[Federal Register Volume 63, Number 145 (Wednesday, July 29, 1998)]
[Notices]
[Pages 40449-40461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20021]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-401-806]


Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Wire Rod From Sweden

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

EFFECTIVE DATE: July 29, 1998.

FOR FURTHER INFORMATION CONTACT: Everett Kelly or Brian Smith, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230; telephone: (202) 482-4194 or (202) 482-1766, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are to the regulations at 19 CFR part 351, 62 FR 27296 (May 
19, 1997).

Final Determination

    We determine that stainless steel wire rod (``SSWR'') from Sweden 
is being sold in the United States at less than fair value (``LTFV''), 
as provided in section 735 of the Act. The estimated margins are shown 
in the ``Suspension of Liquidation'' section of this notice.

Case History

    Since the preliminary determination (i.e., Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Stainless Steel Wire 
from Sweden, 63 FR 10841 (March 5, 1998)), the following events have 
occurred:
    In February 1998, we requested additional information from Fagersta 
Stainless AB (``Fagersta'') concerning grade specifications and 
corresponding matching control numbers. In March 1998, we received 
responses to these questionnaires, as well as supplemental responses to 
Sections D and E of the Department's antidumping questionnaire. Also, 
Fagersta submitted revised sales and cost databases.
    From March to May 1998, we conducted verification of Fagersta's 
responses to the antidumping questionnaire. In May 1998, we issued our 
verification reports for Fagersta, Fagersta's home market affiliates AB 
Sandvik Steel (``Sandvik'') and Avesta Welding, and Fagersta's U.S. 
affiliates Sandvik Steel Company (``SSUS''), Avesta Sheffield Inc. 
(``ASI''), Amstek Metal (``Amstek'') and the Kanthal Corporation.
    Also in May 1998, AL Tech Specialty Steel Corp., Carpenter 
Technology Corp., Republic Engineered Steels, Talley Metals Technology, 
Inc., and United Steelworkers of America (``the petitioners'') withdrew 
their request for a hearing. The petitioners and Fagersta submitted 
case briefs on June 2, 1998, and rebuttal briefs on June 9, 1998. On 
June 12 and 15, 1998, we held separate meetings with Fagersta and the 
petitioners, respectively, concerning the level of trade issue raised 
in their case briefs and rebuttal briefs.
    On June 23, 1998, Fagersta requested that certain alloy metal wire 
rod and wire for electric resistance heating material and heating 
elements be excluded from the scope of the investigation. On July 6, 
1998, the petitioners stated that they agreed that the scope of this 
investigation should exclude the products in question. On July 8, 10 
and 14, Fagersta provided detailed scope descriptions and 
clarifications for the products it requested be excluded from the scope 
of this investigation (see ``Scope of Investigation'' section of this 
notice for further details).

Scope of Investigation

    For purposes of this investigation, SSWR comprises products that 
are hot-rolled or hot-rolled annealed and/or pickled and/or descaled 
rounds, squares, octagons, hexagons or other shapes, in coils, that may 
also be coated with a lubricant containing copper, lime or oxalate. 
SSWR is made of alloy steels containing, by weight, 1.2 percent or less 
of carbon and 10.5 percent or more of chromium, with or without other 
elements. These products are manufactured only by hot-rolling or hot-
rolling annealing, and/or pickling and/or descaling, are normally sold 
in coiled form, and are of solid cross-section. The majority of SSWR 
sold in the United States is round in cross-sectional shape, annealed 
and pickled, and later cold-finished into stainless steel wire or 
small-diameter bar.
    The most common size for such products is 5.5 millimeters or 0.217 
inches in diameter, which represents the smallest size that normally is 
produced on a rolling mill and is the size that most wire-drawing 
machines are set up to draw. The range of SSWR sizes normally sold in 
the United States is between 0.20 inches and 1.312 inches in diameter. 
Certain stainless steel grades are excluded from the scope of the 
investigation. SF20T and K-M35FL are excluded. The following 
proprietary grades of Kanthal AB are also excluded: Kanthal A-1, 
Kanthal AF, Kanthal A, Kanthal D, Kanthal DT, Alkrothal 14, Alkrothal 
720, and Nikrothal 40. The chemical makeup for the excluded grades is 
as follows:

                                  SF20T                                 
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.05 max.                   
Manganese.................................  2.00 max.                   
Phosphorous...............................  0.05 max.                   
Sulfur....................................  0.15 max.                   
Silicon...................................  1.00 max.                   
Chromium..................................  19.00/21.00.                
Molybdenum................................  1.50/2.50.                  
Lead......................................  Added (0.10/0.30).          
Tellurium.................................  Added (0.03 min).           
------------------------------------------------------------------------


                                 K-M35FL                                
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.015 max.                  
Silicon...................................  0.70/1.00.                  
Manganese.................................  0.40 max.                   
Phosphorous...............................  0.04 max.                   
Sulfur....................................  0.03 max.                   
Nickel....................................  0.30 max.                   
Chromium..................................  12.50/14.00.                
Lead......................................  0.10/0.30.                  
Aluminum..................................  0.20/0.35.                  
------------------------------------------------------------------------


                               Kanthal A-1                              
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.08 max.                   
Silicon...................................  0.70 max.                   
Manganese.................................  0.40 max.                   
Chromium..................................  20.50 min, 23.50 max.       
Aluminum..................................  5.30 min, 6.30 max.         
Iron......................................  Balance.                    
------------------------------------------------------------------------


                               Kanthal AF                               
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.08 max.                   
Silicon...................................  0.70 max.                   

[[Page 40450]]

                                                                        
Manganese.................................  0.40 max.                   
Chromium..................................  20.50 min, 23.50 max.       
Aluminum..................................  4.80 min, 5.80 max.         
Iron......................................  Balance.                    
------------------------------------------------------------------------


                                Kanthal A                               
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.08 max.                   
Silicon...................................  0.70 max.                   
Manganese.................................  0.50 max.                   
Chromium..................................  20.50 min, 23.50 max.       
Aluminum..................................  4.80 min, 5.80 max.         
Iron......................................  Balance.                    
------------------------------------------------------------------------


                                Kanthal D                               
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.08 max.                   
Silicon...................................  0.70 max.                   
Manganese.................................  0.50 max.                   
Chromium..................................  20.50 min, 23.50 max.       
Aluminum..................................  4.30 min, 5.30 max.         
Iron......................................  Balance.                    
------------------------------------------------------------------------


                               Kanthal DT                               
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.08 max.                   
Silicon...................................  0.70 max.                   
Manganese.................................  0.50 max.                   
Chromium..................................  20.50 min, 23.50 max.       
Aluminum..................................  4.60 min, 5.60 max.         
Iron......................................  Balance.                    
------------------------------------------------------------------------


                              Alkrothal 14                              
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.08 max.                   
Silicon...................................  0.70 max.                   
Manganese.................................  0.50 max.                   
Chromium..................................  14.00 min, 16.00 max.       
Aluminum..................................  3.80 min, 4.80 max.         
Iron......................................  Balance.                    
------------------------------------------------------------------------


                              Alkrothal 720                             
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.08 max.                   
Silicon...................................  0.70 max.                   
Manganese.................................  0.70 max.                   
Chromium..................................  12.00 min, 14.00 max.       
Aluminum..................................  3.50 min, 4.50 max.         
Iron......................................  Balance.                    
------------------------------------------------------------------------


                              Nikrothal 40                              
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Carbon....................................  0.10 max.                   
Silicon...................................  1.60 min, 2.50 max.         
Manganese.................................  1.00 max.                   
Chromium..................................  18.00 min, 21.00 max.       
Nickel....................................  34.00 min, 37.00 max.       
Iron......................................  Balance.                    
------------------------------------------------------------------------

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

Period of Investigation (``POI'')

