[Federal Register Volume 63, Number 52 (Wednesday, March 18, 1998)]
[Notices]
[Pages 13204-13216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6884]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-421-804]


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

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

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

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SUMMARY: On September 9, 1997, the Department of Commerce (the 
Department) published the preliminary results of the administrative 
review of the antidumping duty order on certain cold-rolled carbon 
steel flat products from the Netherlands. This review covers one 
manufacturer/exporter of the subject merchandise to the United States 
during the period of review (POR), August 1, 1995, through July 31, 
1996. We gave interested parties an opportunity to comment on our 
preliminary results. We also issued a supplemental questionnaire on 
December 18, 1997, on the issues of reimbursement and level of trade. 
Based on our analysis of the comments received, we have changed the 
results from those presented in the preliminary results of review.

EFFECTIVE DATE: March 18, 1998.

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

SUPPLEMENTARY INFORMATION:

Background

    On September 9, 1997, the Department published in the Federal 
Register (62 FR 47418) the preliminary results of the administrative 
review of the antidumping duty order on certain cold-rolled carbon 
steel flat products from the Netherlands (58 FR 44172, August 19, 
1993), as amended pursuant to Court of International Trade (CIT) 
decision (61 FR 47871, September 11, 1996). On December 5, 1997, the 
Department published in the Federal Register (62 FR 64354) a notice of 
extension of the time limit for completion of this review until March 
9, 1998. The Department has now completed this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Act).

Applicable Statute and Regulations

    Unless otherwise stated, 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 19 CFR 
Part 353 (1997).

Scope of This 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 
7209.15.0000, 7209.16.0030, 7209.16.0060, 7209.16.0090, 7209.17.0030, 
7209.17.0060, 7209.17.0090, 7209.18.1530, 7209.18.1560, 7209.18.2550, 
7209.18.6000, 7209.25.0000, 7209.26.0000, 7209.27.0000, 7209.28.0000, 
7209.90.0000, 7210.70.3000, 7210.90.9000, 7211.23.1500, 7211.23.2000, 
7211.23.3000, 7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6085, 
7211.29.2030, 7211.29.2090, 7211.29.4500, 7211.29.6030, 7211.29.6080, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7215.50.0015, 
7215.50.0060, 7215.50.0090, 7215.90.5000, 7217.10.1000, 7217.10.2000, 
7217.10.3000, 7217.10.7000, 7217.90.1000, 7217.90.5030, 7217.90.5060, 
and 7217.90.5090. 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 
beveled 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.
    The POR is August 1, 1995, through July 31, 1996. This review 
covers entries of certain cold-rolled carbon steel flat products from 
the Netherlands by Hoogovens Staal B.V. (Hoogovens).

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received case and rebuttal briefs from the 
respondent (Hoogovens) and 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).
    Comment 1: Petitioners argue that Hoogovens failed to segregate 
properly its warranty and technical service expenses into direct and 
indirect portions, as required under the law. Where a respondent fails 
to report warranty and technical service expenses in direct and 
indirect components, petitioners claim that the Department's practice 
is to treat the expenses as direct in the U.S. market, and to deny any 
adjustment in the home market. According to petitioners, the CIT has 
upheld this policy on several occasions. See RHP Bearings v. United 
States, 875 F. Supp. 854, 859 (CIT 1995).
    Petitioners argue that the three categories of warranty and 
technical service expenses Hoogovens identified and reported as part of 
indirect selling expenses (the amount of credit notes issued to 
customers to satisfy claims of defective merchandise, the cost of 
returned merchandise, and travel

[[Page 13205]]

expenses of Quality Assurance personnel) are direct expenses, as they 
are variable expenses incurred as a direct and unavoidable consequence 
of sales, and vary with the quantity sold. Although Hoogovens claims 
that it cannot tie these expenses to particular sales, petitioners 
argue this does not excuse its improper reporting. According to 
petitioners, the Court of Appeals for the Federal Circuit held in 
Torrington Co. v. United States, 82 F.3d at 1051 (Fed.Cir. 1996), that 
the respondent's method of allocating or recording expenses does not 
alter the relationship of the expenses to the sales under 
consideration, and that its failure to keep adequate records does not 
justify treatment of direct expenses as indirect.
    Hoogovens argues that the Department verified and accepted the 
manner in which it maintains these expenses in its accounting records 
and the methodology Hoogovens adopted to report these expenses in the 
investigation, the two previous reviews and the preliminary results of 
this review. Further, Hoogovens claims that the Department frequently 
treats warranty and technical service expenses as indirect, citing 
Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts 
Thereof From France, Germany, Italy, Japan, Singapore, and the United 
Kingdom; Final Results of Antidumping Duty Administrative Reviews, 62 
FR 2081, 2097 (January 15, 1997) (``AFBs 1997''). Hoogovens points out 
that warranty and technical service expenses incurred during the POR 
frequently relate to sales made before the POR. Accordingly, Hoogovens 
argues it is not possible for respondents to tie warranty expenses 
incurred during the POR to specific sales made during the POR, and 
therefore the Department's long-standing practice is to require 
respondents to report the warranty and technical service expenses 
actually incurred during the POR, regardless of when the sales were 
made. 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; Final 
Results of Antidumping Duty Administrative Reviews and Termination in 
Part, 62 FR 11825, 11839 (March 13, 1997). Hoogovens argues that its 
warranty and technical service expenses are primarily claims for 
damaged merchandise, and that these expenses are not analogous to the 
types of expenses the Department generally considers to be variable 
and/or associated with particular sales, i.e., post-sale price 
adjustments, rebates and discounts. Moreover, Hoogovens claims its 
historical experience shows there is no direct relationship between its 
warranty expenses and the total quantity of sales. Therefore, Hoogovens 
urges the Department to reject petitioners' argument and continue its 
practice of treating Hoogovens' warranty and technical service expenses 
as indirect selling expenses in both the U.S. and home markets.
    Department's Position: We agree with petitioners that Hoogovens' 
warranty and technical service expenses should be considered as direct 
expenses. Contrary to Hoogovens' claim that it has reported these 
expenses as indirect selling expenses (ISE) in both of the previous 
reviews, in the first administrative review it reported them separately 
as direct warranty expenses allocated to subject merchandise on the 
basis of tonnage sold. There has been no change since then in the 
manner in which Hoogovens records these expenses in its accounting 
system, and Hoogovens did not explain why it reported them differently 
in the second and third reviews. The Department verified Hoogovens' 
worksheets for calculating U.S. warranty expenses in this review, in 
which it reported expenses on warranty claims and travel expenses of 
Quality Assurance personnel for subject merchandise. For home market 
warranty expenses, Hoogovens reported expenses on claims, returned/
rejected material, and travel expenses for the home market reporting 
period of December 1993 through September 1996, and calculated the 
total warranty expenses as a percentage of sales.
    As noted in AFBs 1997, the Department has long recognized that 
warranty expenses generally cannot be reported on a transaction-
specific basis and an allocation is necessary. Although Hoogovens cites 
AFBs 1997 as supporting its treatment of warranty and technical service 
expenses as indirect, the relevant comment makes clear that the 
expenses the Department allowed as indirect were fixed expenses for 
salaries, benefits, rent, utilities and depreciation, rather than the 
variable warranty expenses reported in this case. Accordingly, for the 
final results of this review, we have calculated warranty expenses as a 
separate direct variable expense in both the U.S. and home markets and 
deducted them from the reported ISE in the respective markets. We 
allocated the expense to the metric tonnage sold, rather than gross 
price, to avoid the distorting effects of dumping prices in the U.S. 
market and of different terms of sale in the home market. As Hoogovens 
reported these expenses, we disagree with petitioners' argument that we 
should invoke adverse facts available and penalize Hoogovens by denying 
an adjustment to normal value (NV).
    Comment 2: Petitioners argue that the Department should match 
Hoogovens' sales by level of trade (LOT) on the grounds that in the 
second review, Hoogovens initially claimed that it provided much 
greater sales support to its end-user customers than to service 
centers, but later reversed itself. Petitioners cite the statute's 
requirement that an adjustment to NV be made where a difference in LOT 
involves the performance of different selling activities and is 
demonstrated to affect price comparability, based on a pattern of 
persistent price differences between sales at different LOTs in the 
country in which NV is determined. Petitioners also cite the 
Department's regulations providing that the Secretary shall determine 
that sales are made at different LOTs if they are made at different 
marketing stages.
    Petitioners argue that Hoogovens' end-user and service center 
customers are at different phases of marketing. In the second review, 
Hoogovens stated that steel service centers sell subject merchandise to 
the same types of end-user customers as Hoogovens, and concluded that 
end-user customers are further removed from Hoogovens' factory than the 
service centers. In this review, Hoogovens explained that its products 
are incorporated into the merchandise manufactured by the end-user 
customers, and that service centers function as distributors, who 
purchase steel from Hoogovens, and after slitting, rolling and/or 
cutting to length, sell essentially the same product to end-user 
customers.
    Petitioners note that in the final results of the second review, 
the Department agreed with petitioners that end-users and service 
centers/distributors constitute different phases of marketing. Certain 
Cold-Rolled Carbon Steel Flat Products from the Netherlands, 62 FR 
18476, 18480 (April 15, 1997). Petitioners argue that information on 
the record in this review supports the same finding: Hoogovens' product 
brochure states that Hoogovens advises its customers regarding the best 
processing options; in describing the company's research activities, 
the brochure states that car manufacturers involve Hoogovens in the 
design of new cars, and that Hoogovens advises manufacturers on which 
steel types and qualities are best for their production process. 
Section A Response at Exhibit A-14, pp. 10-11 (Public Version).

