[Federal Register Volume 63, Number 43 (Thursday, March 5, 1998)]
[Notices]
[Pages 10849-10854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5603]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-469-807]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Stainless Steel Wire Rod 
From Spain

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

EFFECTIVE DATE: March 5, 1998.

FOR FURTHER INFORMATION CONTACT: Howard Smith or Alexander Amdur, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-5193 or (202) 482-5346, 
respectively.

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 citations to the Department's regulations are 
to the regulations at 19 CFR part 351 (May 19, 1997).

Preliminary Determination

    We preliminarily determine that stainless steel wire rod (SSWR) 
from Spain is being, or is likely to be, sold in the United States at 
less than fair value (LTFV), as provided in section 733 of the Act. The 
estimated margins of sales at LTFV are shown in the ``Suspension of 
Liquidation'' section of this notice.

Case History

    Since the initiation of this investigation (Notice of Initiation of 
Antidumping Investigations: Stainless Steel Wire Rod from Germany, 
Italy, Japan, Korea, Spain, Sweden, and Taiwan, 62 FR 45224 (August 26, 
1997) (Notice of Initiation)), the following events have occurred:
    In August 1997, the Department issued a cable to the U.S. Embassy 
in Spain requesting information identifying potential Spanish producers 
and/or exporters of the subject merchandise to the United States. We 
did not receive a response from the U.S. Embassy in Spain. However, 
based on the petition, wherein Roldan, S.A., (Roldan) was the only 
producer and/or exporter identified, on September 19, 1997, the 
Department issued an antidumping questionnaire to Roldan.
    Also in September 1997, the United States International Trade 
Commission (ITC) issued an affirmative preliminary injury determination 
in this case (see ITC Investigation No. 731-TA-773).
    In October 1997, the Department received Roldan's response to 
Section A of the questionnaire. Roldan submitted its response to 
Sections B, C, and D of the questionnaire in November 1997.
    On October 10, 1997, the petitioners in this case (i.e., AL Tech 
Specialty Steel Corp., Carpenter Technology Corp., Republic Engineered 
Steels, Talley Metals Technology, Inc., and United Steelworkers of 
America) requested that the Department revise its questionnaire to 
obtain information on the actual nickel, chromium, and molybdenum 
content for each sale of the SSWR made during the period of 
investigation (POI). On October 21, 1997, Roldan requested that the

[[Page 10850]]

Department deny the petitioners' request. The Department, upon 
consideration of the comments from all parties on this matter, issued a 
memorandum on December 18, 1997, indicating its decision to make no 
changes in the model-matching criteria specified in the September 19, 
1997, questionnaire (see Memorandum from Team to Holly Kuga, Office 
Director, dated December 18, 1997).
    On December 11, 1997, pursuant to section 733(c)(1)(A) of the Act, 
the petitioners made a timely request to postpone the preliminary 
determination. We granted this request and, on December 16, 1997, we 
postponed the preliminary determination until no later than February 
25, 1998 (62 FR 66849, December 22, 1997).
    We issued supplemental sections A, B, C, and D questionnaires to 
Roldan in December 1997 and received responses to these questionnaires 
in January 1998. We issued an additional supplemental section D 
questionnaire on February 4, 1998 and received responses to this 
questionnaire on February 9, and 13, 1998. Due to time constraints, we 
have not used the sales data that was included in Roldan's February 13, 
1998 response. However, we will consider this information for the final 
determination. Finally, on February 6, and 10, 1998, the petitioners 
submitted their comments on Roldan's responses and on issues they 
considered relevant to the preliminary determination.

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on February 20, 1998, 
Roldan requested that, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination until no later than 135 days after the publication of 
this notice in the Federal Register. The respondent also requested that 
the Department extend provisional measures from a four-month period to 
not more than six months pursuant to 19 CFR 351.210(e)(2). In 
accordance with 19 CFR 351.210(b)(2), because (1) our preliminary 
determination is affirmative, (2) Roldan accounts for a significant 
proportion of exports of the subject merchandise, and (3) no compelling 
reasons for denial exist, we are granting Roldan'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. See Preliminary Determination 
of Sales at Less Than Fair Value and Postponement of Final 
Determination: Open-End Spun Rayon Singles Yarn From Austria, 62 FR 
14399, 14400 (March 26, 1997); see also Final Determination of Sales at 
Less Than Fair Value: Certain Pasta From Italy, 61 FR 30326 (June 14, 
1996).

