[Federal Register Volume 64, Number 145 (Thursday, July 29, 1999)]
[Notices]
[Pages 41198-41202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19300]



[[Page 41197]]

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Part II





Department of Commerce





_______________________________________________________________________



International Trade Administration



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Preliminary Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon-Quality Steel Plate Products From France; India; 
Indonesia; Italy; Japan and the Republic of Korea; Notice

  Federal Register / Vol. 64, No. 145 / Thursday, July 29, 1999 / 
Notices  

[[Page 41198]]



DEPARTMENT OF COMMERCE

International Trade Administration
[A-427-816]


Preliminary Determination of Sales at Less Than Fair Value: 
Certain Cut-To-Length Carbon-Quality Steel Plate Products from France

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

EFFECTIVE DATE: July 29, 1999.

FOR FURTHER INFORMATION CONTACT: Jim Terpstra or Frank Thomson, Group 
II, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3965 or (202) 482-4793, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Round Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all references are made to the Department's 
regulations at 19 CFR Part 351 (1998).

Preliminary Determination

    We preliminarily determine that certain cut-to-length carbon-
quality steel plate products (``CTL plate'') from France are being, or 
are likely to be, sold in the United States at less than fair value 
(``LTFV''), as provided in section 733 of the Act. The estimated 
margins of sales at LTFV are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    Since the initiation of this investigation (Notice of Initiation of 
Antidumping Investigations: Certain Cut-To-Length Carbon-Quality Steel 
Plate from Czech Republic, France, India, Indonesia, Italy, Japan, 
Republic of Korea, and Former Yugoslav Republic of Macedonia (64 FR 
12959, March 16, 1999)) (``Initiation Notice''), the following events 
have occurred:
    In their petition, the petitioners 1 identified Usinor 
S.A. (``Usinor'') and its affiliates, Creusot Loire Industrie 
(``CLI''), and GTS Industries S.A. (``GTS'') as possible exporters of 
CTL plate from France. We requested on March 12, 1999, data on all 
producers and exporters of the subject merchandise during the period of 
investigation (``POI'') from the American Embassy in Paris. Based on 
information on the record we issued antidumping questionnaires to 
Usinor, CLI and GTS on March 17, 1999. 2
---------------------------------------------------------------------------

    \1\ The petitioners are Bethlehem Steel Corporation, Gulf States 
Steel, Inc., IPSCO Steel Inc., the United Steelworkers of America, 
and the U.S. Steel Group (a unit of USX Corporation).
    \2\ Section A of the questionnaire requested general information 
concerning the company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the sales of 
that merchandise in all markets. Sections B and C of the 
questionnaire requested home market sales listings and U.S. sales 
listings. Section D of the questionnaire requested information 
regarding the cost of production of the foreign like product and the 
constructed value of the merchandise under investigation. Section E 
of the questionnaire requested information regarding the cost of 
further manufacture or assembly performed in the United States.
---------------------------------------------------------------------------

    In April 1999, the United States International Trade Commission 
(``ITC'') issued an affirmative preliminary injury determination in 
this case (see ITC Investigation No. 731-TA-815-822).
    On May 10, 1999, Usinor submitted a consolidated response to 
sections A, B, and C of the questionnaire on behalf of GTS and Sollac 
S.A. (``Sollac'') (collectively referred to as ``Usinor''). Usinor 
identified Sollac in its questionnaire responses as an affiliated 
producer of subject merchandise during the POI. Usinor submitted a 
response to section D of the questionnaire on May 14, 1999, and a 
response to section E on May 21, 1999.
    On April 12, 1999, Usinor requested that it be allowed not to 
report information for the following entities that are affiliated with 
Usinor: 1) Eurodecoupe, a maker of precision-cut specialty shapes that 
sold subject merchandise in the home market; 2) CLI, a maker of 
specialty steel intended for nuclear and high pressure applications; 
and 3) certain affiliated downstream service centers/reprocessors. 
Based on the reasons and factual representations outlined in Usinor's 
request, on May 14, 1999, we granted this request and allowed Usinor to 
exclude these sales from its response. However, we indicated that we 
would review this matter at verification.
    We issued a supplemental questionnaire for Sections A, B, and C to 
Usinor in May 1999 and received a response to this questionnaire along 
with revised home market and U.S. sales listings in June 1999. We 
issued a supplemental questionnaire for Sections D and E to Usinor in 
June 1999 and received a response to this questionnaire in June 1999. 
We received revised home market and U.S. sales listings, along with 
revised cost of production, constructed value, and further 
manufacturing cost tapes in July 1999.
    In May and June 1999, Usinor submitted additional clarifications to 
its responses. Also, on July 9, 1999, petitioners submitted comments 
for the Department's consideration in the preliminary determination.