[[Page 13206]]

    Petitioners point out that Hoogovens claimed in this review that it 
is frequently aware of the nature of the product required by the end-
user customers of its service center customers, and those downstream 
customers' processing capabilities, in order to provide the correct 
quality of steel. On this basis, Hoogovens claimed that it must supply 
the same support functions to service centers as to end-user customers. 
However, petitioners note, in the second review Hoogovens stated that 
steel service centers purchase steel from Hoogovens without having 
identified an end-user customer at the time of purchase. Hoogovens also 
stated that it provides far greater sales assistance to its end-user 
customers than to its service center customers, because the service 
centers do not know the ultimate use of the product at the time of 
purchase from Hoogovens. Petitioners point out that Hoogovens has not 
described any changes in the function or business of its service center 
customers that would explain these contradictory statements.
    Petitioners argue that the Department should not assume from a 
respondent's failure to come forward with detailed information that 
there are no differences in selling functions, because it may be in the 
respondent's interest to refrain from claiming a LOT adjustment.
    Hoogovens denies that respondents who do not claim different LOTs 
have a burden to prove the negative, i.e., that no different LOTs 
exist. According to Hoogovens, the Department's practice is to verify 
the submitted data to ensure that respondent's position accurately 
reflects its sales practices. In the current review, Hoogovens argues, 
the Department asked extensive supplemental questions on the LOT issue, 
to which Hoogovens responded fully, and which the Department verified. 
Hoogovens claims that in virtually every other steel case in which the 
issue has arisen, the Department has concluded that the respondent's 
sales to end-users and steel service centers have been made at the same 
LOT.
    According to Hoogovens, petitioners' entire LOT argument appears to 
be based on the facts of the second administrative review, rather than 
on the evidence on the record in this review. However, Hoogovens points 
out, petitioners fail to note that the Department concluded that 
Hoogovens export price (EP) sales and home market sales were made at a 
single LOT. The Department has consistently found in steel cases that 
sales to end-users and service centers, while representing sales at 
different phases of marketing, are not at different LOTs.
    Hoogovens argues that petitioners' quotations from Hoogovens' 
product brochures are irrelevant on the grounds that advertising 
brochures are general descriptions of a company's operations and cannot 
constitute persuasive evidence of actual selling functions performed 
for different customers. According to Hoogovens, petitioners' arguments 
regarding different LOTs are almost entirely focused on alleged 
different selling functions performed by Hoogovens for automotive 
customers, rather than on differences between other end-users and 
service centers. Petitioners omit that the functions performed for 
automotive customers are also described in the brochures as available 
for other customers. Product/market development employees are described 
as working closely with sales teams, product line employees and R&D to 
deliver the best possible product without regard to customer category. 
Hoogovens claims this is consistent with its statement in its 
Supplemental Response (January 24, 1997, at 7) that ``it is 
increasingly important for Hoogovens to provide as much product 
development assistance as possible to its steel service center 
customers to enable the service centers to maintain their relationships 
with their end-user customers.''
    Petitioners also argue that there are price differences by LOT. 
According to Hoogovens, the Department has consistently held that price 
differences are, by themselves, not sufficient to justify a finding of 
different LOTs. Hoogovens cites AFBs 1997, 62 FR at 2109, where the 
Department stated: ``In any event, differences in prices do not 
determine the existence of levels of trade.'' Hoogovens further argues 
that as petitioners have allegedly failed to establish that there are 
different LOTs based on Hoogovens' selling functions, the Department 
need not consider the relevance of differences in price levels. 
Moreover, Hoogovens points out that petitioners have not argued that 
there is any consistent pattern of price differences on Hoogovens 
reported EP sales. Hoogovens therefore concludes that petitioners' 
arguments cannot sustain a finding that there are different LOTs in the 
U.S. market. Further, to the extent that petitioners are arguing that 
there is one LOT in the U.S. market and two LOTs in the home market, 
Hoogovens points out that petitioners have not explained to which 
alleged home market LOT the U.S. LOT should be matched, or how the 
Department should make any LOT adjustment between the U.S. LOT and 
either of the two alleged home market LOTs.
    In its January 16, 1998, response to a supplemental questionnaire 
issued by the Department, Hoogovens reiterated prior claims that it 
provides services based on the ultimate end use of the product rather 
than the identity or category of the customer, and that it provides the 
same services to all customers in the home market. Hoogovens maintains 
that it is frequently aware of the nature of the end-use for which its 
products are required. Hoogovens also provided examples of its product 
development activities.
    Petitioners commented on this response on January 30, 1998. 
Petitioners continue to argue that Hoogovens failed to substantiate its 
allegation that all of its customers were at the same LOT. Petitioners 
claim that Hoogovens' response consists of vague, unsupported 
assertions, tallies of customer visits and a small selection of 
customer visit reports that were chosen by Hoogovens to support its 
claim.
    Department's Position: Under the URAA, a level of trade adjustment 
can increase or decrease normal value. SAA at 159. Accordingly, the SAA 
directs Commerce to ``require evidence from the foreign producers that 
the functions performed by the sellers at the same level of trade in 
the U.S. and foreign markets are similar, and that different selling 
activities are actually performed at the allegedly different levels of 
trade.'' Id. (Emphasis added). See also Small Diameter Circular 
Seamless Carbon and Alloy Steel Standard, Line and Pressure Pipe From 
Germany: Preliminary Results of Antidumping Duty Administrative Review, 
62 Fed. Reg. 47446, 47450 (September 9, 1997). Thus, to properly 
establish the LOT of the relevant sales, Commerce specifically requests 
LOT information in every antidumping proceeding conducted under the 
URAA, regardless of whether a respondent sells solely to one nominal 
customer category, such as service centers or end-users. Moreover, 
consistent with that approach, we note that of necessity, the burden is 
on a respondent to demonstrate that its categorizations of LOT are 
correct. Respondent must do so by demonstrating that selling functions 
for sales at allegedly the same level are substantially the same, and 
that selling functions for sales at allegedly different LOTs are 
substantially different.
    As a matter of policy, the Department cannot allow respondents to 
form their own conclusions on LOT and then submit the data to support 
their conclusions. Rather, it is the Department's responsibility, not 
respondent's, to determine LOTs. It is

[[Page 13207]]