Scope of Investigation

    For purposes of this investigation, SSWR comprises products that 
are hot-rolled or hot-rolled annealed and/or pickled and/or descaled 
rounds, squares, octagons, hexagons or other shapes, in coils, that may 
also be coated with a lubricant containing copper, lime, or oxalate. 
SSWR is made of alloy steels containing, by weight, 1.2 percent or less 
of carbon and 10.5 percent or more of chromium, with or without other 
elements. These products are manufactured only by hot-rolling or hot-
rolling, annealing, and/or pickling and/or descaling, are normally sold 
in coiled form, and are of solid cross-section. The majority of SSWR 
sold in the United States is round in cross-sectional shape, annealed 
and pickled, and later cold-finished into stainless steel wire or 
small-diameter bar.
    The most common size for such products is 5.5 millimeters or 0.217 
inches in diameter, which represents the smallest size that normally is 
produced on a rolling mill and is the size that most wire-drawing 
machines are set up to draw. The range of SSWR sizes normally sold in 
the United States is between 0.20 inches and 1.312 inches diameter. Two 
stainless steel grades, SF20T and K-M35FL, are excluded from the scope 
of the investigation. The chemical makeup for the excluded grades is as 
follows:

----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                      SF20T                                                     
----------------------------------------------------------------------------------------------------------------
Carbon...............................  0.05 max...............  Chromium...............  19.00/21.00.           
Manganese............................  2.00 max...............  Molybdenum.............  1.50/2.50.             
Phosphorous..........................  0.05 max...............  Lead...................  added (0.10/0.30).     
Sulfur...............................  0.15 max...............  Tellurium..............  added (0.03 min).      
Silicon..............................  1.00 max                                                                 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                                     K-M35FL                                                    
----------------------------------------------------------------------------------------------------------------
Carbon...............................  0.015 max..............  Nickel.................  0.30 max.              
Silicon..............................  0.70/1.00..............  Chromium...............  12.50/14.00.           
Manganese............................  0.40 max...............  Lead...................  0.10/0.30.             
Phosphorous..........................  0.04 max...............  Aluminum...............  0.20/0.35.             
Sulfur...............................  0.03 max                                                                 
----------------------------------------------------------------------------------------------------------------

    The products under investigation are currently classifiable under 
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 
7221.00.0075 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheadings are provided for convenience 
and customs purposes, the written description of the scope of this 
investigation is dispositive.

Period of Investigation

    The POI is July 1, 1996, through June 30, 1997.

Fair Value Comparisons

    To determine whether sales of SSWR from Spain to the United States 
were made at less than fair value, we compared the Constructed Export 
Price (CEP) to the Normal Value (NV), as described in the ``Constructed 
Export Price'' and ``Normal Value'' sections of this notice, below. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we calculated 
weighted-average CEPs for comparison to weighted-average NVs.
    On January 8, 1998, the Court of Appeals for the Federal Circuit 
issued a decision in CEMEX v. United States, 1998 WL 3626 (Fed Cir.). 
In that case, based on the pre-URAA version of the Act, the Court 
discussed the appropriateness of using Constructed Value (CV) as the 
basis for foreign market value when the Department finds home market 
sales to be outside the ``ordinary course of trade.'' This issue was 
not raised by any party in this proceeding. However, the URAA amended 
the definition of sales outside the ``ordinary course of trade'' to 
include sales below cost. See Section

[[Page 10851]]