Scope of Investigation

    The products covered by the scope of this investigation are certain 
hot-rolled carbon-quality steel: (1) Universal mill plates (i.e., flat-
rolled products rolled on four faces or in a closed box pass, of a 
width exceeding 150 mm but not exceeding 1250 mm, and of a nominal or 
actual thickness of not less than 4 mm, which are cut-to-length (not in 
coils) and without patterns in relief), of iron or non-alloy-quality 
steel; and (2) flat-rolled products, hot-rolled, of a nominal or actual 
thickness of 4.75 mm or more and of a width which exceeds 150 mm and 
measures at least twice the thickness, and which are cut-to-length (not 
in coils). Steel products to be included in this scope are of 
rectangular, square, circular or other shape and of rectangular or non-
rectangular cross-section where such non-rectangular cross-section is 
achieved subsequent to the rolling process (i.e., products which have 
been ``worked after rolling'')--for example, products which have been 
beveled or rounded at the edges. Steel products that meet the noted 
physical characteristics that are painted, varnished or coated with 
plastic or other non-metallic substances are included within this 
scope. Also, specifically included in this scope are high strength, low 
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium, 
titanium, vanadium, and molybdenum. Steel products to be included in 
this scope, regardless of Harmonized Tariff Schedule of the United 
States (HTSUS) definitions, are products in which: (1) Iron 
predominates, by weight, over each of the other contained elements, (2) 
the carbon content is two percent or less, by weight, and (3) none of 
the elements listed below is equal to or exceeds the quantity, by 
weight, respectively indicated: 1.80 percent of manganese, or 1.50 
percent of silicon, or 1.00 percent of copper, or 0.50 percent of 
aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or 
0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of 
tungsten, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or 
0.41 percent of titanium, or 0.15 percent of vanadium, or 0.15

[[Page 41199]]

percent zirconium. All products that meet the written physical 
description, and in which the chemistry quantities do not equal or 
exceed any one of the levels listed above, are within the scope of 
these investigations unless otherwise specifically excluded. The 
following products are specifically excluded from these investigations: 
(1) Products clad, plated, or coated with metal, whether or not 
painted, varnished or coated with plastic or other non-metallic 
substances; (2) SAE grades (formerly AISI grades) of series 2300 and 
above; (3) products made to ASTM A710 and A736 or their proprietary 
equivalents; (4) abrasion-resistant steels (i.e., USS AR 400, USS AR 
500); (5) products made to ASTM A202, A225, A514 grade S, A517 grade S, 
or their proprietary equivalents; (6) ball bearing steels; (7) tool 
steels; and (8) silicon manganese steel or silicon electric steel.
    The merchandise subject to these investigations is classified in 
the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030, 
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050, 
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000, 
7226.91.8000, 7226.99.0000.
    Although the HTSUS subheadings are provided for convenience and 
Customs purposes, the written description of the merchandise under 
investigation is dispositive.