not that respondents have the burden to ``prove the negative,'' as 
Hoogovens states, but that respondents have a burden to demonstrate 
that there is only one LOT. We make no presumption as to the number of 
LOTs in a market. Rather, the respondent must provide information which 
satisfactorily demonstrates what LOTs exist. Respondent's failure in 
this case to provide detailed LOT information leads the Department to 
conclude that it has not met its burden of proof to demonstrate that 
there is in fact only one LOT, particularly in light of other 
information indicating the existence of two LOTs.
    To make a proper determination as to whether home market sales are 
at a different LOT than U.S. sales, the Department examines whether the 
home market sales are at different stages in the marketing process than 
the U.S. sales. We review and compare the distribution systems in the 
home market and U.S. export markets, including selling functions, class 
of customer, and the extent and level of selling expenses for each 
claimed LOT. An analysis of the chain of distribution and of selling 
functions substantiates or invalidates claimed LOTs based on customer 
classifications. Different LOTs necessarily involve differences in 
selling functions, but differences in selling functions, even 
substantial ones, are not alone sufficient to establish a difference in 
the LOT. Different LOTs are characterized by purchasers at different 
places in the chain of distribution and sellers performing 
qualitatively or quantitatively different functions in selling to them.
    When we compare U.S. sales to home market sales at a different LOT, 
we make a level-of-trade adjustment if the difference in LOT affects 
price comparability. We determine any effect on price comparability by 
examining sales at different LOTs in a single market, the home market. 
To quantify the price differences, we calculate the difference in the 
average of the net prices of the same models sold at different LOTs. We 
use the average difference in net prices to adjust the NV when it is 
based on a LOT different from that of the export sale. If there is a 
pattern of no price differences, then the difference in LOT does not 
have a price effect, and no adjustment is necessary.
    As stated above, the Department begins its LOT analysis with an 
examination of the different distribution systems, or channels of 
trade. Normally, transactions at different LOTs occur at different 
points in the distribution system, which is reflected in the commercial 
designation of customer categories, such as distributor or service 
center, and the selling functions that support such commercial 
designations. In the present case, Hoogovens sold to end-users and 
service centers in both the U.S. and home markets. It is undisputed 
that these transactions constitute sales through different channels of 
trade.
    With respect to the selling functions performed, we conducted a 
comprehensive examination of the available information provided by 
Hoogovens in this case. The Department requested information on selling 
functions in the original questionnaire and two supplemental 
questionnaires. Based upon the information submitted on the record, we 
are unable to determine conclusively whether the specific selling 
functions performed by Hoogovens with respect to sales to the service 
centers and end-users reflect sales at the same LOT.
    In this review, Hoogovens has repeatedly claimed that it provides 
the same technical and warranty services to all customers in all 
markets. See e.g., January 24, 1997 response at 7. However, as the 
Department has stated, different LOTs may be established where a 
respondent performs functions that are the same with respect to all 
markets and all customers, as Hoogovens claims in this case. The 
critical element in such a case is the degree to which the selling 
functions are performed.
    Significantly, on this important issue, Hoogovens stated in the 
previous review that ``increased quality assurance and product 
development assistance'' may be the basis for treatment of end-user 
sales and service center sales as different LOTs. January 24, 1997 
response at 12-13 (citing to its Section A response in the 1994-95 
review). In this review, Hoogovens claims that the quantitative aspect 
of the selling functions performed varies only by customer, not 
customer category. Hoogovens also states that the services performed 
vary based upon the end-use of the product, but that performance of the 
same services does not vary by customer category. Id. at 11.
    The statements and evidence Hoogovens has elected to place on the 
record indicate an ability to isolate data on selling functions and 
determine how they vary in kind and degree by customer category or end-
use. Despite that apparent ability, Hoogovens declined to provide all 
of the detailed information which the Department requested for purposes 
of conducting a LOT analysis. As noted above, respondent's failure to 
provide detailed LOT information has left the Department with an 
inadequate record on this issue. For example, the Department 
specifically requested that Hoogovens ``describe in detail the nature 
and extent of the selling functions performed.'' January 24, 1997 
response at 9. The Department required that ``[f]or each selling 
function, describe in detail whether it is performed to a greater 
degree, or in a different manner, depending on customer type.'' Id. By 
its own admission, Hoogovens performed varying levels of technical and 
quality assurance assistance. Nevertheless, Hoogovens did not provide 
the information necessary for the Department to make a proper 
evaluation of LOT and assess the assertions made by Hoogovens. Because 
Hoogovens has not provided an adequate explanation of the services it 
performs, nor demonstrated that variations in services supplied are not 
related to customer category, the Department is unable to assess the 
validity of Hoogovens' claim that it performs the same services for all 
customers in all markets.
    Furthermore, other evidence on the record suggests that there are 
different selling functions performed based on customer category in 
this case. For example, while Hoogovens claims to provide the same 
support to all customers, it acknowledges that one large service center 
customer in the home market has itself received several important 
quality certifications in the automotive and other industries. 
Hoogovens claims that these certifications require assurance of 
chemical and mechanical properties. However, other information on the 
record shows that this customer also provides special delivery 
services, as well as further manufacturing. In addition, this customer 
itself guarantees the quality of its products and has a metallurgist on 
its staff. All of this suggests that there is less need for Hoogovens 
to provide technical support services to this service center and its 
customers than to Hoogovens' own end-user customers. Further, despite 
our requests, Hoogovens did not provide any detailed analysis or 
description of the precise nature of product research and technical 
support Hoogovens provides to various customers and amount of expenses 
incurred.
    Further, Hoogovens' responses appear contradictory. Hoogovens 
claims that its quality assurance department has the same 
representatives assigned to all home market customers. See January 16, 
1998 submission at 19. But Hoogovens also states that quality assurance 
representatives are assigned on the basis of the ultimate application 
of the

[[Page 13208]]

product. Id. The Department is unable to determine how these 
representatives are assigned and whether their assignments reflect a 
greater level of technical and quality assurance assistance to end-
users and whether greater expenses are incurred for either service 
centers or end-users. Moreover, Hoogovens has stated (1) that service 
centers frequently do not know the end-use of the product at the time 
of purchase from Hoogovens and (2) that service centers assume the risk 
of finding a customer for the material. See January 24, 1997 submission 
at 14. These statements demonstrate that Hoogovens frequently does not 
know the identity of the service center's customer and thus cannot 
provide technical services in support of such sales. Rather, these 
statements support Hoogovens' earlier position that it provides far 
greater sales assistance to end-user customers than to its service 
center customers.
    Finally, we find the evidence concerning the number of visits to 
customers and the meetings with customers to be unpersuasive. The 
number of visits is not a useful tool for examination. In some 
instances, Hoogovens has common customers with service centers, thereby 
confusing the issue of whether the visit relates to products purchased 
from Hoogovens or from the service center. Second, the evidence on 
meetings with customers submitted by Hoogovens does not establish that 
technical services and quality assurance assistance are ``the same for 
all customers.'' A comparison of the selling functions performed based 
upon a full description of such functions is necessary for the 
Department to make that conclusion. Further, the limited number of 
reports relative to the size of the customer base does not provide an 
adequate reflection of the circumstances in this case and cannot 
substitute for the description of the selling functions requested by 
the Department. Thus, Hoogovens has failed to meet its burden of proof 
establishing that there is only one LOT in the home market.
    In sum, the evidence on the record demonstrates that, both in the 
home market and in the United States, sales occur at two different 
stages in the marketing process and to two different customer 
categories (i.e., service centers and end-users). Significantly in this 
case, the Department has also determined that a pattern of consistent 
price differences exists with respect to sales occurring at these two 
different stages of marketing in the home market. In fact, Hoogovens 
has acknowledged that one primary factor governing prices charged to 
end-users and service centers is the ``historic commercial reasons 
related to the relative functions of service centers and end-users.'' 
January 24, 1997 submission at 13. Therefore, on the basis of the facts 
available, we are treating EP and home market sales to end-users as a 
different LOT than home market sales to service centers. Further, since 
the basis for distinguishing LOT is the provision of technical and 
warranty services, and the LOT of the CEP sales is the LOT of the 
affiliated service centers, we are treating all CEP sales as sales to 
service centers and this LOT as equivalent to the home market service 
center LOT. Where it is not possible to match a U.S. sale to a home 
market sale at the same LOT, we have made a LOT adjustment based on our 
comparison of the weighted-average net prices, by product, of 
merchandise sold in the home market to service centers to the weighted-
average net prices, by product, of merchandise sold to end-users. When 
a U.S. sale to an end-user is compared to a home market sale to a 
service center, the NV is adjusted upward; conversely, when a U.S. sale 
to a service center is compared to a home market sale to an end-user, 
the NV is adjusted downward. The CEP offset issue is addressed in the 
following comment.
    Comment 3: Hoogovens argues that in the preliminary results the 
Department improperly failed to make a CEP offset adjustment to NV 
pursuant to section 773 (a)(7)(B) of the Act when comparing Hoogovens' 
reported CEP sales to NV, and that this failure was based on a 
misunderstanding of the facts of this review and on a misinterpretation 
of both the statute and the Department's current practice.
    As the Department explained in the preliminary results, in 
identifying the LOT for CEP sales, its current policy is to consider 
only the selling activities reflected in the U.S. price after deduction 
of expenses and profit under section 772(d) of the Act. 62 FR 47421. In 
comparing the CEP LOT to home market sales, the Department considers 
the selling functions reflected in the starting price of the home 
market sales before any adjustments. According to Hoogovens, the 
Department makes a CEP offset when it finds after this comparison that 
the unadjusted home market price is at a more advanced LOT than the 
adjusted CEP.
    Hoogovens argues that the Department's conclusion in the 
preliminary results that there were no differences between the adjusted 
CEP and the unadjusted home market price is not supported by the facts. 
62 FR 47421. Hoogovens claims that in this case, this comparison 
``necessarily results in a comparison of sales at different levels of 
trade,'' because the starting price of the home market sales includes 
``many selling activities not reflected in the adjusted CEP price.'' 
These include indirect selling activities, indirect warranty and 
technical service expenses, and freight and delivery arrangements. All 
of these types of expenses, incurred both in the Netherlands and the 
United States, have been deducted from the net CEP used to establish 
the LOT for CEP sales. Hoogovens concludes that the home market LOT 
must be deemed to be a different, more advanced LOT than the adjusted 
CEP LOT. Case Brief at 10.
    Hoogovens further argues that there were no sales in the home 
market at a LOT equivalent to the CEP LOT, and that all sales in the 
home market were at the same LOT. Hoogovens concludes that in the 
absence of data to quantify a LOT adjustment to account for the 
difference between the CEP LOT and the home market LOT, the Department 
should make a CEP offset adjustment to NV. Case Brief at 11.
    Petitioners argue that the Department properly denied a CEP offset 
adjustment, inasmuch as Hoogovens has failed to provide information in 
the current review that would allow the Department to determine what 
selling functions are reflected in the price of either home market 
sales or the adjusted CEP. The Department's questionnaire instructed 
Hoogovens to provide a chart showing all selling functions provided for 
each customer category, and a list separately reporting those expenses 
deducted from U.S. price, with a narrative explanation detailing each 
selling function noted within each customer group. Questionnaire at 
Addendum I (Question 9.B.). Hoogovens failed to provide any chart 
regarding CEP sales, or any list or meaningful narrative separately 
detailing the expenses and selling functions deducted from U.S. price. 
See Section A Response at 20 (Public Version). Petitioners argue 
further that Hoogovens also failed to provide any meaningful analysis 
of whether its selling functions performed in the Netherlands for its 
U.S. sales were associated with economic activities in the United 
States, whether these functions related to the sale to the unaffiliated 
customer, and whether the expenses associated with these functions 
should be deducted from CEP. Petitioners therefore conclude that the 
Department has no basis to determine that there is a distinct CEP LOT.
    Petitioners further comment that none of the three selling 
activities cited by Hoogovens, i.e., indirect selling activities, 
indirect warranty and