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

Fair Value Comparisons

    To determine whether sales of SSWR from Sweden to the United States 
were made at less than fair value, we compared the export price 
(``EP'') or constructed export price (``CEP'') to the Normal Value 
(``NV''), as described in the ``Export Price and Constructed Export 
Price'' and ``Normal Value'' sections of this notice, below. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we calculated 
weighted-average EPs and CEPs for comparison to weighted-average NVs.
    On January 8, 1998, the Court of Appeals for the Federal Circuit 
issued a decision in CEMEX v. United States, 133 F.3d 897 (Fed. Cir. 
1998). In that case, based on the pre-URAA version of the Act, the 
Court discussed the appropriateness of using constructed value (``CV'') 
as the basis for foreign market value when the Department finds home 
market sales to be outside the ``ordinary course of trade.'' This issue 
was not raised by any party in this proceeding. However, the URAA 
amended the definition of sales outside the ``ordinary course of 
trade'' to include sales below cost. See section 771(15) of the Act. 
Consequently, the Department has reconsidered its practice in 
accordance with this court decision and has determined that it would be 
inappropriate to resort directly to CV, in lieu of foreign market 
sales, as the basis for NV if the Department finds foreign market sales 
of merchandise identical or most similar to that sold in the United 
States to be outside the ``ordinary course of trade.'' Instead, the 
Department will use sales of similar merchandise, if such sales exist. 
The Department will use CV as the basis for NV only when there are no 
above-cost sales that are otherwise suitable for comparison. Therefore, 
in this proceeding, when making comparisons in accordance with section 
771(16) of the Act, we considered all products sold in the home market 
as described in the ``Scope of Investigation'' section of this notice, 
above, that were in the ordinary course of trade for purposes of 
determining appropriate product comparisons to U.S. sales. Where there 
were no sales of identical merchandise in the home market made in the 
ordinary course of trade to compare to U.S. sales, we compared U.S. 
sales to sales of the most similar foreign like product made in the 
ordinary course of trade, based on the characteristics listed in 
Sections B and C of our antidumping questionnaire, and information 
submitted in Fagersta's response to the Department's February 26, 1998, 
supplemental questionnaire. We have implemented the Court's decision in 
this case, to the extent that the data on the record permitted.
    In instances where Fagersta has reported a non-AISI grade (or an 
internal grade code) for a product that falls within a single AISI 
category, we have used the actual AISI grade rather than the non-AISI 
grade reported by Fagersta for purposes of our analysis. However, in 
instances where the chemical content ranges of reported non-AISI (or an 
internal grade code) grades are outside the parameters of an AISI 
grade, we used the grade code reported by the respondents for analysis 
purposes (see Comment 6). We made changes to our concordance program 
from the preliminary determination which incorporated corrections 
submitted to the Department in Fagersta's March 16, 1998, submission 
with respect to Fagersta's three most similar grade comparisons (see 
Calculation Memorandum for the Final Determination for Fagersta 
Stainless AB dated July 20, 1998 (``Final Calculation Memorandum'')).
    With respect to home market sales of non-prime merchandise made by 
Fagersta during the POI, we have continued to exclude these sales from 
our final analysis based on the limited quantity of such sales in the 
home market and the fact that no such sales were made to the United 
States during the POI, in accordance with our past practice (see Final 
Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat

[[Page 40451]]

Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and 
Certain Cut-to-Length Carbon Steel Plate from Korea, 58 FR 37176, 37180 
(July 9, 1993)).

Level of Trade

    As discussed in the preliminary determination, Fagersta claimed a 
level of trade (``LOT'') adjustment on the basis that it offers 
significantly different services to its affiliated customers in the 
home market, in comparison to its services to unaffiliated customers in 
the United States, and charges its affiliated customers higher prices 
as a result. In our preliminary determination, we determined Fagersta's 
U.S. sales and home market sales to be at the same LOT and no LOT 
adjustment under section 773(a)(7)(A) of the Act was consequently 
warranted.
    For the final determination, we have collapsed Fagersta and 
Sandvik. Therefore, we have not used Fagersta's home market sales to 
Sandvik in our analysis (see Comment 1 for further discussion). With 
regard to Fagersta's home market sales to Sandvik's wholly-owned 
affiliate Gusab Stainless AB (``Gusab'') and Fagersta's home market 
sales to its affiliate Avesta Welding, we have continued to treat these 
Fagersta home market sales as being at the same LOT as its U.S. sales 
(see Comment 3).

Export Price and Constructed Export Price

    As discussed in the preliminary determination of this proceeding, 
Fagersta reported as EP transactions its sales of subject merchandise 
sold to unaffiliated U.S. customers prior to importation through two 
affiliated companies in the United States--ASI and SSUS. Fagersta 
reported as CEP transactions its sales of subject merchandise sold to 
SSUS for its own account and sales made by Amstek, the product of which 
was sourced from SSUS. SSUS and Amstek either resold the subject 
merchandise to unaffiliated customers or SSUS further manufactured the 
wire rod into wire products which are outside the scope of this 
investigation.
    During verification, we reviewed the selling activities of 
Fagersta's U.S. affiliates. In particular, we paid close attention to 
ASI's and SSUS' inventory records and freight and U.S. customs 
documentation, as well as correspondence documentation between Fagersta 
and its U.S. affiliates. Based on our verification findings, we find 
that EP is appropriate for all of Fagersta's sales to the United States 
through ASI and for specific Fagersta sales through SSUS reported as EP 
sales transactions (see pages 15 and 17 of the May 11, 1998, Sales 
Verification Report of Fagersta Stainless AB, page 12 of the May 20, 
1998, SSUS Verification Report, and pages 8 and 9 of the May 22, 1998, 
ASI Verification Report). With respect to the EP sales mentioned above, 
we find that the customary commercial channel between Fagersta and its 
unaffiliated customers is for Fagersta to ship the merchandise directly 
to the unaffiliated U.S. customers without having the merchandise enter 
into the physical inventory of the U.S. affiliates. We also find that 
the U.S. affiliates' activities are limited to that of a ``processor of 
sales-related documentation'' and a ``communication link'' with the 
unaffiliated U.S. buyers. Accordingly, for purposes of the final 
determination, we treated certain SSUS sales and all of ASI's U.S. 
sales as EP transactions (see Comment 4 for a further discussion of 
SSUS' EP sales).
    We calculated EP and CEP, as appropriate, in accordance with 
sections 772 (a), (b), (c), and (d) of the Act. For those CEP sales 
that were further manufactured from subject merchandise, we deducted 
the costs of further manufacturing to determine CEP for such 
merchandise, in accordance with section 772(d)(2) of the Act. We 
calculated EP and CEP based on the same methodology used in the 
preliminary determination, with the following exceptions: (1) we used 
the March 16, 1998, U.S. and home market sales listings; (2) we 
adjusted the U.S. inventory carrying costs and indirect selling 
expenses based on our verification findings in Sweden; and (3) we 
corrected a ministerial error in our margin program where we had 
overwritten the sales quantity for the first record of each sale type 
and control number combination (see Comment 10).
    In addition, we made the following company-specific adjustments to 
Fagersta's U.S. affiliates' reported data:

A. Amstek

    Based on verification findings, we adjusted the direct selling 
expenses and warranty expenses pertaining to Amstek's sales data, and 
we deleted an invoice from Amstek's sales listing (see Comments 5 and 8 
for further discussion).

B. SSUS

    We corrected the reported amounts for discounts, freight, U.S. 
duty, U.S. brokerage and handling, credit expenses, inventory carrying 
costs and warranty expenses based on our verification findings (see 
Comment 8 for further discussion). We calculated international freight 
for SSUS' EP sales transactions based on transaction-specific expense 
data examined at verification (see Comment 9 for further discussion). 
We corrected for invoice-specific errors with respect to alloy 
surcharges, sale dates, invoice dates, discounts, duty and brokerage 
fees, and inland freight warehouse transfer expenses (see Final 
Calculation Memorandum for further discussion).

C. ASI

    We corrected ASI's reported direct selling expenses based on our 
verification findings. We also corrected invoice-specific information 
in ASI's sales listing with respect to quantities, U.S. brokerage fees, 
international freight expenses, and inland freight expenses (see Final 
Calculation Memorandum).

Normal Value

    After testing (1) home market viability; (2) whether sales to 
affiliates were at arm's-length prices; and (3) whether home market 
sales were at below-cost prices, we calculated NV as noted in the 
``Price to Price Comparisons'' and ``Price to CV Comparisons'' sections 
of this notice (see ``Affiliated-Party Transactions and Arm's Length 
Test'' section below and Comment 2 for further discussion).

1. Home Market Viability

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

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

    We have not used Fagersta's home market sales to Sandvik in our 
analysis, because we find that Fagersta and Sandvik meet the criteria 
for collapsing affiliated companies (see Comment 1 for further 
discussion). With respect to Fagersta's home market sales to Avesta 
Sheffield's (``Avesta'') affiliate and Gusab (a wholly-owned affiliate 
of Sandvik), we do not find that Fagersta and Avesta or Gusab meet the 
criteria

[[Page 40452]]

for collapsing affiliated companies. Therefore, we have applied the 
arm's-length test to these sales by comparing them to sales of 
identical merchandise from Fagersta to its unaffiliated home market 
customers. If these affiliated party sales satisfied the arm's-length 
test, we used them in our analysis (see Comments 1 and 2 for further 
discussion).