771(15) of the Act. Consequently, the Department has reconsidered its 
practice in accordance with this court decision and has determined that 
it would be inappropriate to resort directly to CV, in lieu of foreign 
market sales, as the basis for NV if the Department finds foreign 
market sales of merchandise identical or most similar to that sold in 
the United States to be outside the ``ordinary course of trade.'' 
Instead, the Department will use sales of similar merchandise, if such 
sales exist. The Department will use CV as the basis for NV only when 
there are no above-cost sales that are otherwise suitable for 
comparison. Therefore, in this proceeding, when making comparisons in 
accordance with section 771(16) of the Act, we considered all products 
sold in the home market as described in the ``Scope of Investigation'' 
section of this notice, above, that were in the ordinary course of 
trade, for purposes of determining appropriate product comparisons to 
U.S. sales. 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, based on the 
characteristics listed in Sections B and C of our antidumping 
questionnaire. We have implemented the Court's decision in this case, 
to the extent that the data on the record permitted.
    With respect to the characteristics used to make product 
comparisons, the Department's questionnaire instructed the respondent 
to report the grades of SSWR products it sold during the POI in 
accordance with AISI standards. While Roldan reported most of its sales 
of SSWR in accordance with AISI standards, certain sales were reported 
with non-AISI (or internal) grades in accordance with its sales 
accounting system. Therefore, in instances where Roldan has reported a 
non-AISI grade (or an internal grade code) for a product that falls 
within a single AISI category, we have used the actual AISI grade 
rather than the non-AISI grades reported by Roldan for purposes of our 
analysis. However, in instances where the chemical content ranges of 
reported non-AISI (or an internal grade code) grades are outside the 
parameters of an AISI grade, or where Roldan did not report the 
chemical content ranges of the non-AISI grades, we have preliminarily 
used the grade code reported by Roldan for analysis purposes. We intend 
to examine this issue further for the final determination.
    Furthermore, with respect to home market sales of non-prime 
merchandise made by Roldan during the POI, we excluded these sales from 
our preliminary analysis based on the limited quantity of such sales in 
the home market and the fact that no such sales were made in the United 
States during the POI, in accordance with our past practice. See, e.g., 
Final Determinations of Sales at Less Than Fair Value: Certain Hot-
Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel 
Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products, 
and Certain Cut-to-Length Carbon Steel Plate from Korea, 58 FR 37176, 
37180 (July 9, 1993). For further discussion, see the Concurrence 
Memorandum from The Team to Richard Moreland, dated February 25, 1998 
(Concurrence Memorandum).

Cost Reporting

    Roldan reported that the cost records it maintains in the ordinary 
course of business do not allow it to identify separate costs for each 
unique product as defined by the product characteristics identified in 
the Department's antidumping questionnaire. Therefore, for some unique 
products, Roldan reported the same costs despite the Department's 
instruction to assign a single weighted-average cost to each unique 
product. Based on Roldan's claim regarding the limitations of its cost 
accounting system, we have accepted Roldan's cost reporting methodology 
for the preliminary determination. However, we shall examine Roldan's 
claims at verification and revisit this issue if necessary for the 
final determination. For further discussion, see the Concurrence 
Memorandum.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP or CEP transaction. The NV LOT 
is that of the starting-price sales in the comparison market or, when 
NV is based on CV, that of the sales from which we derive selling, 
general and administrative (SG&A) expenses and profit. For EP, the LOT 
is also the level of the starting-price sale, which is usually from 
exporter to importer. 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 level of trade 
than EP or CEP, we examined stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP offset provision). See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate from South Africa, 62 FR 61731 (November 19, 1997).
    Roldan reported all of its sales to the United States during the 
POI as EP transactions; however, for the reasons identified in the 
``Constructed Export Price'' section of this notice below, we 
reclassified Roldan's U.S. sales as CEP sales. We determined that there 
was only one LOT in the comparison-market and, therefore, we compared 
the CEP LOT to the NV LOT. Roldan did not claim a LOT adjustment. 
Nevertheless, we evaluated whether such an adjustment was necessary by 
examining Roldan's distribution system, including selling functions, 
classes of customers, and selling expenses. After making deductions 
pursuant to section 772(d) of the Act, we found that the selling 
functions performed at the CEP LOT, which included invoicing and 
technical support, were sufficiently different from the selling 
functions performed at the NV LOT, which included sales negotiation, 
customer contact, and technical support, to consider these to be 
different levels of trade. We therefore considered whether the 
difference in LOT affected price comparability. The effect on price 
comparability must be demonstrated by a pattern of consistent price 
differences between sales at the two relevant levels of trade in the 
comparison market. However, since POI sales of the merchandise under 
investigation in the comparison market were at only one LOT, we were 
unable to determine whether there was a pattern of consistent price 
differences. For further discussion of this issue, see the Concurrence 
Memorandum.
    We also considered alternative sources of information in accordance 
with the Statement of Administrative Action (SAA) accompanying the 
Uruguay Round Agreements Act. The SAA provides that, ``if information 
on the same product and company is not available, the LOT adjustment 
may also be based on sales of other products by