[[Page 13209]]

technical service expenses, and freight and delivery arrangements, 
provides any basis for treating the CEP as a distinct LOT. In the first 
place, petitioners point out, the Department did not deduct ``indirect 
selling activities'' incurred in the Netherlands from CEP. See 
Preliminary Results, 62 FR at 47419. This was one of the reasons the 
Department did not allow an offset in the preliminary results--namely, 
because of its finding that the indirect selling functions incurred at 
the sales office in IJmuiden were common to both the adjusted CEP and 
the home market price.
    Second, petitioners continue, Hoogovens' warranty and technical 
service expenses are not properly considered as indirect expenses at 
all. Accordingly, the Department may choose to account for such 
expenses under the circumstance of sale provision, in which case they 
are not removed from the adjusted CEP for purposes of the LOT analysis. 
Even if they are removed from the adjusted CEP, petitioners point out 
that Hoogovens has not shown that the significance of these functions 
would justify a finding of different LOTs.
    Finally, petitioners argue, costs and expenses associated with 
freight and delivery are not deducted under section 772(d) and thus are 
not removed from the adjusted CEP for purposes of the LOT analysis. 
Neither are they removed from the home market price for purposes of 
that analysis. See the Department's regulations, 62 FR at 27370; 19 
U.S.C. Sec. 1677b(a)(6). Petitioners conclude that Hoogovens' assertion 
that these expenses are reflected in the home market starting price but 
deducted from the adjusted CEP is therefore false; on the contrary, 
such expenses are common to both the adjusted CEP and the starting 
price in the home market, and provide no basis for a CEP offset 
adjustment.
    Department's Position: Section 773(a)(7)(B) of the Act provides for 
a CEP offset when: (1) NV is determined at a different LOT than the CEP 
LOT; and (2) the data available do not provide an appropriate basis for 
quantifying the amount of a LOT adjustment. Section 351.412(f)(1) of 
the Department's new regulations (62 FR 27296; May 19, 1997) provides 
that the Department will grant a CEP offset only where NV is determined 
at a more advanced LOT than the CEP LOT, and despite the fact that 
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. ``More advanced LOT'' 
refers to a more advanced stage of marketing, which generally means 
that the home market LOT is more remote from the factory door than the 
CEP LOT. A more advanced, or remote, LOT is typically characterized by 
more selling activities and greater selling expenses.
    Section 773(a)(7)(B) of the Act defines the CEP offset as the 
amount of ISE included in NV, up to the amount of ISE deducted in 
calculating the CEP. ISE in the CEP offset are selling expenses, other 
than direct selling expenses or assumed expenses, that the seller would 
incur regardless of whether particular sales were made, but that are 
attributable, in whole or in part, to such sales.
    We adjusted the starting prices of the affiliated service center's 
sales to their first unaffiliated customers by deducting U.S. selling 
expenses, costs of further manufacturing and an amount for profits, 
which yields an estimate of the prices Hoogovens would have charged the 
service centers if they were not affiliated.
    Hoogovens has suggested that the CEP is in effect an ex-factory 
transfer price to its U.S. affiliate. This is an inaccurate 
characterization for several reasons. First, transfer prices do not 
enter into our analysis because the CEP is a calculated price derived 
from the price to the first unaffiliated customer in the United States. 
Second, the deductions we make under section 772(d) of the Act do not 
include all possible direct and indirect selling expenses. These 
deductions remove only expenses associated with economic activities in 
the United States that support the U.S. resale. The CEP is not a price 
exclusive of all selling expenses because it contains the same type of 
selling expenses as a directly observed export price. Accordingly, the 
Department's new regulations clearly direct us not to deduct from the 
starting price any expense ``related solely to the sale to an 
affiliated importer in the United States,'' i.e., those expenses that 
support the sale from the exporter to its U.S. affiliate. 19 CFR 
351.402. We may, however, make a circumstances of sale adjustment to 
normal value for such expenses, if they are direct expenses, under 
section 773(a)(6)(C)(iii) of the Act.
    Petitioners correctly observe that Hoogovens did not answer the 
Department's questions on LOT with regard to CEP sales, and did not 
provide an analysis of selling functions associated with CEP sales, nor 
show how they differ from home market sales. Consequently, the 
Department has based its analysis in the final results on the facts 
otherwise on the record in this review.
    In calculating CEP, the Department deducted the imputed credit 
expenses incurred by the Rafferty-Brown companies as direct selling 
expenses. Hoogovens' affiliated companies did not report any warranty 
or technical service expenses for the U.S. resales, and we did not 
deduct any allocated warranty expenses incurred in the Netherlands for 
sales to the Rafferty-Brown companies. In accordance with section 
772(d)(1), the Department deducted ISE and imputed inventory carrying 
costs (``ICC'') incurred in the United States by the Rafferty-Brown 
companies for sales to the first unaffiliated buyers to arrive at the 
CEP. For the final results of this review, the Department did not 
deduct ISE and ICC incurred in the Netherlands, nor expenses of the 
U.S. sales office from the adjusted CEP on the grounds that these are 
expenses associated with the sale to Hoogovens' U.S. affiliates, rather 
than with the sales by the affiliates to the first unaffiliated buyers. 
Thus, the CEP includes Hoogovens' warranty and technical service 
expenses for U.S. sales, as well as ISE, including the expenses of the 
sales offices in IJmuiden and New York, and ICC incurred in connection 
with the sale to the affiliated service center.
    Hoogovens' starting price for home market sales includes direct 
warranty and technical service expenses, ICC, the expenses of the sales 
office in IJmuiden, and other indirect selling expenses incurred for 
home market sales. Thus, for the purposes of the LOT analysis, there is 
no distinguishable difference between the selling functions included in 
the home market starting price and the selling functions included in 
the CEP. On the basis of this analysis, the Department has determined 
that there is no basis for Hoogovens' claim that home market sales are 
at a different, more advanced LOT than the adjusted CEP sales. When a 
CEP sale could not be matched to a home market sale to a service 
center, we made a LOT adjustment. Therefore, the issue of a CEP offset 
is moot.
    Comment 4: Hoogovens claims that the Department's decision in the 
preliminary results to deny an offset to the reported U.S. ISE for the 
cost of financing cash deposits of estimated antidumping duties during 
the POR is incorrect, and that the Department should continue to grant 
this adjustment for the reasons stated in the bearings determinations. 
See 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; Final Results of 
Antidumping Duty

[[Page 13210]]