Scope Comments

    As stated in our notice of initiation, we set aside a period for 
parties to raise issues regarding product coverage. In particular, we 
sought comments on the specific levels of alloying elements set out in 
the description above, the clarity of grades and specifications 
excluded from the scope, and the physical and chemical description of 
the product coverage.
    On March 29, 1999, Usinor, a respondent in the French antidumping 
and countervailing duty investigations and Dongkuk Steel Mill Co., Ltd. 
and Pohang Iron and Steel Co., Ltd., respondents in the Korean 
antidumping and countervailing duty investigations (collectively the 
Korean respondents), filed comments regarding the scope of the 
investigations on CTL plate and the Department's model matching 
criteria. On April 14, 1999, the petitioners filed comments regarding 
Usinor's and the Korean respondents' comments regarding model matching. 
In addition, on May 17, 1999, ILVA S.p.A. (ILVA), a respondent in the 
Italian antidumping and countervailing duty investigations, requested 
guidance on whether certain products are within the scope of these 
investigations.
    Usinor requested that the Department modify the scope to exclude: 
(1) Plate that is cut to non-rectangular shapes or that has a total 
final weight of less than 200 kilograms; and (2) steel that is 4'' or 
thicker and which is certified for use in high-pressure, nuclear or 
other technical applications; and (3) floor plate (i.e., plate with 
``patterns in relief'') made from hot-rolled coil. Further, Usinor 
requested that the Department provide clarification of scope coverage 
with respect to what it argues are over-inclusive HTSUS subheadings 
included in the scope language.
    The Department has not modified the scope of these investigations 
because the current language reflects the product coverage requested by 
the petitioners, and Usinor's products meet the product description. 
With respect to Usinor's clarification request, we do not agree that 
the scope language requires further elucidation with respect to product 
coverage under the HTSUS. As indicated in the scope section of every 
Department antidumping and countervailing duty proceeding, the HTSUS 
subheadings are provided for convenience and Customs purposes only; the 
written description of the merchandise under investigation or review is 
dispositive.
    The Korean respondents requested confirmation whether the maximum 
alloy percentages listed in the scope language are definitive with 
respect to covered HSLA steels.
    At this time, no party has presented any evidence to suggest that 
these maximum alloy percentages are inappropriate. Therefore, we have 
not adjusted the scope language. As in all proceedings, questions as to 
whether or not a specific product is covered by the scope and, hence, 
must be reported, should be timely raised with Department officials.
    ILVA requested guidance on whether certain merchandise produced 
from billets is within the scope of the current CTL plate 
investigations. According to ILVA, the billets are converted into wide 
flats and bar products (a type of long product). ILVA notes that one of 
the long products, when rolled, has a thickness range that falls within 
the scope of these investigations. However, according to ILVA, the 
greatest possible width of these long products would only slightly 
overlap the narrowest category of width covered by the scope of the 
investigations. Finally, ILVA states that these products have different 
production processes and properties than merchandise covered by the 
scope of the investigations and therefore are not covered by the scope 
of the investigations.
    As ILVA itself acknowledges, the particular products in question 
appear to fall within the parameters of the scope and, therefore, we 
are preliminarily treating them as covered merchandise.

Period of Investigation

    The POI is January 1, 1998 through December 31, 1998.

Fair Value Comparisons

    To determine whether sales of CTL plate from France to the United 
States were made at less than fair value, we compared the constructed 
export price (``CEP'') to the Normal Value (``NV''), as described in 
the ``Constructed Export Price'' and ``Normal Value'' sections of this 
notice, below. In accordance with section 777A(d)(1)(A)(i) of the Act, 
we calculated weighted-average CEPs for comparison to weighted-average 
NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by Usinor covered by the description in the ``Scope 
of Investigation'' section, above, and sold in France during the POI, 
to be foreign like products for purposes of determining appropriate 
product comparisons to U.S. sales. We compared U.S. sales to sales made 
in the home market, where appropriate. 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. 
In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by the respondents in 
the following order of importance (which are identified in Appendix V 
of the questionnaire): Painting, quality, grade specification, heat 
treatment, nominal thickness, nominal width, patterns in relief, and 
descaling.
    Because Usinor had no sales of non-prime merchandise in the United 
States during the POI, we did not use home market sales of non-prime 
merchandise in our product comparisons (see, e.g., Final Determination 
of Sales at Less Than Fair Value: Stainless Steel Wire

[[Page 41200]]

Rod from Sweden (63 FR 40449, 40450, July 29, 1998) (``SSWR'')).