[[Page 10852]]

the same company. In the absence of any sales, including those in 
recent time periods, to different levels of trade by the exporter or 
producer under investigation, Commerce may further consider the selling 
expenses of other producers in the foreign market for the same product 
or other products.'' SAA at 830. However, we did not have information 
on the record that would allow us to examine or apply these alternative 
methods for calculating a LOT adjustment.
    Since we were unable to quantify a LOT adjustment based on a 
pattern of consistent price differences, in accordance with section 
773(a)(7)(B) of the Act, we granted a CEP offset because all of the 
comparison sales were at a more advanced level of trade than the sales 
to the United States.

Constructed Export Price

    Roldan reported all of its U.S. sales as EP transactions. These 
sales were made to unaffiliated U.S. customers prior to importation 
through Roldan's affiliated U.S. sales entity, Acerinox U.S.A. Roldan 
noted that this was the customary commercial channel for these sales 
and that the merchandise was shipped directly from the manufacturer to 
the unaffiliated U.S. customer.
    We examine several factors to determine whether sales made prior to 
importation through an affiliated sales agent to an unaffiliated 
customer in the United States are EP sales. These factors are (1) 
whether the merchandise was shipped directly from the manufacturer to 
the unaffiliated U.S. customer; (2) whether the sales follow customary 
commercial channels between the parties involved; and (3) whether the 
function of the U.S. selling agent is limited to that of a ``processor 
of sales-related documentation'' and a ``communication link'' with the 
unrelated U.S. buyer. Where the factors indicate that the activities of 
the U.S. affiliate are ancillary to the sale (e.g., arranging 
transportation or customs clearance), we treat the transactions as EP 
sales. Where the U.S. affiliate is substantially involved in the sales 
process (e.g., negotiating prices, performing support functions), we 
treat the transactions as CEP sales.
    Based on our review of Acerinox U.S.A.'s selling activities, we 
preliminarily determine that Roldan's sales to the United States 
through Acerinox U.S.A. are CEP sales. Although Roldan reported that 
the customary commercial channel is to sell the merchandise prior to 
importation and ship it directly to the unaffiliated U.S. customers 
without having the merchandise enter into the inventory of Acerinox 
U.S.A., we preliminarily determined that Acerinox U.S.A. acted as more 
than a ``processor of sales-related documentation'' and a 
``communication link'' with the unaffiliated U.S. customers. Acerinox 
U.S.A. performed a variety of selling functions in connection with 
Roldan's SSWR sales in the United States, including negotiating the 
terms of SSWR sales with U.S. customers, reporting to Roldan concerning 
market conditions, identifying customers, and coordinating U.S. sales. 
Accordingly, for purposes of the preliminary determination, we are 
treating the sales in question as CEP transactions. However, we will 
examine this issue further at verification. For further discussion of 
this issue, see the Concurrence Memorandum.
    We calculated CEP in accordance with sections 772(b) of the Act. 
Specifically, we calculated CEP based on packed, delivered prices to 
unaffiliated purchasers in the United States. We made deductions from 
the starting price, where appropriate, for discounts. We also made 
deductions for foreign inland freight, foreign brokerage and handling, 
other transportation expenses (i.e., insurance, U.S. Customs duty), 
international freight and U.S. inland freight, pursuant to section 
772(c)(2)(A) of the Act. In accordance with section 772(d)(1) of the 
Act, we deducted those selling expenses associated with economic 
activity occurring in the United States, including credit expenses and 
indirect selling expenses. Because we treated all U.S. sales as CEP 
sales, we reduced U.S. starting price by actual selling expenses 
incurred by the U.S. affiliate rather than the commissions that Roldan 
paid the affiliate (see 19 CFR 351.402(e)). Finally, we made an 
adjustment for profit in accordance with section 772(d)(3) of the Act.