Administrative Reviews and Termination in Part, 62 FR 11825, 11826-30 
(March 13, 1997).
    Hoogovens cities the preliminary results of this review, in which 
the Department stated that there may not be opportunity costs 
associated with paying cash deposits and that some respondents may not 
require loans to cover deposits. 62 FR at 47419 (September 9, 1997). 
Under this rationale, according to Hoogovens, the Department should not 
make adjustments for the opportunity costs of carrying either inventory 
or credit. Hoogovens argues that the opportunity cost of tying 
considerable sums up as cash deposits exists regardless of whether a 
loan must be obtained to cover the cost.
    Petitioners urge the Department to adhere to its decision to deny 
this adjustment, supporting the Department's arguments that it is 
unclear that opportunity costs are incurred, given the fungibility of 
money, and that borrowing funds for one activity may simply mean that 
funds need not be borrowed for another activity. Petitioners argue that 
the difficulty in determining whether such opportunity costs exist, how 
such costs (if any) should be quantified, and whether such costs are 
appropriately accounted for in the calculation of ISE, makes an 
adjustment inappropriate. Petitioners contend that the Department has a 
longstanding policy of not making an adjustment to account for the time 
value of every deduction from sales price, such as freight charges, 
rebates, etc. Similarly, petitioners deduce, the multitude of 
arrangements whereby cash deposits are paid would make an inquiry into 
opportunity costs associated with such deposits extraordinarily 
complicated and in all likelihood inaccurate.
    Petitioners further argue that the obligation to pay cash deposits 
arises only where a respondent has engaged in unfair trade activity in 
the United States, something that is within the respondent's control. 
Moreover, under the statute, interest accrues only for any overpayment 
or underpayment of cash deposits, meaning that the importer does not 
receive interest for the amount of its deposits that reflect the duty 
finally determined. As such, petitioners argue, the payment of cash 
deposits cannot be seen merely as an expense incident to an antidumping 
proceeding, such as lawyers' fees; rather, such payment reflects a 
current obligation resulting from a respondent's unfair trading 
activity in the United States. In petitioners' view, allowing a 
respondent to reap a benefit in its margin calculation based on payment 
of such deposits would be inconsistent with the fundamental goal of the 
statute--i.e., to discourage unfair trade and provide a level playing 
field on which domestic producers can compete.
    According to petitioners, the facts of the present case demonstrate 
why an adjustment for interest in financing cash deposits is 
inappropriate: Hoogovens has sought to reduce the ISE of the Rafferty-
Brown companies (Hoogovens' affiliated U.S. service centers) based on 
``imputed'' interest in financing cash deposits, notwithstanding the 
fact that neither company ever paid any cash deposits. In fact, 
petitioners point out, Hoogovens acknowledged that ``HSUSA, as sales 
agent and importer of record for Hoogovens' sales, paid cash deposits 
on entries for sales during the period of review, using funds 
transferred periodically by HSBV to HSUSA for that purpose.'' 
Hoogovens' Response to the Department's Supplemental Questionnaire 
(Public Version, June 26, 1997 at 1).
    Petitioners argue that the Rafferty-Brown companies incurred no 
expenses, imputed or otherwise, related to the payment of cash 
deposits, and there is no basis in fact or logic for making any 
adjustment to their ISE. Petitioners conclude that Hoogovens' claim 
points to a fundamental defect in the Department's past practice: 
parties could claim adjustments without any showing that they incurred 
opportunity costs, that such costs have any relationship to their 
reported ISE, or how such costs may be quantified.
    Department's Position: We agree with petitioners that we should 
deny an adjustment to Hoogovens' U.S. ISE for expenses which Hoogoven's 
claims are related to the financing of cash deposits. The statute does 
not contain a precise definition of what constitutes a selling expense. 
Instead, Congress gave the administering authority discretion in this 
area. It is a matter of policy whether we consider there to be any 
financing expenses associated with cash deposits. We recognize that we 
have, to a limited extent, allowed deductions of such expenses in past 
reviews of the orders on AFBs. However, we have reconsidered our 
position on this matter and have concluded that this practice is 
inappropriate.
    We have long maintained, and continue to maintain, that antidumping 
duties, and cash deposits of antidumping duties, are not expenses that 
we should deduct from U.S. price. To do so would involve a circular 
logic that could result in an unending spiral of deductions for an 
amount that is intended to represent the actual offset for the dumping. 
We have also declined to deduct legal fees associated with 
participation in an antidumping case, reasoning that such expenses are 
incurred solely as a result of the existence of the antidumping duty 
order. Antifriction Bearings (Other Than Tapered Roller Bearings) and 
Parts Thereof From France, et al.; Final Results of Antidumping Duty 
Administrative Reviews, 57 FR 28360 (June 24, 1992). Underlying our 
logic in both these instances is an attempt to distinguish between 
business expenses that arise from economic activities in the United 
States and business expenses that are direct, inevitable consequences 
of the antidumping duty order.
    Financial expenses allegedly associated with cash deposits are not 
a direct, inevitable consequence of an antidumping duty order. As we 
stated in the preliminary results: ``money is fungible within a 
corporate entity. Thus, if an importer acquires a loan to cover one 
operating cost, that may simply mean that it will not be necessary to 
borrow money to cover a different operating cost.'' See Preliminary 
Results at 47,419. Companies may choose to meet obligations for cash 
deposits in a variety of ways that rely on existing capital resources 
or that require raising new resources through debt or equity. For 
example, companies may choose to pay deposits by using cash on hand, 
obtaining loans, increasing sales revenues, or raising capital through 
the sale of equity shares. In fact, companies face these choices every 
day regarding all their expenses and financial obligations. There is 
nothing inevitable about a company having to finance cash deposits and 
there is no way for the Department to trace the motivation or use of 
such funds even if it were inevitable.
    In a different context, we have made similar observations. For 
example, we stated that ``debt is fungible and corporations can shift 
debt and its related expenses toward or away from subsidiaries in order 
to manage profit'' (see Ferrosilicon from Brazil; Final Results of 
Antidumping Duty Administrative Review, 61 FR at 59412, regarding 
whether the Department should allocate debt to specific divisions of a 
corporation).
    So, while under the statute we may allow a limited exemption from 
deductions from U.S. price for cash deposits themselves and legal fees 
associated with participation in dumping cases, we do not see a sound 
basis for extending this exemption to financing expenses allegedly 
associated with financing cash deposits. By the same token, for the 
reasons stated above,

[[Page 13211]]

we would not allow an offset for financing the payment of legal fees 
associated with participation in a dumping case.
    Finally, we also determine that we should not use an imputed amount 
that would theoretically be associated with financing of cash deposits. 
There is no real opportunity cost associated with cash deposits when 
the paying of such deposits is a precondition for doing business in the 
United States. Like taxes, rent, and salaries, cash deposits are simply 
a financial obligation of doing business. Companies cannot choose not 
to pay cash deposits if they want to import nor can they dictate the 
terms, conditions, or timing of such payments. By contrast, we impute 
credit and inventory carrying costs when companies do not show an 
actual expense in their records, because companies have it within their 
discretion to provide different payment terms to different customers 
and to hold different inventory balances for different markets. We 
impute costs in these circumstances as a means of comparing different 
conditions of sale in different markets.
    Comment 5: Petitioners argue that the Department should change its 
methodology for calculating profit for CV and CEP and revert to the 
method used in the previous review, accepting Hoogovens' reported 
profit for CV, which Hoogovens calculated by subtracting the weighted-
average actual cost from the weighted-average net price for home market 
sales of subject merchandise during the POR. Hoogovens divided the 
profit per ton by the weighted-average actual cost to arrive at the 
reported profit rate. Petitioners object that instead of using 
Hoogovens' reported profit rate, the Department calculated it using the 
1995 Profit and Loss Statement for Hoogovens' Steel Division with 
respect to the same general category of products as the subject 
merchandise, which was the same source the Department used to calculate 
the CEP profit ratio under section 772(d)(3) of the Act.
    Petitioners argue that the Department's recalculation of the CV 
profit figure is unreasonable, and does not account for the actual 
amounts incurred for profits in connection with the production and sale 
of the foreign like product, as required by the statute. In addition, 
petitioners claim, the Department's use of a financial report that 
includes non-subject merchandise to calculate the CEP profit ratio is 
unnecessary and inconsistent with the statutory preference for 
information relating only to the subject merchandise and foreign like 
product. 19 U.S.C. Sec. 1677a(f)(2)(C). Further, petitioners argue, 
there is no reason why the Department should use the same profit figure 
for both CV and CEP, particularly given that the two figures are 
typically calculated on a different basis. Petitioners claim that 
Hoogovens' sales and CV files contain all of the information needed to 
calculate the CEP profit ratio, with the exception of the cost of goods 
sold of merchandise sold in the home market, and that this figure can 
be obtained using the data supplied by Hoogovens in its calculation of 
CV profit.
    Hoogovens argues that the Department's calculation of CEP profit 
was consistent with its policy bulletin, Calculation of Profit for 
Constructed Export Price Transactions, Policy Bulletin No. 97/1 
(September 4, 1997), and should not be changed for the final results. 
This bulletin explains that section 772(f) of the Act provides a 
hierarchy of three alternative methods for calculating CEP profit and 
that the first of these alternatives ``reflects the expense data 
available to the Department when conducting a sales below cost 
investigation.'' Id. at 4. Hoogovens points out that since there is no 
below-cost investigation in this case, the Department must use the next 
alternatives, described in the policy bulletin as ``expense and profit 
information derived from financial reports provided by the 
respondent.'' As explained in the Department's analysis memorandum, the 
Department therefore ``derived total profit and total expenses from the 
audited 1995 profit and loss statement of Hoogovens' steel division 
(Hoogovens Staalbedrijf),'' which was the ``narrowest category for 
which [the Department] had information on the record in this review.'' 
Analysis Memorandum (September 2, 1997) at 7.
    Hoogovens also argues that petitioners' suggested methodology of 
using information from Hoogovens' CV files to calculate the cost of 
goods sold in the home market may be inaccurate because of differences 
in product mix and timing.
    Department's Position: We disagree with petitioners that we should 
use cost data from the CV file to calculate CEP profit. The calculation 
of total actual profit under section 772(f)(2)(D) of the statute 
includes all revenues and expenses resulting from the respondent's U.S. 
sales and home market sales. However, the calculated profit for CV is 
only the profit on Hoogovens' home market sales of subject merchandise. 
It is also inappropriate to use the calculated weighted-average cost 
for CV as a substitute for the cost of goods sold in the home market, 
as it includes only the costs of the products sold to the U.S. market, 
and thus is not representative of the home market product mix. 
Moreover, because Hoogovens sells to some customers under long-term 
contracts, the period for reporting home market sales is much longer 
than the POR. Consequently, there may be more variation in the costs of 
home market sales than in the costs of U.S. sales, even for the same 
products. However, the Department agrees with petitioners that it 
should use the CV profit submitted by Hoogovens to calculate CV instead 
of the profit rate the Department calculated for the preliminary 
results, because the former more accurately reflects the scope of 
merchandise covered in this review. For the final results, the 
Department used the weighted average profit from the audited 1995 and 
1996 profit and loss statements of Hoogovens' steel division to 
calculate CEP profit, and Hoogovens' reported CV profit ratio to 
calculate CV.
    Comment 6: Hoogovens argues that the Department improperly deducted 
from CEP expenses incurred in the Netherlands that are attributable to 
U.S. sales. For the preliminary results, the Department recalculated 
Hoogovens' reported ISE to exclude ISE incurred in the Netherlands and 
allocated to U.S. sales of subject merchandise, on the grounds that 
they did not relate to economic activities in the United States. 62 FR 
at 47419. The Department then deducted from CEP the expenses of 
Hoogovens' U.S. sales office and warranty expenses for U.S. sales 
claimed as indirect. According to Hoogovens, these expenses were not 
incurred with respect to sales by the Rafferty-Brown companies to the 
first unaffiliated customers, and these expenses should therefore not 
be deducted from CEP.
    Hoogovens cites the Statement of Administrative Action Accompanying 
the Uruguay Round Agreements (SAA) as stating that CEP will be 
calculated by reducing the price of the first sale to an unaffiliated 
customer in the United States by certain expenses and profit associated 
with economic activities occurring in the United States. SAA at 823. 
Hoogovens argues that the Department has consistently interpreted this 
provision to permit the deduction from CEP only of those expenses 
incurred with respect to the sale to the unaffiliated CEP customer. 
According to Hoogovens, the activities of its U.S. sales office, HSUSA, 
in connection with Hoogovens' U.S. sales are limited to the sales to 
the unaffiliated customer in the case of EP sales, and the sales to the 
affiliated Rafferty-Brown companies in