3. Cost of Production Analysis

    As discussed in the preliminary determination, we conducted an 
investigation to determine whether Fagersta made sales of the foreign 
like product in the home market during the POI at prices below their 
cost of production (``COP'') within the meaning of section 773(b)(1) of 
the Act. We calculated COP based on the same methodology used in the 
preliminary determination on a model-specific basis, except where we 
modified the margin calculation program to correct for certain 
adjustments and updated cost data based on verification findings (see 
Final Calculation Memorandum).
    For COP, we used Fagersta's revised SSWR COP data (utilizing the 
cost file based on billet COP incurred by its affiliated suppliers, 
Sandvik Steel and Avesta Sheffield, rather than the cost file based on 
billet transfer price) and SSUS's revised further manufacturing COP 
data, as submitted to the Department on March 16, and April 29, 1998, 
respectively. Based on our verification findings, we made the following 
adjustments to Fagersta's COP (see Final Calculation Memorandum):
    1. We recalculated Sandvik Steel's selling, general, and 
administrative (``SG&A'') expense rate using company-wide expenses and 
cost of sales (``COS'') figures reported in Sandvik Steel's 1996 
financial statements (see Comment 13 for a detailed discussion of 
adjustments).
    2. We adjusted the G&A expense rate for Avesta Sheffield based on 
the company-wide expenses and COS figures reported in Avesta 
Sheffield's audited 1996 financial statements.
    3. We adjusted Fagersta's G&A expense rate to correct an error in 
the company's computation.
    4. We adjusted Fagersta's submitted actual variable overhead and 
fixed overhead to reflect the difference between the packing materials 
costs deducted in Fagersta's computation of its fabrication cost 
variance rate, and the packing materials costs submitted by the company 
during the Department's sales verification.
    5. We adjusted SSUS's further manufacturing materials cost to 
reflect the unreconciled difference between the submitted materials 
cost and the materials cost reported in SSUS's normal accounting 
records.
    6. We adjusted Fagersta's reported materials costs for SSWR such 
that the value of billets purchased from one of the company's 
affiliated suppliers, Avesta Sheffield, reflected the transfer price of 
the major input.
    Pursuant to section 773(b)(2)(C), where less than 20 percent of the 
respondent's sales of a given product were made at prices below the 
COP, we did not disregard any below-cost sales of that product because 
we determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of the respondent's sales of a 
given product were made at prices below the COP, we disregarded the 
below-cost sales because such sales were found to be made within an 
extended period of time in ``substantial quantities'' in accordance 
with sections 773(b)(2)(B) and (C) of the Act, and because the below 
cost sales of the product were at prices which would not permit 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(2)(D) of the Act. Where all contemporaneous sales 
of a specific product were made at prices below the COP, we calculated 
NV based on CV, in accordance with section 773(a)(4) and (e) of the 
Act.
    We found that, for certain grades of SSWR, more than 20 percent of 
Fagersta's home market sales within an extended period of time were at 
prices less than COP. Further, the prices did not provide for the 
recovery of costs within a reasonable period of time. We therefore 
excluded these sales and used the remaining above-cost sales as the 
basis for determining NV if such sales existed, in accordance with 
section 773(b)(1). For those U.S. sales of SSWR for which there were no 
comparable (above-cost) home market sales in the ordinary course of 
trade, we compared export prices or constructed export prices to CV in 
accordance with section 773(a)(4) of the Act.

D. Calculation of CV

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of Fagersta's cost of materials, fabrication, SG&A, 
interest, and U.S. packing costs. Where appropriate, we calculated CV 
based on the methodology described above in the calculation of COP and 
added an amount for profit. In accordance with sections 773(e)(2)(A) of 
the Act, we based SG&A and profit on the amounts incurred and realized 
by the respondent in connection with the production and sale of the 
foreign like product in the ordinary course of trade for consumption in 
the foreign country. For selling expenses, we used the weighted-average 
home market selling expenses.

Price-to-Price Comparisons

    For price-to-price comparisons, we calculated NV based on the same 
methodology used in the preliminary determination, with the following 
exceptions: based on verification, we corrected Fagersta's home market 
warranty expenses, inventory carrying costs, credit expenses and 
indirect selling expenses (see Final Calculation Memorandum for further 
discussion).

Price-to-CV Comparisons

    For price-to-CV comparisons, we made adjustments to CV in 
accordance with section 773(a)(8) of the Act. Where we compared CV to 
EP, we made a circumstance-of-sale adjustment by deducting from CV the 
weighted-average home market direct selling expenses and adding the 
weighted-average U.S. product-specific direct selling expenses in 
accordance with section 773(a)(6)(C)(iii) of the Act and 19 C.F.R. 
351.410. Where we compared CV to CEP, we deducted from CV the weighted-
average home market direct selling expenses.

Currency Conversion

    As in the preliminary determination, we made currency conversions 
into U.S. dollars based on the exchange rates in effect on the dates of 
the U.S. sales, as certified by the Federal Reserve Bank in accordance 
with section 773A of the Act.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the respondent for use in our final 
determination. We used standard verification procedures, including 
examination of relevant accounting and production records and original 
source documents provided by the respondent.

Interested Party Comments

Sales Issues
    Comment 1: Collapsing Fagersta, Sandvik and Kanthal AB.
    Fagersta contends that the Sandvik Group (which includes Kanthal AB 
(``Kanthal''), Gusab, and AB Sandvik Steel (``Sandvik'')) fulfills the 
Department's collapsing test based on 19 C.F.R. 351.401(f). Fagersta 
states that it is affiliated with its billet producer and supplier, 
Sandvik, because Sandvik owns 50 percent of Fagersta. Fagersta also 
claims that Sandvik is a producer of similar or identical products and, 
as

[[Page 40453]]

such, would not require substantial retooling in order to restructure 
manufacturing priorities. Respondent makes this claim based on the fact 
that Sandvik is a 100 percent owner of Kanthal, a subsidiary which has 
a tolling arrangement with Sandvik to process billets produced and 
supplied by Sandvik into the subject merchandise. Fagersta also states 
that, while Sandvik used the majority of the subject merchandise it 
purchased from Fagersta during the POI for internal consumption, 
Sandvik did export a small quantity of the subject merchandise during 
the POI (as reported to the Department), and has the capacity to 
continue exporting subject merchandise to the U.S. market in the future 
without substantial retooling. Fagersta states that Kanthal also sold 
the subject merchandise in the U.S. market during the POI. Finally, 
Fagersta states that there are interlocking directors between it and 
Sandvik which further contribute to the significant potential for the 
manipulation of price or production.
    Fagersta contends that, because it and Sandvik should be collapsed, 
the major input rule would not apply in this case. Consequently, the 
Department should disregard the billet transfer prices between Sandvik 
and Fagersta and compute COP and CV based on Sandvik's billet 
production costs. In support of its position, Fagersta cites to Final 
Results of Antidumping Duty Administrative Review: Certain Cold-Rolled 
and Corrosion-Resistant Carbon Steel Flat Products from Korea, 62 FR 
18404 (April 15, 1997); Final Determination of Sales at Less Than Fair 
Value: Collated Roofing Nails from Taiwan, 62 FR 51427, 51436 (October 
1, 1997) (Nails from Taiwan); Preliminary Results of Antidumping Duty 
Changed Circumstances Review: Certain Fresh Cut Flowers from Colombia, 
63 FR 25447, 25448 (May 8, 1998) (Flowers from Colombia); and Final 
Results of Antidumping Duty Administrative Review: Polyvinyl Alcohol 
from Taiwan, 63 FR 32810 (June 16, 1998) (PVA from Taiwan).
    The petitioners point to the same determinations in support of 
their contention that the Department should not collapse Fagersta and 
Sandvik because Fagersta has not demonstrated that Sandvik (the billet 
producer) has equipment within its facilities that could transform the 
billets into the subject merchandise, precisely as Fagersta does in its 
facilities without substantial retooling to restructure manufacturing 
priorities. Specifically, the petitioners maintain that Sandvik must 
enter into a tolling arrangement with an off-site company because it 
does not have the on-site capability to produce the subject 
merchandise. Consequently, the petitioners argue that the Department 
must find that Sandvik's facilities would have to be substantially 
retooled to restructure manufacturing priorities for subject 
merchandise. The petitioners further maintain that previous Department 
collapsing determinations indicate that the Department examines the 
facilities of the company it is considering collapsing, not the 
facilities of a separate company involved in a contractual tolling 
arrangement. In addition, the petitioners contend that there is no 
evidence on the record of this case which demonstrates that Sandvik and 
Fagersta are divisions of the same company. Moreover, the petitioners 
contend that Fagersta has failed to establish that its transactions 
with Sandvik are part of an integrated system directed solely at 
Sandvik's discretion. Finally, the petitioners contend that Fagersta 
has failed to provide evidence which demonstrates the extent to which 
managerial employees or board members of Sandvik sit on the board of 
directors of Fagersta or whether their business operations are 
intertwined, such as through shared sales information, involvement in 
production and pricing decisions, the sharing of facilities or 
employees, or significant transactions between the two entities. The 
petitioners also cite to Final Results of Antidumping Duty 
Administrative Review: Certain Forged Steel Crankshafts from the United 
Kingdom, 61 FR 54613, 54614 (October 21, 1996) (Crankshafts from the 
U.K.) in support of their argument.
DOC Position
    We agree with Fagersta that Fagersta, Sandvik and Kanthal should be 
collapsed.
    However, for the reasons explained below, we disagree that Fagersta 
and Avesta should be collapsed or that Fagersta and Gusab should be 
collapsed. For the preliminary determination, the Department did not 
collapse Fagersta, Sandvik, Kanthal, Avesta and Gusab. However, since 
the preliminary determination, we have reexamined the collapsing issue, 
taking into account the arguments advanced by the parties, as well as 
our own analysis and verification findings, with respect to the 
information on the record that is relevant to this issue. As a result 
of our reexamination, we now agree with Fagersta that Fagersta and its 
affiliates Sandvik and Kanthal should be collapsed. However, as we also 
explain, we disagree that Fagersta and its other affiliates, Avesta and 
Gusab, should be collapsed, as they do not meet the criteria for 
collapsing.
    Pursuant to 19 C.F.R. 351.401(f), the Department will collapse 
producers and treat them as a single entity where (1) those producers 
are affiliated, (2) the producers have production facilities for 
producing similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities, and (3) there is a significant potential for 
manipulation of price or production. In determining whether a 
significant potential for manipulation exists, the Department will 
consider (1) the level of common ownership, (2) the extent to which 
managerial employees or board members of one firm sit on the board of 
directors of an affiliated firm, and (3) whether the operations of the 
affiliated firms are intertwined. (See Gray Portland Cement and Clinker 
From Mexico: Final Results of Antidumping Duty Administrative Review, 
63 FR 12764, 12774 (March 16, 1998) and Nails From Taiwan, 62 FR at 
51436.) Based on a totality of the circumstances, the Department will 
collapse affiliated producers and treat them as a single entity where 
the criteria of 19 C.F.R. 351.401(f) are met.
    We find that Fagersta, Sandvik and Kanthal satisfy the first 
criterion in that they are affiliated with each other. Under section 
771(33)(E) of the Act, persons are deemed to be affiliated where any 
person directly or indirectly owns, controls, or holds with power to 
vote, five percent or more of the outstanding voting stock or shares of 
any organization and such organization. In this instance, Sandvik and 
Avesta are 50 percent owners of the joint venture respondent, Fagersta, 
which makes them both affiliates of Fagersta. In addition, Kanthal is a 
wholly-owned affiliate of Sandvik. See also 19 C.F.R. 351.102. Fagersta 
and Kanthal are also affiliated based on section 771(33)(F) of the Act, 
which provides that persons directly or indirectly under common control 
of any person are affiliates. In this case, Sandvik owns 50 percent of 
Fagersta and 100 percent of Kanthal so that these two entities would be 
under the common control of Sandvik.
    Second, pursuant to 19 C.F.R. 351.401(h), we find that Sandvik is 
also a producer of the subject merchandise through its tolling 
arrangement with its wholly-owned subsidiary, Kanthal. Sandvik produces 
billets which are processed into SSWR by Kanthal for Sandvik.
    Under this tolling arrangement, Sandvik retains title to the 
billets at all times and simply pays Kanthal a processing fee. Even 
though Kanthal