Normal Value

    After testing home market viability, whether sales to affiliates 
were at arm's-length prices, and whether home market sales were at 
below-cost prices, we calculated NV as noted in the ``Price-to-Price 
Comparisons'' section of this notice.

1. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared Roldan'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 Roldan'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.

2. Affiliated Party Transactions and Arm's-Length Test

    Sales to affiliated customers in the home market were not made at 
arm's-length prices and thus were excluded from our analysis because we 
considered them to be outside the ordinary course of trade. See 19 CFR 
351.102. To test whether these sales were made at arm's-length prices, 
we compared, on a model-specific basis, starting prices of sales to 
affiliated and unaffiliated customers net of all movement charges, 
direct selling expenses, and packing. Where, for the tested models of 
subject merchandise, prices to the affiliated party were on average 
99.5 percent or more of the price to unaffiliated parties, we 
determined that sales made to the affiliated party were at arm's 
length. See 19 CFR 351.403(c) and 62 FR at 27355 (preamble to the 
Department's regulations). In instances where no price ratio could be 
constructed for an affiliated customer because identical merchandise 
was not sold to unaffiliated customers, we were unable to determine 
that these sales were made at arm's-length prices and, therefore, 
excluded them from our LTFV analysis. See Final Determination of Sales 
at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products 
from Argentina, 58 FR 37062, 37077 (July 9, 1993). Where the exclusion 
of such sales eliminated all sales of the most appropriate comparison 
product, we made a comparison to the next most similar model.

3. Cost of Production Analysis

    Based on the cost allegation submitted in the petition, the 
Department found reasonable grounds to believe or suspect that Roldan 
had made sales in the home market at prices below the cost of producing 
the merchandise, in accordance with section 773(b)(1) of the Act. As a 
result, the Department initiated an investigation to determine whether 
Roldan made home market sales during the POI at prices below their 
respective COPs within the meaning of section 773(b) of the Act. See 
Notice of Initiation. Before making any fair value comparisons, we

[[Page 10853]]

conducted the COP analysis described below.
A. Calculation of COP
    We calculated the COP based on the sum of Roldan's cost of 
materials and fabrication for the foreign like product, plus amounts 
for home market SG&A expenses and packing costs in accordance with 
section 773(b)(3) of the Act. We adjusted Roldan's reported POI costs 
to eliminate any adjustment for startup costs because we determined 
preliminarily that Roldan identified the startup period incorrectly. 
For further discussion of this issue, see the Calculation Memorandum 
from Howard Smith to Irene Darzenta dated February 25, 1998 and the 
Concurrence Memorandum.
B. Test of Home Market Prices
    We used Roldan's submitted POI weighted-average COPs, as adjusted 
(see above). 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) whether such sales were made at prices which 
permitted the recovery of all costs within a reasonable period of time 
in the normal course of trade. On a product-specific basis, we compared 
the COP (net of selling expenses and packing) to the home market 
prices, less any applicable movement charges, rebates, discounts, 
direct and indirect selling expenses, and packing.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of Roldan'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 Roldan's sales 
of a given product during the POI were at prices less than the COP, we 
determined such sales to have been made in ``substantial quantities'' 
within an extended period of time in accordance with section 
773(b)(2)(B) of the Act. In such cases, we also determined that such 
sales were not made at prices which would permit recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act. Therefore, we disregarded the below-cost 
sales. Where all sales of a specific product were at prices below the 
COP, we disregarded all sales of that product.
    We found that, for certain models of SSWR, more than 20 percent of 
Roldan's home market sales within an extended period of time were sold 
at prices less than COP. Further, the prices did not provide for the 
recovery of costs within a reasonable period of time. We therefore 
disregarded the below-cost sales and used the remaining above-cost 
sales as the basis for determining NV, in accordance with section 
773(b)(1) of the Act. For those U.S. sales of SSWR for which there were 
no comparable (above-cost) home market sales in the ordinary course of 
trade, we compared CEPs to CV in accordance with section 773(a)(4) of 
the Act.