[[Page 13212]]

the case of CEP sales. Because HSUSA plays no role in the sales by the 
Rafferty-Brown companies to the unaffiliated customer, Hoogovens argues 
that the Department should not deduct HSUSA's expenses from U.S. price 
in CEP situations. See Grey Portland Cement and Clinker from Mexico: 
Final Results of Antidumping Duty Administrative Review, 62 FR 17148, 
17168 (April 9, 1997).
    Similarly, Hoogovens argues, warranty and technical service 
expenses incurred in the Netherlands for U.S. sales are incurred 
primarily with respect to EP sales and should therefore not be deducted 
in calculating U.S. price for CEP sales. Hoogovens claims that although 
some of these expenses were incurred in connection with sales to the 
Rafferty-Brown companies, these expenses were not related to the 
Rafferty-Brown companies' sales to the unaffiliated CEP customers. 
Hoogovens concludes that under the Department's interpretation of 
section 772(d), these expenses cannot be said to constitute economic 
activity in the United States.
    Petitioners argue that expenses incurred by HSUSA must be deducted 
from CEP, citing the statute's requirement that the CEP be reduced by 
``any selling expenses'' that are ``incurred by or for the account of 
the producer or exporter, or the affiliated seller in the United 
States, in selling the subject merchandise.'' 19 U.S.C. Sec. 1677a(d). 
According to petitioners, each of the cases Hoogovens relied upon in 
its argument dealt with ISE incurred in the home market, and the 
Department's practice is to deduct such expenses from CEP only where it 
finds that they are associated with U.S. economic activity, and that 
they do not relate solely to the sale to an affiliated importer. 
However, petitioners argue, none of the cases cited by Hoogovens holds 
that selling expenses incurred in the United States by a U.S. affiliate 
will not be deducted from CEP.
    Department's Position: We agree with respondent. The expenses 
deducted under section 772(d) of the Act and the profit associated with 
those expenses represent activities undertaken in the United States to 
support the U.S. resale to an unaffiliated customer. Generally, these 
activities are undertaken by the affiliated importer and occur after 
the transaction between the exporter and the importer.
    In the current case, the importer of record, HSUSA, is not a 
reseller. HSUSA does not take title to the subject merchandise; rather, 
in the case of CEP sales, the merchandise is shipped directly by 
Hoogovens to the affiliated service centers, the Rafferty-Brown 
companies. The Department's new regulations clearly direct us not to 
deduct from the starting price any expense ``related solely to the sale 
to an affiliated importer in the United States''; i.e., those expenses 
that support the sale from the exporter to its U.S. affiliate. 19 CFR 
351.402. In this case, the expenses incurred by HSUSA, which are 
consolidated with those of Hoogovens in the latters accounting system, 
are related to sales to the Rafferty-Brown companies and to export 
price sales. Hoogovens reported these expenses as part of the selling 
expenses incurred in the home market to support U.S. sales. Therefore 
for these final results, we have deducted only the reported ISE 
incurred by the Rafferty-Brown companies from CEP.
    Comment 7: Hoogovens argues that the Department's presumption that 
duty absorption will occur on those sales for which the Department 
found margins, together with its insistence that absorption can only be 
rebutted by evidence of a separate agreement that the unaffiliated 
customer will be responsible for antidumping duties, are contrary to 
Congress' intent that an analysis be performed to determine whether 
duty absorption is occurring. According to Hoogovens, had Congress 
intended that duty absorption would be presumed in all cases in which 
margins exist, Congress could have instructed the International Trade 
Commission (ITC) to assume that absorption occurred with respect to all 
sales on which margins were found, obviating the need for the 
Department to make an absorption determination.
    Hoogovens further argues that there is no basis in either law or 
logic for ignoring the majority of the sales on which no margins were 
found. According to Hoogovens, the issue of duty absorption must be 
based on an examination of the respondent's overall sales practices in 
the U.S. market, including all sales that are examined by the 
Department in its reviews. The antidumping law does not require that 
absorption be determined either on a sale-specific basis or solely by 
reference to sales on which margins exist. Hoogovens contends that the 
Department should not find that absorption is occurring where a 
respondent sells to unaffiliated customers at prices which are high 
enough to cover any antidumping duties that may be assessed on some of 
the respondent's sales. The downward trend in Hoogovens' margins should 
be considered as prima facie evidence that Hoogovens is passing 
antidumping duties on to its customers. Finally, Hoogovens concludes, 
given that it is collecting from its unaffiliated customers revenue in 
excess of the fair value of the subject merchandise that is more than 
twice the amount of the antidumping duties calculated in the 
preliminary results of this review, it is unreasonable to conclude that 
it is absorbing any of the antidumping duties to be assessed in this 
review.
    Petitioners argue that Hoogovens' objections are untimely and 
incorrect. In its preliminary results, the Department stated that if 
interested parties wish to submit evidence that the unaffiliated 
purchasers in the United States will pay the ultimately assessed duty, 
they must do so no later than 15 days after the publication of the 
preliminary results. 62 FR at 47422. Hoogovens submitted no evidence 
within the time allotted by the Department to rebut the presumption 
that absorption of antidumping duties is occurring. According to 
petitioners, in another case the Department specifically rejected the 
argument that it should consider sales with prices above fair value in 
conducting its absorption inquiry:

    We disagree * * * that negative and positive margins should be 
aggregated. * * * The Department treats so-called ``negative'' 
margins as being equal to zero in calculating a weighted-average 
margin because otherwise exporters would be able to mask their 
dumped sales with non-dumped sales. It would be inconsistent on one 
hand to calculate margins using positive margin sales which is the 
Department's practice, and then argue, in effect, that there are no 
margins because credit should be given for non-margin sales. Thus, 
those sales which are used to determine whether there are margins 
should also be used to determine whether there is duty absorption. 
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From the 
United Kingdom, Final Results of Antidumping Duty Administrative 
Reviews, 62 FR 18744, 18745 (April 17, 1997).

    Petitioners contend that the Department's policy makes perfect 
sense, in that under Hoogovens' approach, respondents could shield 
unfairly traded sales of a particular product through sales of other 
products that happen to be fairly traded. According to petitioners, 
this would open an enormous loophole in the law.
    Department's Position: We agree with petitioners for the reasons 
cited, and have not changed our approach for the final results of this 
review. We have determined that there are dumping margins on 93.0 
percent of Hoogovens' U.S. sales by quantity. In the absence of any 
information on the record that the unaffiliated purchasers in the 
United States will pay the ultimately assessed duties, the Department 
finds that respondent has absorbed antidumping duties on 93 percent of 
its U.S. sales.

[[Page 13213]]

Reimbursement

    Given the circumstances of this case, the Department has continued 
to reconsider and refine its policy on reimbursement pursuant to the 
reimbursement regulation. Accordingly, on December 18, 1997, the 
Department issued a supplemental questionnaire addressing the 
reimbursement issue. We requested that parties comment on the following 
proposed statement of policy:
    The Department continues to presume that exporters and producers 
1 do not reimburse importers for antidumping duties, 
absent direct evidence of such activity. However, where the 
Department determines in the final results of an administrative 
review that an exporter or producer has engaged in the practice of 
reimbursing the importer, the Department will presume that the 
company has continued to engage in such activity in subsequent 
reviews, absent a demonstration to the contrary. Accordingly, if the 
producer or exporter claims that the reimbursement situation no 
longer exists, such producer or exporter must satisfy the Department 
that (1) the importer is solely responsible for the payment of the 
antidumping duty, and (2) either (a) the importer was, and continues 
to be, financially able to pay the antidumping duties, or (b) a 
corporate event, such as a corporate restructuring or a capital 
infusion, enabled the importer to generate enough income to pay such 
duty. December 18, 1997 Supplemental Questionnaire.