[[Page 40454]]

may not be located on the same premises as Sandvik, this fact, contrary 
to the petitioners' contentions, does not make Sandvik any less a 
producer of the subject merchandise than if the subject merchandise 
were produced on its premises (see PVA from Taiwan, 63 FR 32810, 32813 
(June 16, 1998); Notice of Final Determination of Sales at Less Than 
Fair Value: Static Random Access Memory Semiconductors From Taiwan, 63 
FR 8909, 8916 (February 23, 1998)). Thus, Sandvik is in fact a producer 
of merchandise that is identical or similar to that produced by 
Fagersta, and no retooling is required. In addition, we find that 
Kanthal is a producer of the subject merchandise in its own right and 
has the equipment in its facilities to produce subject merchandise that 
is identical or similar to that produced by Fagersta. Accordingly, we 
find the second collapsing criterion to have been met in that Sandvik, 
Kanthal and Fagersta are affiliated parties, each of which is a 
producer of identical or similar subject merchandise.
    Finally, we also find that the operations of Sandvik, Fagersta and 
Kanthal are so intertwined that there exists a significant potential 
for manipulation of price or production if these affiliated producers 
were not collapsed. See 19 C.F.R. 351.401(f)(2). In particular, the 
level of common ownership is substantial as Sandvik owns 50 percent of 
Fagersta and 100 percent of Kanthal. Additionally, 50 percent of the 
management positions on Fagersta's board of directors are occupied by 
Sandvik officials (see Exhibit 4 of the Fagersta Sales Verification 
Report of Fagersta Stainless AB and Exhibit A-2 of May 19, 1998, Cost 
Verification Report of AB Sandvik Steel), and Fagersta is required to 
purchase only from Sandvik the billets that it processes into SSWR for 
sale to Sandvik. Further, Sandvik, Kanthal, and Fagersta also share 
information concerning sales, production, and pricing (see page 13 of 
volume 1A of Fagersta's February 2, 1998, supplemental questionnaire 
response).
    On the other hand, while we find that Fagersta is affiliated with 
Avesta and Gusab for the same reasons that it is affiliated with 
Sandvik, we find that neither Avesta nor Gusab is a producer of the 
subject merchandise. In particular, no evidence has been placed on the 
record indicating that either Avesta or Gusab produces the subject 
merchandise at its own facility or could produce the merchandise 
without substantially retooling their facilities, or that either may be 
considered a producer by way of a tolling arrangement like Sandvik. 
Therefore, despite their affiliation with Fagersta, we have not 
collapsed either Avesta or Gusab with Fagersta under 19 C.F.R. 
351.401(f).
    In this instance, based on a totality of the circumstances, 
Fagersta, Sandvik and Sandvik's wholly-owned subsidiary Kanthal meet 
the criteria for purposes of being collapsed and treated as a single 
entity. In this respect, it is not necessary, as the petitioners appear 
to suggest in referring to Crankshafts from the United Kingdom, that 
Fagersta and Sandvik be divisions of the same company for collapsing 
purposes. Because we have collapsed Fagersta, Sandvik and Kanthal, we 
find that the major input rule does not apply in this instance and have 
used Sandvik's billet costs as the basis for COP. In the case of 
Avesta, since we have not collapsed Fagersta and Avesta, we find that 
the major input rule under section 773(f)(2) and (3) of the Act does 
apply and have therefore used the higher of the transfer price or 
billet cost (no information on the market value of billets was 
available) as the basis for calculating COP and CV for the subject 
merchandise.
    Comment 2: Home Market Affiliated Sales Transactions.
    Fagersta contends that, in this case, the Department's arms-length 
test fails to capture the basic distinction between its market-price 
SSWR sales to unaffiliated parties and affiliated parties because for 
its affiliated sales, Fagersta negotiates the processing fee with its 
affiliated parties (i.e., Sandvik Group) for converting Sandvik billet 
into SSWR for delivery to Sandvik's wire mills. Therefore, Fagersta 
maintains that this special arrangement within the Sandvik Group in the 
home market, including Fagersta's role as strictly a processor of 
billet into SSWR, should compel the Department to treat Fagersta's home 
market affiliated sales as outside the ordinary course of trade. 
Fagersta cites to the Final Results of Antidumping Duty Administrative 
Review: Gray Portland Cement and Clinker from Mexico, 63 FR 12764, 
12770 (March 16, 1998) and 19 C.F.R. 351.403(c) in support of its 
argument. Alternatively, Fagersta argues that the Department should 
adjust the prices of its home market affiliated party sales to reduce 
the distortion created by Sandvik's presence at both the billet and 
wire stage by making a level of trade adjustment or exclude these sales 
from its analysis because the major input rule does not apply in this 
case.
    The petitioners contend that if Fagersta's home market affiliated 
sales pass the Department's arm's-length test, the Department must use 
these sales in the final determination because Fagersta has provided no 
basis for excluding such sales. The petitioners maintain that the 
Department should find Fagersta's arguments that it is a division of 
the same company as its suppliers, or that it meets the criteria for 
being collapsed with its suppliers, are completely unsupported by 
evidence in the record of this case and should be rejected by the 
Department.
DOC Position
    We agree in part with Fagersta. We have not used Fagersta's home 
market sales to Sandvik because we find that Fagersta and Sandvik meet 
the criteria for collapsing affiliated producers (see Comment 1 above). 
Therefore, we find that the arm's-length test does not apply with 
respect to Fagersta's home market sales of subject merchandise made to 
Sandvik. Regarding Fagersta's home market sales to Gusab and Avesta 
Welding, we find that neither Fagersta and Avesta Welding nor Fagersta 
and Gusab meet the criteria for collapsing affiliated companies (see 
Comment 1 above). Moreover, we do not find that these sales were made 
outside the ordinary course of trade. We find that Fagersta's sales to 
its affiliated end users, Avesta Welding and Gusab, were similar in 
nature to the home market sales made to its unaffiliated customers. 
However, in attempting to apply the arm's-length test to the sales to 
Avesta's affiliate, we find no sales of identical merchandise made to 
Fagersta's unaffiliated home market customers to match. Moreover, we do 
not find that Fagersta made any U.S. sales of merchandise that was 
identical to the merchandise sold to Avesta's home market affiliate. 
Therefore, we have not used these sales in our analysis (see Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Carbon Steel Flat Products from Argentina, 58 FR 37062 (July 9, 1993)). 
In applying the arm's-length test to Fagersta's sales to Gusab, we do 
find sales of identical merchandise to match to sales Fagersta made to 
unaffiliated customers. Therefore, we have used these sales in our 
analysis if they passed the arm's-length test.
    Comment 3: Level of Trade.
    Fagersta claims that it has provided evidence that its sales within 
the Sandvik Group occur at a different marketing stage, involving 
substantially different selling functions, than its sales to 
unaffiliated home market and U.S. customers. In addition, Fagersta 
claims that it has demonstrated that it provides premium services 
during the integrated sales and marketing process for affiliated 
customers which its