Price-to-Price Comparisons

    We calculated NV based on delivered prices to unaffiliated 
customers. We made deductions, where appropriate, from the starting 
price for inland freight and direct selling expenses, pursuant to 
sections 773(a)(6)(B) and 773(a)(6)(C)(iii) of the Act, respectively. 
We made adjustments, where appropriate, for differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. 
Also, as explained in the ``Level of Trade'' section of this notice 
above, because we determined that NV is at a different LOT than CEP and 
we were unable to quantify a LOT adjustment, we granted a CEP offset 
because all of the comparison sales were at a more advanced level of 
trade than the sales to the United States, pursuant to section 
773(a)(7)(B) of the Act. Accordingly, we deducted home market indirect 
selling expenses up to the amount of U.S. indirect selling expenses. 
Finally, we deducted home market packing costs and added U.S. packing 
costs in accordance with section 773(a)(6)(A) and (B) of the Act.

Currency Conversion

    We made currency conversions into U.S. dollars based on the 
exchange rates in effect on the dates of the U.S. sales as certified by 
the Federal Reserve Bank.
    Section 773A(a) of the Act directs the Department to use a daily 
exchange rate in order to convert foreign currencies into U.S. dollars 
unless the daily rate involves a fluctuation. It is the Department's 
practice to find that a fluctuation exists when the daily exchange rate 
differs from the benchmark rate by 2.25 percent. The benchmark is 
defined as the moving average of rates for the past 40 business days. 
When we determine a fluctuation to have existed, we substitute the 
benchmark rate for the daily rate, in accordance with established 
practice. Further, section 773A(b) of the Act directs the Department to 
allow a 60-day adjustment period when a currency has undergone a 
sustained movement. A sustained movement has occurred when the weekly 
average of actual daily rates exceeds the weekly average of benchmark 
rates by more than five percent for eight consecutive weeks. For an 
explanation of this method, see Policy Bulletin 96-1: Currency 
Conversions, 61 FR 9434 (March 8, 1996). Such an adjustment period is 
required only when a foreign currency is appreciating against the U.S. 
dollar. The use of an adjustment period was not warranted in this case 
because the Spanish peseta did not undergo a sustained movement during 
the POI.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information determined to be acceptable for use in making our final 
determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports of subject 
merchandise that are entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register. We will instruct the Customs Service to require a 
cash deposit or the posting of a bond equal to the weighted-average 
amount by which the NV exceeds the 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 margins are as follows:

------------------------------------------------------------------------
                                                              Weighted- 
                                                               average  
                   Exporter/manufacturer                       margin   
                                                             percentage 
------------------------------------------------------------------------
Roldan, S.A...............................................         11.40
All Others................................................         11.40
------------------------------------------------------------------------

ITC Notification

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

Public Comment

    Case briefs or other written comments in at least ten copies must 
be submitted to the Assistant Secretary for Import

[[Page 10854]]

Administration no later than May 22, 1998, and rebuttal briefs no later 
than May 29, 1998. A list of authorities used and an executive summary 
of issues must accompany any briefs submitted to the Department. Such 
summary should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, the hearing 
will be held on June 2, 1998, time and room to be determined, 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. If 
this investigation proceeds normally, 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 section 777(i) of the Act.

    Dated: February 25, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-5603 Filed 3-4-98; 8:45 am]
BILLING CODE 3510-DS-P