    \1\ Manufacturer, producer, seller, or exporter, as set forth in 
19 CFR 351.402(f)(2).
---------------------------------------------------------------------------

    In its response dated January 16, 1998, Hoogovens argues that a 
presumption on the Department's part that reimbursement will recur if 
there is a finding of reimbursement in the final results of an 
administrative review is a radical departure from the express terms of 
the reimbursement regulation. According to Hoogovens, the express terms 
of the regulation permit the Department to presume reimbursement only 
in those cases where the importer fails to file a certificate prior to 
liquidation of entries stating that it has not been reimbursed for 
antidumping duties. Hoogovens claims that the inclusion in section 
353.26(c) of one instance in which reimbursement may be presumed would 
appear to exclude the Department's authority to apply other 
presumptions. In Hoogovens' view, to create a presumption found nowhere 
in the terms of the reimbursement regulation is also fundamentally 
inconsistent with the Department's application of the regulation, which 
in both this and other cases has turned on whether the factual 
circumstances satisfy the precise, literal language of the regulation.
    Secondly, Hoogovens argues that the presumption that reimbursement 
will occur in subsequent reviews is inconsistent with the Department's 
long-standing position that ``[e]ach antidumping review is a separate 
proceeding covering merchandise entering the United States during a 
specific time period, and the facts of each review are considered 
separately based on information submitted for that proceeding.'' 
Sulfanilic Acid from the People's Republic of China; Final Results and 
Partial Rescission of Antidumping Duty Administrative Review, 61 FR 
53702, 53707 (October 15, 1996). Hoogovens concludes that a departure 
from this rule in the present case would be contrary to the 
Department's obligation to administer the antidumping law in a fair and 
impartial manner, and could create a burdensome precedent.
    Hoogovens assumes that this presumption could not be permanent, and 
that it would reverse once the Department determined in the final 
results of an administrative review not to apply the reimbursement 
regulation. Establishing an essentially permanent presumption of 
reimbursement is particularly unfair, Hoogovens argues, where the 
burden with which the respondent is tasked involves proving the 
negative, that reimbursement has not occurred.
    Hoogovens asks the Department to amend the proposed statement of 
policy to eliminate any presumption which fails to maintain the 
integrity of the section 751 administrative review process, or at least 
to add the following sentence to the end of the policy statement:

    Where a respondent has successfully rebutted allegations of 
reimbursement for the final results of an administrative review, 
there will no longer be a presumption of reimbursement in the 
subsequent review.

    In their comments of January 30, 1998 on Hoogovens' January 16, 
1998 response, petitioners comment that placing the burden on 
respondent to demonstrate that reimbursement is not recurring is 
appropriate, given that respondents control all of the information 
relevant to a reimbursement determination and the facts may be 
extremely difficult to uncover, especially where the parties are 
affiliated. Petitioners argue that because much of the documentation 
and information regarding the reimbursement issue has first been placed 
on the record in the present review, it would be inappropriate to 
relieve Hoogovens of its burden to show that reimbursement is not 
recurring, based merely on the Department's decision in the previous 
review. Given the difficulty of uncovering a reimbursement scheme, 
petitioners argue, a respondent found to have engaged in such a scheme 
should bear the burden in each subsequent review to show that 
reimbursement will not occur. At a minimum, a presumption must continue 
until a respondent has shown, through complete, fully verified 
information, that reimbursement has ceased.
    Petitioners suggest, however, that it is incorrect not to apply the 
reimbursement regulation when a corporate event, such as a capital 
infusion, ``enabled the importer to generate sufficient income to pay'' 
antidumping duties. According to petitioners, such an event may in fact 
be the very means of reimbursing the importer. Petitioners argue that 
the Department's proposed policy statement is inconsistent with its 
stated policy of applying the reimbursement regulation where there is 
financial intermingling linked to reimbursement, or, in the words of 
the CIT, ``a link between intracorporate transfers and the 
reimbursement of antidumping duties.'' Torrington Company v. United 
States, Consol. Court No. 95-03-00350 (CIT, October 3, 1996) at 7. 
Petitioners assert that even in cases where there is no specific 
agreement to reimburse antidumping duties, the law requires that the 
reimbursement regulation be applied if there is ``financial 
intermingling'' between an importer and the producer/exporter that can 
be linked to reimbursement. In the second administrative review, the 
Department committed itself to ``examine [in future reviews] whether 
there is any inappropriate financial intermingling, to ensure that 
reimbursement does not recur.'' Cold-Rolled Carbon Steel Flat Products 
from the Netherlands; Final Results of Administrative Review, 62 FR at 
18478 (April 15, 1997). Petitioners observe that intracorporate 
transfers between affiliated parties could serve to reimburse duties, 
regardless of whether the transfers were specifically labeled 
``reimbursement,'' and regardless of whether the transfers were made 
pursuant to an explicit agreement to reimburse. Further, the 
Department's statement of proposed policy could be read to suggest that 
the regulation will not be applied where the importer is able to fund 
its obligations by means of a capital infusion or other intracorporate 
transfer, regardless of whether such an infusion or transfer is 
specifically linked to reimbursement. Petitioners argue that this 
position is inconsistent with the law and incompatible with the basic 
purpose of the reimbursement regulation. According to petitioners,

[[Page 13214]]

under the Department's proposed policy statement, a respondent caught 
reimbursing duties could continue to pay such duties without 
application of the regulation, simply by calling the transferred funds 
a ``capital infusion.'' Petitioners conclude that this would defeat the 
entire purpose of the reimbursement regulation and would invite 
reimbursement schemes.
    Petitioners propose the following changes to the Department's 
proposed policy statement: First, delete clause (2)(b) in the final 
sentence, and second, add a provision at the end of the statement to 
indicate that the reimbursement regulation will apply where the 
Department finds the requisite link between intracorporate transfers 
and the reimbursement of antidumping duties. Petitioners suggest the 
following language:

    The Department will apply the reimbursement regulation where it 
finds ``financial intermingling''--i.e., intracorporate transfers--
linked to reimbursement. In this regard, the Department will presume 
that reimbursement is occurring where an importer that is 
financially unable to pay antidumping duties receives an 
intracorporate transfer that enables it to pay such duties. 
Moreover, even where an importer is financially able to pay duties, 
the respondent will bear the burden to show that intracorporate 
transfers are not linked to reimbursement where there is a previous 
finding of reimbursement.

Petitioners' comments at 11 (January 30, 1998).
    Department's Position: The Department has considered the comments 
submitted in this case and is continuing to follow the guidelines 
contained in the December 18, 1997, supplemental questionnaire. Based 
on the comments we received, we appreciate the need for further 
guidance. Accordingly, we may develop further guidelines in order to 
define more precisely such terms as corporate restructuring and the 
circumstances of reimbursement, as the need arises. In the present 
case, the facts and circumstances surrounding the corporate 
restructuring are clear and consistent with the purposes of the 
regulation. See case specific comments on reimbursement below.
    Further, we disagree with Hoogovens that these guidelines violate 
the express terms of the regulation. Contrary to Hoogovens' claim, 
nothing in the regulation limits the application of a presumption 
exclusively to certifications under section 353.26(c) of our 
regulations. Further, while each review is a separate proceeding 
covering merchandise entering the United States during a specific time 
period, the establishment of a rebuttable presumption allows the 
Department to administer the law fairly and effectively. Based upon the 
final results of a previous review where the Department found 
reimbursement of antidumping duties, we conclude that respondent's 
behavior in the review or reviews following that determination requires 
careful scrutiny. The Department has been granted broad discretionary 
power to enforce the antidumping law. In the Department's view, that 
discretionary power is at its zenith when the fundamental purpose of 
the law is at stake. Reimbursement of antidumping duties relieves the 
importer of its obligation to pay antidumping duties and thereby 
undermines the remedial effect of the antidumping law and frustrates 
the purpose and administration of that law. Accordingly, the Department 
has full authority to address instances of reimbursement. See SAA at 
216. The Department therefore concludes that it has proper authority to 
establish a rebuttable presumption where a respondent was previously 
found to have engaged in reimbursement activities.
    Whether circumstances warrant reversing the presumption of 
reimbursement must be decided on a case-by-case basis. In the present 
case, we have determined that the continuing payment of antidumping 
duty cash deposits during the POR by Hoogovens warrants maintaining the 
rebuttable presumption of reimbursement. The prior finding of 
reimbursement together with the continuing payment of cash deposits is 
a sufficient basis for shifting the burden of proof to respondent, 
particularly in light of the fact that the relevant evidence is solely 
within the hands of the respondent.
    We agree with petitioners that, under certain circumstances, the 
corporate event, such as a capital infusion, may be the very means of 
reimbursing the importer. The Department's policy is crafted to address 
the instances in which there has been a finding of reimbursement and 
the importer is financially unable to pay the duty on its own. In that 
circumstance, the Department will determine that the importer must 
continue to rely on reimbursements, such as intracorporate transfers, 
from the producer or exporter in order to meet its obligation to pay 
the duties. However, where a corporate event, such as a restructuring, 
has occurred, the importer must demonstrate that this event provides a 
continuing source of income to the importer such that the importer is 
able to pay the antidumping duty on its own (i.e., based upon the 
importer's total income). In contrast, a capital infusion that is used 
to pay antidumping duties directly would constitute further 
reimbursement of antidumping duties. In such a case, the Department 
will deduct the amount of the reimbursement from U.S. price in 
calculating the dumping margin.