[[Page 40455]]

unaffiliated home market and U.S. customers either do not receive, or 
receive to a lesser extent. Therefore, Fagersta contends that because a 
substantial difference in selling activities and price comparability 
exists between the home market Sandvik Group transactions and 
unaffiliated home market or U.S. sales, the Department must recognize 
that there is a difference in marketing stages and grant it a LOT 
adjustment. Fagersta cites to Final Results of Antidumping Duty 
Administrative Review: Certain Stainless Wire Rods from France, 61 FR 
47874, 47880 (September 11, 1996) (Wire Rods from France) in support of 
its argument.
    The petitioners contend that the Department should not grant 
Fagersta a LOT adjustment or CEP offset because Fagersta has not 
demonstrated in this case that its home market sales are at a different 
LOT than its U.S. sales. Specifically, the petitioners state that 
Fagersta has failed to demonstrate that its sales to unaffiliated and 
affiliated customers in the home market were not made through the same 
channel of distribution and to the same category of customer. With 
regard to the premium services Fagersta claims it provides its 
affiliated customers, the petitioners maintain that the documentation 
on the record does not support a finding that substantive differences 
exist between services provided for sales to affiliated and 
unaffiliated customers. Moreover, the petitioners argue that Fagersta 
has not demonstrated that the difference in selling functions and 
activities between its affiliated home market customers and U.S. 
customers establishes a difference in marketing stages. Therefore, the 
petitioners maintain that Fagersta has not demonstrated that there is 
difference in selling functions as a result of different selling 
activities associated with home market and U.S. sales. Finally, the 
petitioners contend that Fagersta has failed to correlate any LOT 
difference with a pattern of consistent price differences between sales 
at different LOT in the home market.
DOC Position
    We agree with the petitioners. A LOT adjustment can increase or 
decrease normal value (see Statement of Administrative Action 
(``SAA''), H. Doc. No. 316, Vol. 1, 103d Cong., 2d Sess. 829 (1994)). 
The SAA directs the Department 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. See also Final Results of Antidumping 
Duty Administrative Review: Certain Cold-Rolled Carbon Steel Flat 
Products from the Netherlands, 63 FR 13204, 13206 (March 18, 1998). 
Thus, to properly establish the LOT of the relevant sales, the 
Department specifically requests LOT information in every antidumping 
proceeding, regardless of whether a respondent sells solely to one 
nominal customer category, such as 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. The 
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 does not permit a respondent 
to submit data selectively to support its own conclusions with regard 
to LOT. Specifically, Fagersta stated in its questionnaire response 
that its home market sales were made through one channel of 
distribution to essentially one customer category (i.e., direct sales 
from the mill to the end user).
    Moreover, Fagersta's description in its response of its customer 
categories and channel of distribution in the U.S. market for its EP 
sales was almost identical to its description of those factors in the 
home market (see pages A-14 and A-15 of the October 24, 1997, Fagersta 
Questionnaire Response). Subsequently, Fagersta filed a supplemental 
questionnaire response where it reversed its claim that there was no 
basis for a LOT adjustment (see page nine of the February 2, 1998, 
Supplemental Questionnaire Response). In its supplemental response, 
Fagersta claimed that its home market sales to Gusab occur at a 
different marketing stage than its home market sales to unaffiliated 
customers. Specifically, Fagersta stated its sales to Gusab begin with 
the acquisition of billet from Sandvik and Fagersta's SSWR price to 
Gusab is pegged to Sandvik's billet price. For its sales to 
unaffiliated customers, Fagersta stated that the sale begins with the 
sale of rod by Fagersta without any reference or linkage to the price 
of the billet and without any involvement by the billet supplier 
(either Gusab's parent or Avesta Sheffield) in the transaction (see 
verification exhibit 15J of the May 11, 1998, Fagersta Sales 
Verification Report).
    In addressing Fagersta's argument that the Department should take 
into account the sale of billets from Sandvik to Fagersta as a distinct 
marketing stage for purposes of a LOT adjustment for Fagersta's sales 
of SSWR back to the affiliated Sandvik Group, we note that the statute 
is only concerned with possible differences in the level of trade 
between the NV and the EP or CEP of the subject merchandise. See 
section 773(a)(7)(A) of the Act. Billets are raw material inputs used 
in the production of the SSWR, the subject merchandise. Billets are not 
included in the scope of subject merchandise and, therefore, are not 
subject merchandise. Accordingly, the stage of the production process 
where Sandvik sells billets to Fagersta for further processing into 
SSWR is not relevant for purposes of determining whether sales of the 
subject merchandise in the home market and U.S. market are at different 
LOTs. Moreover, Fagersta has failed to show why the billet price 
setting practice with Sandvik translates into different selling 
functions with respect to Gusab and Fagersta's unaffiliated customers.
    Notwithstanding Fagersta's LOT claims, it is the Department's 
responsibility, not Fagersta's, to determine LOTs. If a respondent 
claims that different LOTs exist, it has the burden of demonstrating 
that. 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. In this case, Fagersta has failed to meet 
its burden of proof of demonstrating that there are in fact two 
separate 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 of the subject merchandise, 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

[[Page 40456]]

quantitatively different functions in selling to them.
    When we compare U.S. sales to home market sales at a different LOT, 
we make a LOT 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 are reflected in the commercial 
designation of customer categories, such as end-user or distributor, 
and selling functions that support such commercial designations. In 
this case, Fagersta sold to end-users in both the U.S. and home 
markets. It is undisputed that these transactions constitute sales 
through the same channel of trade. This indicates that distinct LOTs do 
not exist in this situation.
    Further, an analysis of selling functions supports this conclusion. 
We conducted a comprehensive examination of the available information 
on selling functions provided by Fagersta in this case. The Department 
requested information on selling functions in the original 
questionnaire and supplemental questionnaire and examined the data with 
respect to selected sales at verification.
    With respect to Fagersta's home market sales to its affiliate 
Sandvik, we find that Fagersta and Sandvik should be collapsed in this 
case. Therefore, we find Fagersta's argument that a LOT adjustment with 
respect to home market sales made to Sandvik is moot as we excluded 
those sales from our analysis. With respect to Fagersta's home market 
sales to its affiliates Gusab and Avesta Welding, based upon our 
analysis of the information submitted on the record, we do not find 
that the selling functions performed by Fagersta with respect to these 
affiliated customers and its sales to unaffiliated home market 
customers to be meaningfully different.
    Specifically, Fagersta has repeatedly claimed that it provides 
premium services to its affiliated customers, Gusab and Avesta Welding, 
but not to its unaffiliated customers. However, we find that the vast 
majority of the selling functions were identical. Thus, the critical 
element in establishing different LOTs is the degree to which these 
selling functions are performed with respect to the different 
customers. In this instance, we do not find the evidence concerning the 
alleged differences in the degree to which selling functions are 
performed with respect to affiliated and unaffiliated customers 
establishes different LOTs. Fagersta maintains that although it 
provides technical cooperation and warranty services to both its 
affiliated and unaffiliated customers, the services Fagersta provides 
to its affiliated customers are more substantial in that it provides 
only its affiliated customers with (1) mandatory reservation of 
production capacity to ensure priority production and delivery; (2) 
intensive technical cooperation; (3) access to proprietary information; 
(4) networked data exchange; (5) specialized product applications; (6) 
just-in-time delivery; and (7) billet rebates. Fagersta has attempted 
to emphasize these alleged differences noted above by providing 
documents from meetings Fagersta held with respect to affiliated and 
unaffiliated customers (see verification exhibits 27A through 27D of 
the Fagersta Sales Verification Report). However, in reviewing these 
verification exhibits, we do not find that they establish that the 
services and assistance provided to Fagersta's affiliated customers are 
significantly different from the services and assistance provided to 
Fagersta's unaffiliated U.S. customers. Specifically, the following 
agenda items were discussed in both meetings for affiliated and 
unaffiliated customers: product quality issues, production issues and 
problems, production testing analysis, and customer disputes (see 
exhibits 27A through 27D of the Fagersta Sales Verification Report). 
With respect to the agenda items not mentioned in meetings held on 
unaffiliated customers but mentioned in meetings held on affiliated 
customers (i.e., employee exchange programs, joint marketing 
discussions, coordination of billet production and delivery with rod 
processing and delivery within the Sandvik Group), these agenda items 
would necessarily be topics of discussion between affiliated producers 
of the subject merchandise or between affiliated parties which used the 
subject merchandise for their own accounts. Thus, we find that the 
agenda items where Fagersta discussed its affiliated and unaffiliated 
customers are similar for both customer categories (see exhibits 27A 
through 27D of the Fagersta Sales Verification Report). Although the 
minutes of meetings held for affiliated customers are more detailed 
than the minutes of meetings held for unaffiliated customers, we find 
that the agenda items discussed in meetings for both customer types 
indicate a central focus on Fagersta ensuring the quality of the 
merchandise and Fagersta's ability to deliver the product to the 
customer's specifications. As such, we do not find that there is a 
significant difference in the degree to which Fagersta performs selling 
functions between its affiliated home market and unaffiliated U.S. 
customers. Thus, we disagree with Fagersta that a distinct marketing 
stage exists for its sales to affiliated home market customers, and 
further find that there is no substantial difference in selling 
functions between affiliated and unaffiliated customers in the home and 
U.S. markets.
    Section 773(a)(7)(B) of the Act states that a CEP ``offset'' may be 
made when two conditions exist: (1) normal value is established at a 
level of trade which constitutes a more advanced stage of distribution 
than the level of trade of the CEP; and (2) the data available do not 
provide an appropriate basis for a level of trade adjustment. In this 
case, since we have found no difference in the LOT of the sales in 
question, for the reasons noted above, we do not find that a CEP offset 
adjustment is warranted.
    Comment 4: SSUS' EP Transactions.
    The petitioners argue that the Department must treat SSUS's EP 
sales as CEP sales because the Department found at verification that 
the reported EP sales were also warehoused at SSUS, and that the 
verification report reflects that finding. Moreover, the petitioners 
contend that because these sales were introduced into SSUS' physical 
inventory, SSUS would have necessarily incurred inland freight charges 
for these sales which makes SSUS more than a mere processor of sales 
documentation. Based on the Department's criteria for classifying sales 
as EP, the petitioners urge the Department to treat these EP sales as 
CEP sales.
    Fagersta maintains that the verification report is in error in that 
SSUS' EP sales did not enter its physical inventory, although they did 
enter its financial accounts since SSUS took title to the merchandise. 
Moreover, Fagersta maintains that verification exhibits containing 
bills of lading, freight bills, sales invoices and shipping orders for 
the sales in question demonstrate that

