selling expenses and 
added the weighted-average U.S. product-specific direct selling 
expenses, in accordance with Sec. 353.56(a)(2) of the Department's 
regulations.

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 as a general matter 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 exists, we substitute the benchmark for the daily rate.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the

[[Page 37869]]

following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                Margin  
          Manufacturer/exporter                 Period        (percent) 
------------------------------------------------------------------------
Rautaruukki Oy..........................     8/1/95-7/31/96         1.39
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. 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 business day thereafter. Case briefs from interested parties may 
be submitted not later than 30 days after the date of publication. 
Rebuttal briefs, limited to issues raised in those briefs, may be filed 
not later than 37 days after the date of publication of this notice. 
The Department will publish the final results of this administrative 
review, including its analysis of issues raised in the case and 
rebuttal briefs, not later than 120 days after the date of publication 
of this notice.
    The following deposit requirements will be effective upon 
publication of the final results of this antidumping duty review for 
all shipments of certain cut-to-length carbon steel plate from Finland, 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date, as provided by section 751(a) of the Tariff Act: (1) 
The cash deposit rate for the reviewed company will be that established 
in the final results of review; (2) for exporters not covered in this 
review, but covered in the LTFV investigation or previous review, the 
cash deposit rate will continue to be the company-specific rate from 
the LTFV investigation; (3) if the exporter is not a firm covered in 
this review, a previous review, or the original LTFV investigation, but 
the manufacturer is, the cash deposit rate will be the rate established 
for the most recent period for the manufacturer of the merchandise; (4) 
the cash deposit rate for all other manufacturers or exporters will 
continue to be 32.80 percent, the ``All Others'' rate made effective by 
the LTFV investigation. These requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are published in accordance 
with section 751(a)(1) of the Act and 19 CFR 353.22.

    Dated: July 7, 1997.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-18583 Filed 7-14-97; 8:45 am]
BILLING CODE 3510-DS-P