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (``LOT'') as the EP or CEP transaction. The NV 
LOT is that of the starting-price sales in the comparison market or, 
when NV is based on constructed value (``CV''), that of the sales from 
which we derive selling, general and administrative (``SG&A'') expenses 
and profit. With respect to U.S. price and CEP transactions, the LOT is 
the level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level, and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP-offset provision). See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate from South Africa, 62 FR 61731 (November 19, 1997).
    Usinor reported three customer categories (i.e., steel service 
centers/resellers, pipe makers and original equipment manufacturers) 
and five channels of distribution in the home market (i.e., sales made 
by Usinor's affiliated producer Sollac, through its affiliated sales 
network Sollac Vente France (SVF), directly to unaffiliated service 
centers or end users (Channel 1), sales from Sollac, through SVF, to 
its affiliated steel service center, SLPM, together with subsequent 
resales by SLPM to unaffiliated end users (Channel 2), sales made by 
Usinor's affiliated producer GTS Industries (GTS) directly to its 
affiliated customer Europipe (Channel 3), sales made by GTS, through 
SVF, directly to unaffiliated service centers or end users (Channel 4), 
and sales from GTS, through SVF, to its affiliated steel service 
center, SLPM, together with subsequent resales by SLPM to unaffiliated 
end users (Channel 5)).
    We determined that Usinor sold merchandise at two LOTs in the home 
market during the POI. The first LOT involved sales through Channels 1, 
3 and 4. The second LOT involved Usinor's sales through its affiliated 
steel service center, SLPM, in Channels 2 and 5. We found significant 
distinctions in selling activities and associated expenses between the 
sales through Channels 2 and 5 and those through Channels 1, 3 and 4. 
Based on these differences, we conclude that two LOTs existed in the 
home market. From our analysis of the marketing process for these 
sales, we also determined that sales through Channels 2 and 5 were made 
at a more remote marketing stage than that for sales through Channels 
1, 3 and 4. Because the large number of channels of distribution and 
selling expenses involved in this analysis presents difficulty in 
providing an adequate summary in this notice, see the LOT/CEP 
Memorandum for a detailed explanation of the above, dated July 19, 
1999, on file in Import Administration's Central Records Unit 
(``CRU''), Room B-099, U.S. Department of Commerce, 14th and 
Constitution Avenue, NW, Washington, DC.
    Usinor reported three customer categories (i.e., steel service 
centers/resellers, pipe makers and original equipment manufacturers) 
and three channels of distribution in the United States: 1) CEP sales 
made by Sollac, through its affiliated U.S. importer Francosteel, to 
unaffiliated service centers or end users (Channel 6), 2) CEP sales 
made by GTS, through its affiliated U.S. importer Francosteel, to 
unaffiliated service centers or end users (Channel 7), and 3) CEP sales 
from GTS directly to its affiliate Berg Steel, who further manufactured 
the subject merchandise into non-subject merchandise, pipe, and resold 
it to unaffiliated end users (Channel 8).
    In order to determine whether separate LOTs actually existed 
between the U.S. and home market, we reviewed the selling activities 
associated with each channel of distribution. We determined that fewer 
and different selling functions were performed for Usinor's CEP sales 
than for sales at either of the home market LOTs and these differences 
constitute differences in LOT. Therefore, we examined whether a LOT 
adjustment was appropriate. The Department makes this adjustment when 
it is demonstrated that a difference in LOTs affects price 
comparability. See The Statement of Administrative Action accompanying 
the URAA, H.R. Doc. No. 316, 103d Cong., 2d Sess. (1994) (hereinafter, 
the ``SAA'') at 829-830. However, where the available data do not 
provide an appropriate basis upon which to determine a LOT adjustment, 
and where the NV is established at a LOT that is at a more advanced 
stage of distribution than the LOT of the CEP transactions, we adjust 
NV under section 773(a)(7)(B) of the Act (the CEP offset provision). 
Because the LOT of the U.S. sales is different than either home market 
LOTs, there is no reliable basis for quantifying a LOT adjustment in 
accordance with section 773(a)(7)(A) of the Act. Further, we found that 
the home market sales were at a more advanced stage of distribution 
compared to sales at either U.S. LOT. Therefore, a CEP offset was 
applied to NV for the NV-CEP comparisons. Because the large number of 
channels of distribution and selling expenses involved in this analysis 
presents difficulty in providing an adequate summary in this notice, 
see the LOT/CEP Memorandum for a detailed explanation of our analysis.