[[Page 40457]]

these sales were shipped directly to the customer and did not enter 
physical inventory in the United States. Therefore, since these sales 
did not incur a warehouse expense, Fagersta argues that the Department 
should continue to treat these sales as EP since they meet the criteria 
for classifying sales as EP.
DOC Position:
    We agree with Fagersta. For the EP sales in question, we find no 
evidence that these sales entered into the physical inventory, as 
opposed to the financial inventory, of SSUS, prior to sale. We find 
that the freight and delivery documentation for selected EP sales 
examined at verification indicates that the subject merchandise was 
shipped directly from Sweden to the U.S. customer's requested delivery 
location. The petitioners' contention that the Department's 
verification report states that the EP sales transactions in question 
entered the physical inventory of SSUS is incorrect. Based on the 
examined freight and delivery documentation at verification, we 
conclude that the inventory journal records both merchandise that was 
physically located at SSUS' warehouse as well as merchandise which did 
not enter SSUS' warehouse but to which SSUS had title. For the sales in 
question, we also find, based on the information examined at 
verification, that the sales followed customary commercial channels 
between the parties involved and that the function of SSUS was limited 
to that of a ``processor of sales-related documentation'' and a 
``communication link'' with the unrelated customer (see Final 
Determinations of Sales at Less Than Fair Value: Brake Drums and Brake 
Rotors from the People's Republic of China, 62 FR 9160, 9171 (February 
28, 1997)). Therefore, we treated the sales in question as EP sales.
    Comment 5: Exclusion or Inclusion of Certain ASI Sales.
    The petitioners contend that, based on verification, the Department 
should remove three sales from the U.S. sales listing (i.e., ASI 
invoice nos. 119548, 122141, and 124740) because these sales were 
outside the POI. In addition, the petitioners contend that the 
Department should include one sale, determined at verification to be 
included both in the U.S. sales listing as well as the exclusion 
worksheet, if that sale was inside the POI (i.e., ASI invoice number 
115936).
    Fagersta contends that for the three sales in question, although 
the ASI invoice date was outside the POI, the Fagersta invoice date was 
inside the POI. Therefore, Fagersta maintains that these three sales 
were correctly included in its U.S. sales listing and that the 
Department should use these sales in the final determination. For the 
other sale in question, Fagersta contends that the sale consisted of 
two shipments from it, one of which originated from a Fagersta invoice 
with an invoice date prior to the POI. Therefore, Fagersta maintains 
that it correctly included in the U.S. sales listing the ASI sale in 
which the Fagersta invoice date was in the POI and correctly excluded 
the ASI sale in which the Fagersta invoice date was prior to the POI. 
Therefore, Fagersta argues that based on the verification findings, it 
is unnecessary for the Department to make revisions to the U.S. sales 
listing for these sales.
DOC Position
    We disagree with the petitioners' argument to exclude the three 
sales from Fagersta's U.S. sales listing. Fagersta reported its U.S. 
sales transactions through its U.S. affiliate ASI as EP sales because 
Fagersta determines the terms of sale (see pages 15 and 17 of the 
Fagersta verification report and pages 8 and 9 of the ASI Verification 
Report). For its reported EP sales transactions, Fagersta used as the 
date of sale the date of its sales invoice to the U.S. unaffiliated 
customer. The Fagersta invoice is also sent to ASI which also issues a 
sales invoice to the U.S. unaffiliated customer with the same terms of 
sale specified on the Fagersta sales invoice. However, in a few cases, 
the ASI sales invoice included merchandise covered by more than one 
Fagersta sales invoice. For the three sales mentioned by the 
petitioners, the sales have an ASI invoice date outside the POI as 
noted in the invoice issued by ASI. However, we determined that they 
were properly included in the U.S. sales listing because they 
correspond to Fagersta invoice dates, which are within the POI. 
(Fagersta, which shipped the merchandise directly to the U.S. customer, 
reported all of its sales to the Department based on whether its 
invoice dates, not ASI's invoice dates, were within the POI). We did 
not note any discrepancies or inconsistencies with Fagersta's sales 
database as far as its quantity and value reconciliation (see Fagersta 
Sales Verification Report at page 9). Furthermore, verification of the 
ASI sales listing showed that these three sales observations were 
manually added to the database in order to be reconciled with 
Fagersta's reported quantity and value (see ASI Verification Report at 
page 7).
    We reviewed documentation concerning the other sale, which was 
included both in ASI's sales listing and its exclusion worksheet (see 
Exhibit 8 of the ASI Verification Report). At verification, we noted 
that the sale in question was invoiced by ASI as one sale, but that it 
actually consisted of merchandise covered by two Fagersta invoices. Of 
these two Fagersta invoices, one has a date prior to the POI, and 
therefore, was properly excluded by ASI from the U.S. sales listing. 
The other Fagersta invoice has a date during the POI and, therefore, 
was properly included by ASI in the U.S. sales listing (see ASI 
Verification Report at page 7).
    Comment 6: Model Matching.
    The petitioners contend that the Department should not rely on 
Fagersta's own internal grade designations for products that would 
otherwise fit within a standard AISI grade simply because Fagersta has 
added small amounts of chemicals that are not otherwise specified as 
being included in the standard AISI grade designation. Therefore, the 
petitioners urge the Department to ensure that all internal product 
codes designated by Fagersta in its questionnaire responses correspond 
to a standard AISI grade code for matching purposes. Otherwise, the 
petitioners allege that the methodology of relying on internal grade 
designations for products that are only sold in the home market 
impermissibly allows Fagersta to exclude certain high-priced sales in 
the home market from the model match process simply by giving these 
internal grade designations a special model match code that would never 
allow it to be compared to a U.S. sale with a different code. Finally, 
the petitioners contend that Fagersta has incorrectly applied the model 
matching methodology devised by the Department by classifying several 
grades in two or more very similar AISI grades. For the final 
determination, the petitioners request that the Department collapse all 
AISI/AWS grades into their simplest three-digit configuration based on 
the suggestions contained in their case brief.
    Fagersta contends that it has grouped its internal grades into bona 
fide AISI/AWS norms where possible, and reported proprietary internal 
grades only where its internal grade did not fall within the chemical 
specifications of any recognized AISI/AWS standard, in accordance with 
the Department's instructions. Fagersta further contends that the 
Department thoroughly tested the accuracy and consistency of its 
internal grade to AISI/AWS assignment at verification and found no 
discrepancies. Alternatively, Fagersta states that if the Department 
were to accept the petitioners' proposed