Case-Specific Comments on Reimbursement

    Petitioners argue that the evidence on the record demonstrates that 
HSUSA is being reimbursed for antidumping duties, and that the 
Department must apply its reimbursement regulation (19 C.F.R. 
Sec. 353.26) for the final results. According to petitioners, both the 
courts and the Department have recognized that in cases where the 
importer is affiliated with the producer/exporter, the reimbursement 
regulation may be applied based on an agreement to reimburse or on 
``financial intermingling'' that can be linked to reimbursement. See 
Color Television Receivers from the Republic of Korea; Final Results of 
Antidumping Duty Administrative Reviews, 61 FR at 4410-11 (February 6, 
1996); Torrington Company v. United States, Court No. 95-03-00350 at 7 
(October 10, 1996). This practice reflects the fact that intracorporate 
transfers between affiliated parties could serve effectively to 
reimburse duties, regardless of whether the transfers are specifically 
labeled as ``reimbursement.''
    Petitioners cite the Department's determination in the second 
administrative review to examine in subsequent reviews ``whether there 
is any inappropriate financial intermingling between the companies in 
order to ensure that reimbursement does not recur.'' Memorandum on 
Proprietary Comments on Reimbursement in Cold-Rolled Carbon Steel Flat 
Products from the Netherlands (April 2, 1997), at 4 in Hoogovens' June 
26, 1997 Submission at Exhibit D (APO Version). According to 
petitioners, Hoogovens' statement that ``HSUSA, as sales agent and 
importer of record for Hoogovens' sales, paid cash deposits on entries 
for sales during the period of review, using funds transferred 
periodically by HSBV to HSUSA for that purpose'' is evidence that 
Hoogovens reimbursed HSUSA on all sales during the POR. Hoogovens' June 
26, 1997 Submission at 1 (Public Version). Petitioners summarize the 
proprietary information on the record in this review in support of 
their contention that there was financial intermingling between 
Hoogovens' parent company and HSUSA, and that the corporate 
restructuring undertaken after the application of the

[[Page 13215]]

reimbursement regulation in the first administrative review was 
motivated by the intention to circumvent the regulation.
    Petitioners argue that the Department's decision not to apply the 
reimbursement regulation in Certain Porcelain-on-Steel Cookware from 
Mexico; Final Results of Antidumping Duty Administrative Review, 62 FR 
42496, 42505 (August 7, 1997) (POS Cookware) is not applicable to the 
facts of this case, and that to the extent that POS Cookware suggests 
that the regulation will only be applied where the source of funds for 
duty reimbursement is directly tied to the producer/exporter, it is 
clearly incorrect. Petitioners claim that under such reasoning, all 
importers, whether affiliated or unaffiliated, could receive direct 
reimbursement for duties without adverse consequences, provided the 
funds came from an affiliate of the producer/exporter, and not the 
producer/exporter itself. Given the fungibility of money and the 
numerous transactions between holding companies or parents of foreign 
producers and their affiliates, petitioners contend the Department 
could never hope to determine whether the source of funds was the 
producer/exporter or its affiliate.
    Petitioners insist that the source of funds is irrelevant to the 
purpose behind the reimbursement regulation, which they claim is 
intended to prevent the absorption of antidumping duties by exporters, 
and to ensure that injured U.S. industries can fairly compete. 
Regardless of whether duties are reimbursed by a producer/exporter or 
its affiliate, according to petitioners it is clear that the duties 
will still be absorbed and the U.S. industry will continue to be 
deprived of the opportunity to compete fairly. Thus, petitioners 
conclude, POS Cookware provides no reason to refrain from applying the 
reimbursement regulation to the facts of this case.
    Hoogovens argues that the Department lacks statutory authority to 
apply the reimbursement regulation on the basis of affiliated party 
transactions. Further, Hoogovens contends that there is no substantial 
evidence on the record of reimbursement within the meaning of the 
regulation. According to Hoogovens, verified evidence in this review, 
including the amended agency agreement between Hoogovens and HSUSA and 
the refund by HSUSA to Hoogovens of the amount of antidumping duties 
calculated by the Department in the first and second administrative 
reviews, clearly supports the Department's determination not to apply 
the reimbursement regulation in the Preliminary Results. See 62 FR at 
47421 and Memorandum from Helen M. Kramer to Richard O. Weible 
(Decision Memorandum in 1995/96 Review), dated August 29, 1997, at 2.
    Hoogovens contends that the standard announced by the Department in 
POS Cookware prevents application of the reimbursement regulation in 
this review on the grounds that Hoogovens' parent, KHNV, is neither a 
producer nor a reseller of scope merchandise. While HSUSA and Hoogovens 
share the same ultimate parent, Hoogovens argues that under the 
Department's interpretation of the language of the reimbursement 
regulation, a finding of reimbursement cannot be based on transactions 
between KHNV and HSUSA. Furthermore, Hoogovens argues, the Department 
stated in POS Cookware that payments from a non-producer/reseller 
affiliated party to a U.S. importer subsidiary that are specifically 
for the payment of antidumping duties do not trigger the reimbursement 
regulation, and this implies that payments that are not for such a 
purpose (as in this case) cannot trigger the reimbursement regulation. 
Hoogovens concludes that the Department cannot apply the regulation in 
either unaffiliated or affiliated party transactions unless the 
prerequisites of the regulatory language are met, namely that the 
Department expressly find reimbursement, or payment of antidumping 
duties by the producer or reseller on behalf of the importer. According 
to Hoogovens, there is no evidence of such reimbursement in this case.
    Finally, Hoogovens rejects petitioners' contention that the purpose 
of the reimbursement regulation is to remedy duty absorption and to 
allow the U.S. industry ``to fairly compete.'' Petitioners' brief at 
48-49. Hoogovens points out that the reimbursement regulation says 
nothing about the issue of duty absorption, which is addressed in a 
separate provision and which may not affect the calculation of 
antidumping margins. SAA at 215.
    Department's Position: After reviewing the proprietary information 
on the record in this review, the Department has determined that 
Hoogovens has met its burden of establishing that its affiliated 
importer, HSUSA, (1) is solely responsible for the payment of the 
antidumping duties in this review; and (2) has the financial ability to 
generate sufficient income to pay the antidumping duties to be 
assessed. See Memorandum from Helen M. Kramer to Richard O. Weible of 
March 9, 1998. The record shows that there is no longer an agreement to 
reimburse HSUSA for antidumping duties to be assessed and that HSUSA is 
now generating sufficient income to pay the duties. Furthermore, HSUSA 
has repaid Hoogovens the portion of the sums advanced for the payment 
of cash deposits equal to the antidumping duties to be assessed in the 
second review.
    Further, we disagree with petitioners' position that the regulation 
should be invoked where a corporate restructuring was motivated by 
respondent's intention to circumvent the regulation. While we will be 
extremely vigilant in ensuring that respondent does not circumvent the 
regulation, it would be inappropriate to adopt a policy that requires 
us to divine a respondent's intent or motivation. Rather, we will 
examine the facts of a particular corporate restructuring to determine 
whether the restructuring provides a continuing source of income to the 
importer sufficient to cover payment of antidumping duties.

Final Results of Review

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

------------------------------------------------------------------------
       Manufacturer/exporter         Period of review   Margin (percent)
------------------------------------------------------------------------
Hoogovens Staal B.V...............     8/1/95-7/31/96              6.08.
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. For assessment 
purposes, the duty assessment rate will be a specific amount per metric 
ton. The Department will issue appraisement instructions directly to 
the Customs Service.
    Furthermore, the following deposit requirements will be effective 
upon publication of this notice of final results of review for all 
shipments of cold-rolled carbon steel flat products from the 
Netherlands entered, or withdrawn from warehouse, for consumption on or

[[Page 13216]]

after the publication date, as provided for by section 751(a)(1) of the 
Act: (1) the cash deposit rate for the reviewed company will be the 
rate for that firm as stated above; (2) if the exporter is not a firm 
covered in this review, or the original less than fair value (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; 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. This is the ``all others'' rate from the amended final 
determination in the LTFV investigation. See Amended Final 
Determination Pursuant to CIT Decision: Certain Cold-Rolled Carbon 
Steel Flat Products from the Netherlands, 61 Fed. Reg. 47871. These 
deposit requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under section 353.26 of the Department's regulations 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 notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 353.34(d) of the Department's 
regulations. Timely notification of return/destruction of APO materials 
or conversion to judicial protective order is hereby requested. Failure 
to comply with the regulations and the terms of an APO is a 
sanctionable violation.
    This administrative review and this notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 
of the Department's regulations.

    Dated: March 9, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-6884 Filed 3-17-98; 8:45 am]
BILLING CODE 3510-DS-P