Constructed Export Price

    Usinor reported as CEP transactions the resales of its subject 
merchandise by Francosteel to unaffiliated customers in the United 
States (channels 6 and 7). We calculated CEP, in accordance with 
subsection 772(b) of the Act, based on those sales to the first 
unaffiliated purchaser that took place after importation into the 
United States.
    In addition, Usinor reported as CEP transactions sales of pipe 
products which were further manufactured from CTL plate (subject 
merchandise) by one of its affiliates in the United States (channel 8). 
For these sales we used the price to the first unaffiliated customer 
and deducted the costs of further manufacturing, in accordance with 
section 772(d)(2) of the Act. We used the information in Usinor's 
Section E response to calculate further manufacturing costs, except in 
the following instances where the data were not properly quantified or 
valued: (1) We increased the reported further manufacturing costs 
because we disallowed an adjustment made to coating costs, (2) we 
revised the reported further manufacturing G&A expense rate to reflect 
the change we made to coating costs, and (3) we revised the reported 
further manufacturing interest expense to reflect the interest expenses 
incurred by Berg Steel Pipe Corporation (``Berg''), Usinor's affiliate 
that further manufactures the plate in the United States. For further 
information see

[[Page 41201]]

Memorandum to Neal Halper, dated July 19, 1999.
    We based CEP on the packed FOB or delivered prices to unaffiliated 
purchasers in the United States. We made adjustments to the starting 
price, where appropriate, for freight revenue, interest revenue, and 
billing adjustments. We made deductions for early payment discounts and 
rebates, where applicable. We also made deductions for movement 
expenses in accordance with section 772(c)(2)(A) of the Act; these 
included, where appropriate, foreign inland freight, foreign brokerage 
and handling, ocean freight, marine insurance, U.S. brokerage and 
handling, foreign trade zone fees, U.S. customs duties (including 
harbor maintenance fees and merchandise processing fees), and U.S. 
inland freight expenses (freight from warehouse to the customer). In 
accordance with section 772(d)(1) of the Act, we deducted those selling 
expenses associated with economic activities occurring in the United 
States, including direct selling expenses (credit costs, warranty 
expenses, and other direct selling expenses), inventory carrying costs, 
other indirect selling expenses, and commissions. We also deducted an 
amount for further-manufacturing costs, where applicable, in accordance 
with section 772(d)(2) of the Act and made an adjustment for profit in 
accordance with section 772(d)(3) of the Act.

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.
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 Usinor's volume of home market sales of the 
foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act. 
Because Usinor'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 Usinor.
2. Affiliated-Party Transactions and Arm's-Length Test
    We have applied the arm's-length test to affiliated-party 
transactions by comparing them to sales of identical merchandise from 
Usinor to unaffiliated home market customers. If these affiliated-party 
sales satisfied the arm's-length test, we used them in our analysis. 
Sales to affiliated customers in the home market not made at arm's-
length prices (if any) were excluded from our analysis because we 
considered them to be outside the ordinary course of trade. See 19 CFR 
351.102.
    To test whether these sales were made at arm's-length prices, we 
compared on a model-specific basis the starting prices of sales to 
affiliated and unaffiliated customers net of all movement charges, 
direct selling expenses, discounts and rebates, and packing. Where, for 
the tested models of subject merchandise, prices to the affiliated 
party were on average 99.5 percent or more of the price to the 
unaffiliated parties, we determined that sales made to the affiliated 
party were at arm's length. See 19 CFR 351.403(c) and 62 FR at 27355. 
In instances where no price ratio could be constructed for an 
affiliated customer because identical merchandise was not sold to 
unaffiliated customers, we were unable to determine that these sales 
were made at arm's-length prices and, therefore, excluded them from our 
LTFV analysis. Where the exclusion of such sales eliminated all sales 
of the identical or most similar comparison product, we made a 
comparison to the next most similar model. See, (e.g., SSWR).
3. Cost of Production Analysis
    In their petition, the petitioners submitted an allegation pursuant 
to section 773(b)(1) of the Act that Usinor had made sales in the home 
market at less than the cost of production (``COP''). Our analysis of 
the allegation indicated that there were reasonable grounds to believe 
or suspect that Usinor sold CTL plate in the home market at prices less 
than the COP. Accordingly, we initiated COP investigations with respect 
to Usinor to determine whether sales were made at prices less than the 
COP pursuant to section 773(b) of the Act (see Initiation Notice, 64 FR 
12959, 12962).
    We conducted the COP analysis described below.

A. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of Usinor's cost of materials and fabrication for the 
foreign like product, plus amounts for home market selling, general and 
administrative expenses (``SG&A''), interest expense, and packing 
costs.
    We relied on the COP data Usinor submitted in its Section D 
questionnaire responses, without adjustment, to calculate weighted-
average COPs for the POI.

B. Test of Home Market Sales Prices

    We compared the weighted-average COP figures to home market sales 
of the foreign like product as required under section 773(b) of the 
Act, in order to determine whether these sales had been made at prices 
below COP. In determining whether to disregard home market sales made 
at prices less than the COP, we examined whether (1) within an extended 
period of time, such sales were made in substantial quantities, and (2) 
such sales were made at prices which permitted the recovery of all 
costs within a reasonable period of time. On a product-specific basis, 
we compared the COP to the home market prices, less any applicable 
movement charges, rebates, discounts, and direct and indirect selling 
expenses.

C. Results of the COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of respondent's sales of a given product were at prices less 
than the COP, we do not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Alternatively, where 20 percent or more of 
a respondent's sales of a given product during the POI (normally equal 
to one year, but not less than six months) are at prices less than the 
COP, we determined that such sales have been made in ``substantial 
quantities'' in accordance with sections 773(b)(2)(B) and (C) of the 
Act. In such cases, because we compared prices to POI average costs, we 
also determined that such sales were not made at prices which would 
permit recovery of all costs within a reasonable period of time in 
accordance with section 773(b)(2)(D) of the Act. Therefore, in such 
instances, we disregarded the below-cost sales.
    In this investigation, we found that, for certain products, more 
than 20 percent of Usinor'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 where such sales existed, in 
accordance with section 773(b)(1) of the Act.

[[Page 41202]]

D. Calculation of CV

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of Usinor's cost of materials, fabrication, SG&A, 
interest, U.S. packing costs, and profit. We made similar adjustments 
as those described above for COP. In accordance with section 
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

    We calculated NV based on delivered prices to unaffiliated 
customers or prices to affiliated customers that we determined to be at 
arm's-length prices. We made adjustments to the starting price, where 
appropriate, for billing adjustments. We made deductions, where 
appropriate, from the starting price for early payment discounts, other 
discounts, rebates, and inland freight. We made circumstance of sale 
(COS) adjustments, in accordance with section 773(a)(6)(c)(iii) of the 
Act, for direct selling expenses, including warranty expenses, credit 
expenses, and other direct selling expenses. In addition, we made 
adjustments for differences in the merchandise in accordance with 
section 773(a)(6)(C)(ii) of the Act. Finally, we deducted home market 
packing costs and added U.S. packing costs in accordance with sections 
773(a)(6)(A) and (B) of the Act.

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 
CEP, we deducted from CV the weighted-average home market direct 
selling expenses and added U.S. selling expenses.

Currency Conversion

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

Verification

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

Suspension of Liquidation

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

------------------------------------------------------------------------
                                                             Weighted-
                  Exporter/manufacturer                   average margin
                                                            percentage
------------------------------------------------------------------------
Usinor..................................................           29.88
All Others..............................................           29.88
------------------------------------------------------------------------

ITC Notification

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

Public Comment

    Case briefs or other written comments in at least ten copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than August 25, 1999, and rebuttal briefs no later than September 
1, 1999. A list of authorities used and an executive summary of issues 
should accompany any briefs submitted to the Department. Such summary 
should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, the hearing 
will be held on September 7, 1999, time and room to be determined, at 
the U.S. Department of Commerce, 14th Street and Constitution Avenue, 
NW, Washington, DC 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) the party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs. If 
this investigation proceeds normally, we will make our final 
determination by no later than 75 days after the date of this 
preliminary determination.
    This determination is issued and published pursuant to sections 
733(d) and 777(i)(1) of the Act.

    Dated: July 19, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-19300 Filed 7-28-99; 8:45 am]
BILLING CODE 3510-DS-P