[[Page 40458]]

alternative to collapse all AISI/AWS grades that begin with the same 
three numbers for purposes of grouping its internal grades, the 
Department would be departing from its own instructions. Moreover, 
Fagersta maintains that the petitioners' application of their proposed 
alternative contained in their case brief is inconsistent as it 
pertains to grouping Fagersta's internal grades. Finally, Fagersta 
states that although it does not object to collapsing all AISI/AWS 
grades into their simplest three-digit configuration, it would object 
if the Department does not undertake this collapsing across the board 
to all AISI/AWS grades.
DOC Position
    We agree with Fagersta. We examined at verification the method 
Fagersta used to assign standard AISI/AWS grades to its internal grades 
based on the chemical specifications of the internal grade. We find 
that Fagersta consistently applied its grade assignment methodology in 
accordance with the Department's instructions contained in our 
questionnaire. Therefore, we do not agree with the petitioners that 
Fagersta classified several grades in two or more very similar AISI 
grades. Finally, we do not agree with the petitioners that we should 
collapse all AISI/AWS grades into their simplest three-digit 
configuration since this alternative would collapse unique AISI/AWS 
grades which differ principally because of a slight, though not 
insignificant, difference in certain chemicals which define the AISI/
AWS grade.
    Comment 7: SSUS Interest Rate.
    Fagersta contends that the Department incorrectly calculated the 
short-term interest rate derived from verification exhibits and must 
correct this typographical error if it intends to use the short-term 
interest rate based on SSUS' POI short-term borrowings for purposes of 
SSUS' credit expenses and inventory carrying costs.
    The petitioners contend that the Department should only use an 
interest rate which is based on short-term loans and should use the 
interest rate as discussed in the verification report to calculate 
credit expenses and inventory carrying costs.
DOC Position
    We agree with Fagersta. Whenever possible the Department uses 
short-term interest rates based on actual loan agreements (see Policy 
Bulletin 98-2: Imputed Credit Expenses and Interest Rates (February 23. 
1998)). SSUS's short-term loan agreements included in verification 
exhibit 26 reflect the only short-term loans entered into during the 
POI. Therefore, the Department calculated the short-term interest rate 
based on actual SSUS POI short-term loan agreements contained in 
verification exhibit 26 for purposes of determining SSUS credit 
expenses and inventory carrying costs. Specifically, we used the 
interest rate noted in Fagersta's post-verification May 28, 1998, 
submission and not the interest rate noted in our verification report 
which was in error (see Final Calculation Memorandum for further 
details).
    Comment 8: Corrections to Certain SSUS and Amstek Expenses and 
Corrections to Dates of Sale for Certain SSUS Sales.
    The petitioners contend that the Department should revise SSUS' 
early payment discounts, duty and brokerage and handling expenses and 
inland freight warehouse transfers for all sales and the dates of sale 
for certain sales transactions based on the verification findings. In 
addition, the petitioners contend that the Department should revise 
Amstek warranty expenses based on the verification findings.
    Fagersta states that the Department should correct for the clerical 
errors identified by Fagersta or otherwise found by the Department 
based on the verification findings.
DOC Position
    For the reasons stated above, we agree with both parties and have 
revised the above mentioned company-specific discounts and expenses 
based on our verification findings for purposes of the final 
determination.
    Comment 9: SSUS' International Freight Expense.
    The petitioners contend that Fagersta should have reported the 
actual international freight expense incurred for certain transactions 
rather than an average international freight expense. The petitioners 
maintain that this error is so egregious that the Department should use 
facts available to calculate this expense for those transactions 
affected by the error. For facts available, the petitioners urge the 
Department to use the highest calculated international freight expense 
for all sales rather than their revised calculations.
    Fagersta contends that the Department's verification demonstrated 
that for the sales in question, it had incorrectly reported an average 
freight expense when it should have reported the transaction-specific 
expense for these sales based on its claim that these sales should be 
treated as EP transactions instead of as CEP transactions. Fagersta 
also contends that it provided the Department the transaction-specific 
freight expenses for these sales at verification which were examined by 
Department officials. Therefore, Fagersta maintains that the error in 
question is minor in nature and that the Department should use the 
transaction-specific expenses and not resort to adverse facts available 
for its claimed EP sales transactions for purposes of the final 
determination.
DOC Position
    We agree with Fagersta. We examined the correct expense data for 
the sales in question at verification. Since we have treated these 
sales as EP transactions, we find that Fagersta erred in reporting an 
average POI international freight expense for its EP sales transactions 
when it should have reported the average expense for its CEP sales 
transactions only. Therefore, we used the actual freight expenses for 
the EP sales transactions, based on our verification findings.
    Comment 10: Quantity Variable Used in Margin Program.
    Fagersta claims that in its preliminary margin calculation program, 
the Department overstated the total U.S. quantity and value figures by 
using the same quantity variable to derive weighted-average U.S. 
prices, selling expenses, packing expenses, commissions and exchange 
rates as it did to determine the total U.S. sales quantity and U.S. 
sales value for purposes of calculating the dumping margin. To correct 
this error, Fagersta urges the Department to use the appropriate 
variable to derive the U.S. sales quantity and value.
    The petitioners did not comment on this issue.
DOC Position
    We agree with Fagersta and made the appropriate change in the final 
calculation margin program (see Final Calculation Memorandum).
Cost Issues
    Comment 11: Calculation of CV Profit.
    Fagersta claims that in the margin program for the preliminary 
determination, the Department erred in its calculation of CV profit by 
using an improper denominator. According to Fagersta, the Department 
calculated the amount of CV profit by: (1) Calculating a profit rate by 
dividing the total profit earned on home market sales by the company's 
production costs inclusive of only manufacturing costs, G&A and 
interest expenses, and (2) applying this profit rate to the sum of 
manufacturing costs, selling, G&A and interest expenses to derive the 
amount of profit. Thus, Fagersta contends that the profit

[[Page 40459]]

rate was not calculated and applied on a consistent basis, resulting in 
an overstatement of the profit included in CV.
    The petitioners argue that the methodology used by the Department 
to calculate CV profit was proper and in accordance with its 
established practice.
DOC Position
    We disagree with Fagersta that we incorrectly calculated CV profit. 
In our preliminary margin program, we calculated CV profit in the 
following manner: (1) We calculated the total profit earned on home 
market sales and divided the profit by total production costs, 
inclusive of only manufacturing costs, G&A and interest expenses to 
derive a profit rate; (2) we then multiplied the calculated profit rate 
by the sum of manufacturing costs, G&A and interest expenses. Contrary 
to the Fagersta's claim, we did not include selling expenses in our 
calculation of CV profit. Thus, we calculated and applied the profit 
rate on a consistent basis. Accordingly, we did not make any changes in 
the final margin program with respect to calculation of CV profit.
    Comment 12: Sandvik's Reported General Expenses.
    The petitioners contend that in calculating the cost of the billets 
that Fagersta purchased from its affiliated supplier, Sandvik Steel, 
the Department should make the adjustments to Sandvik's submitted 
general expenses that it identified in its verification report. That 
is, according to petitioners, Sandvik's general expenses should be 
derived on a company-wide basis using the company's 1996 audited 
financial statement. Moreover, petitioners note that the Department 
should adjust the component of the general expenses representing 
Sandvik Holding Company's general and administrative (``G&A'') expense 
to reflect costs that the Department found to be inappropriately 
excluded from billet production costs.
    Fagersta argues that the Department should accept the general 
expenses reported in Sandvik's normal internal accounting system at the 
product line level, rather than computing a company-wide rate. 
Alternatively, Fagersta contends that if the Department uses a company-
wide rate, it must exclude research and development expenses and 
selling expenses incurred by product lines that are unrelated to the 
subject merchandise.
    In addition, Fagersta disputes the petitioners' assertion that the 
Department determined Sandvik Holding Company's G&A rate to be 
incorrect. According to Fagersta, the Department simply noted that 
insurance expenses paid to a subsidiary and a write-down of internal 
receivables were both excluded from the G&A computation. Fagersta 
argues that these items were properly excluded from Sandvik Holding's 
G&A rate because both are inter-company expenses that are eliminated in 
the consolidated financial statements of Sandvik AB.
DOC Position
    We disagree with Fagersta's contention that the Department should 
accept Sandvik's reported general expense rate computation. Our normal 
methodology for allocating general expenses to individual products is 
to calculate a rate by dividing the company's general expenses by its 
total COS, as reported in the respondent's audited financial statements 
(see the Department's standard Section D questionnaire at page D-17). 
This method recognizes that general expenses are costs that relate to 
the company's overall operations, rather than to the operations of a 
division within the company or to a single product line (see Final 
Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat 
Products, and Certain Corrosion-Resistant Carbon Steel Flat Products 
From Japan, 58 FR 37154, 37166 (July 9, 1993). The approach is intended 
to recognize the general nature of these expenses and the fact that 
many of these expenses are incurred in supporting a range of the 
overall company's various operations. This approach is consistent with 
Generally Accepted Accounting Principles (``GAAP'') treatment of such 
costs as period expenses.
    In its submission, Sandvik deviated from the Department's normal 
methodology and calculated its general expenses using an internal 
accounting methodology, under which the company charged some general 
expenses directly to specific product lines, while allocating other 
such expenses across product lines. When a respondent abandons a normal 
Department methodology in favor of an alternative one, it is incumbent 
upon the respondent to satisfy a higher threshold for proving the 
reasonableness and accuracy of its chosen approach. In this case, 
however, Sandvik did not provide any documentation or support for the 
methodology underlying the allocation of its general expenses among 
different divisions and product lines within the company. In addition, 
Sandvik did not clearly differentiate between general expenses incurred 
directly at a product-line level and those amounts incurred at the 
higher, divisional and parent company levels. Although during 
verification Sandvik Steel presented data showing that, for managerial 
reporting purposes, the company followed the multi-tiered allocation of 
general expenses reported for COP and CV, the company did not 
demonstrate whether this system more accurately captured general 
expenses of the subject merchandise than under the Department's normal, 
company-wide calculation method. Specifically, Sandvik failed to 
demonstrate that expenses it allocated to both subject and non-subject 
merchandise were, indeed, the expenses incurred for those particular 
products. Further, Sandvik presented no evidence as to the 
reasonableness of its internal accounting system. In effect, at 
verification, Sandvik documented how its general expenses were spread 
throughout the company, but provided no documentation to support the 
resulting accuracy or validity of such reporting. Because Sandvik 
failed to adequately demonstrate that only those general expenses 
(including R&D and selling expenses) that were completely unrelated to 
subject merchandise were excluded from its submitted general expense 
rate calculation, the Department recomputed Sandvik's general expense 
rate on a company-wide basis, in accordance with its normal 
methodology.
    We further disagree with Fagersta's assertion that the insurance 
expenses that Sandvik Holding Company paid to a subsidiary and the 
write-down of internal receivables should be excluded from the 
calculation of the Sandvik Holding Company component of Sandvik's 
general expense rate. Fagersta's justification that both are internal 
items that are eliminated in Sandvik AB's consolidation is irrelevant. 
The Department does not compute general expenses at the consolidated 
level. The fact that these expenses are related to transactions with 
affiliated parties does not negate the fact that they are expenses 
incurred by Sandvik Holding Company. Therefore, we computed the Sandvik 
Holding Company component of Sandvik's general expense rate, inclusive 
of the insurance expenses and the write-down of internal receivables.
    Comment 13: Adjustments to Avesta Cost Data.
    The petitioners contend that because the Department did not conduct 
a full-scale verification of Avesta's COP data, it must make the same 
adjustments to Avesta's SSWR billet COP data as it intends to make to 
Sandvik's SSWR

[[Page 40460]]

billet COP data based on verification at Sandvik.
    Fagersta argues that the Department should not make any adjustments 
to Avesta's general expenses or manufacturing costs to correspond to 
adjustments to Sandvik's reported SSWR billet production costs simply 
because the Department did not conduct a complete cost verification of 
Avesta. Fagersta maintains that Avesta reported its costs in accordance 
with its books and records and that the Department did not note any 
significant errors in Avesta's cost submission during verification.
DOC Position
    We disagree with the petitioners' assertion that we must make the 
same numerical adjustments to Avesta's SSWR billet COP data as we make 
to Sandvik's SSWR billet COP data. We note, however, that we intend to 
apply consistent methodologies to both companies. In this regard, the 
only adjustment to Sandvik's SSWR billet COP made by the Department 
relates to Sandvik's general expense rate. The Department tested 
Avesta's submitted general expense rate during verification and 
adjusted the rate to reflect Avesta's company-wide general expenses in 
a manner consistent with our treatment of Sandvik's general expenses.
    Comment 14: Standard Material Cost Discrepancy.
    The petitioners state that Sandvik's reported billet costs 
incorrectly reflect the company's 1995, rather than 1996, standard 
costs. The petitioners contend that the Department should adjust 
Sandvik's submitted SSWR billet COP to account for the difference 
between 1995 and 1996 standard costs.
    Fagersta claims that the Department did not identify any errors in 
Sandvik's standard costs or actual manufacturing costs for producing 
billets. Further, Fagersta claims the 1995 versus 1996 standard cost 
discrepancy necessitates no adjustment to Fagersta's reported costs 
because Fagersta reported its actual manufacturing costs in accordance 
with its normal books and records. Fagersta asserts that such a 
standard cost discrepancy adjustment would overstate costs by using 
standards that are not reflected in the audited financial statements 
and would ignore a corresponding offset for the increase in the 
favorable material cost variance.
DOC Position
    We disagree with the petitioners' assertion that the Department 
should adjust Sandvik's submitted SSWR billet COP to account for the 
difference between the 1995 and 1996 standard costs. At the 
Department's request, Fagersta submitted its SSWR production costs 
under two different scenarios, one based on the transfer price of 
billets purchased from affiliated suppliers and the other based on the 
cost of producing these billets. The issue addressed above by the 
petitioners and the respondent, as raised in the Department's cost 
verification report, regards the accuracy of the Fagersta SSWR product 
specific material (billet) cost, based on billet transfer price. 
Because it involves Fagersta's standard costs used in its normal 
accounting system to record purchases of billets, it does not have an 
impact on any margin calculations that are based on the billet 
suppliers' cost of production. Rather, it only has an impact on 
Fagersta's SSWR production costs based on the billet transfer price. 
Additionally, because Fagersta's error was in failing to revise its 
1995 standard costs to reflect its computed 1996 standard costs for 
billets purchased from Sandvik, it should only have an impact on 
Fagersta material costs for SSWR made with billets purchased from 
Sandvik. Because the Department is collapsing Fagersta and Sandvik, the 
major input rule should not be used to value the billets purchased from 
Sandvik. Rather, Fagersta's usage of Sandvik sourced billets should be 
based on Sandvik's billet COP. Therefore, there is no need to adjust 
Fagersta's submitted costs based on billet transfer prices to reflect 
the difference between the 1995 and 1996 standard cost of the billets 
purchased from Sandvik.
    Comment 15: Revisions to SSUS' G&A and Interest Expenses.
    The petitioners contend that the Department should increase both 
SSUS' reported G&A expense rate and financial expense rate applied in 
determining further manufacturing costs, based on the errors presented 
by SSUS officials at verification.
    Fagersta contends that verification findings reflect a difference 
in rounding methodology used by SSUS and by the Department. Therefore, 
Fagersta maintains that the errors the petitioners propose be made have 
so small an effect on the final margin that the Department need not 
make any changes in this regard in its final determination.
DOC Position
    We disagree with the petitioners' claim that we should increase 
both SSUS's reported G&A expense rate and financial expense rate. 
However, as we indicated at page 44 of our May 19, 1998, verification 
report, Fagersta corrected the SSUS G&A rate in the revised further 
manufacturing cost file submitted on April 29, 1998, and there is no 
need to adjust the financial expense. The Department determined that 
the Sandvik financial expense factor, rather than the SSUS factor, 
should be applied to SSUS further manufacturing costs. The financial 
expense requires no adjustment to reflect Sandvik's factor because it 
would have no impact on the reported costs.

Continuation of Suspension of Liquidation

    In accordance with section 733(d)(1) and 735(c)(4)(B) of the Act, 
we are directing the Customs Service to continue to suspend liquidation 
of all entries of subject merchandise from Sweden, that is entered, or 
withdrawn from warehouse, for consumption on or after March 5, 1998 
(the date of publication of the preliminary determination in the 
Federal Register). The Customs Service shall continue to require a cash 
deposit or posting of a bond equal to the estimated amount by which the 
normal value exceeds the U.S. price as shown below. These suspension of 
liquidation instructions will remain in effect until further notice. 
The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted- 
                                                               average  
                   Exporter/manufacturer                        margin  
                                                              percentage
------------------------------------------------------------------------
Fagersta Stainless AB......................................         5.71
All Others.................................................         5.71
------------------------------------------------------------------------

Pursuant to section 735(c)(5)(A) of the Act, the Department has 
excluded all zero and de minimis weighted-average dumping margins from 
the calculation of the ``All Others'' rate.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our determination. As our final 
determination is affirmative, the ITC will, within 45 days, determine 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry. If the ITC determines that material 
injury, or threat of material injury does not exist, the proceeding 
will be terminated and all securities posted will be refunded or 
canceled. If the ITC determines that such injury does exist, the 
Department will issue an antidumping duty order directing Customs 
officials to assess antidumping duties on all imports of the subject 
merchandise entered for consumption on or after the effective date of 
the suspension of liquidation.

[[Page 40461]]

    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: July 20, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-20021 Filed 7-28-98; 8:45 am]
BILLING CODE 3510-DS-D