[Federal Register Volume 64, Number 173 (Wednesday, September 8, 1999)]
[Notices]
[Pages 48775-48778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23321]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-421-804]


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

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

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

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SUMMARY: In response to requests from the petitioners and respondent, 
the Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on cold-rolled 
carbon steel flat products from the Netherlands. The review covers one 
manufacturer/exporter of the subject merchandise to the United States 
during the period August 1, 1997 through July 31, 1998.
    We preliminarily determine that a de minimis dumping margin exists 
for this period of review. If these preliminary results are adopted in 
our final results of review, we will instruct the U.S. Customs Service 
to assess antidumping duties on entries of Hoogovens merchandise during 
the period of review, in accordance with the Department's regulations 
(19 CFR 353.6).
    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument (1) a statement of the issue and (2) a 
brief summary of the argument (no longer than five pages, including 
footnotes).

EFFECTIVE DATE: September 8, 1999.

FOR FURTHER INFORMATION CONTACT: Ilissa A. Kabak or Robert M. James, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone (202) 482-1395 or 482-5222, 
respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Tariff Act), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Tariff Act by the Uruguay Round Agreements Act of 1994 (URAA). In 
addition, unless otherwise indicated, all references to the 
Department's regulations are to 19 CFR Part 351 (1998).

SUPPLEMENTARY INFORMATION:

Background

    The Department of Commerce published an antidumping duty order on 
cold-rolled carbon steel flat products from the Netherlands on August 
19, 1993 (58 FR 44172). The Department published a notice of 
``Opportunity To Request Administrative Review'' of the antidumping 
duty order for the 1997/1998 review period on August 11, 1998 (63 FR 
42821). On August 31, 1998, both the respondent, Hoogovens Staal BV 
(Hoogovens), and petitioners (Bethlehem Steel Corporation, U.S. Steel 
Company (a Unit of USX Corporation), Ispat/Inland Steel, Inc., LTV 
Steel Company, and National Steel Corporation) filed requests for 
review. We published a notice of initiation of the review on September 
29, 1998 (63 FR 51893).
    Due to the complexity of the issues involved in this case, the 
Department extended the time limit for completion of the preliminary 
results until August 31, 1999, in accordance with section 751(a)(3)(A) 
of the Tariff Act. The deadline for the final results of this review 
will continue to be 120 days after the date of publication of this 
notice. The Department is conducting this review in accordance with 
section 751 of the Tariff Act.

Scope of the Review

    The products covered by this review include cold-rolled (cold-
reduced) carbon steel flat-rolled products, of rectangular shape, 
neither clad, plated nor coated with metal, whether or not painted, 
varnished or coated with plastics or other nonmetallic substances, in 
coils (whether or not in successively superimposed layers) and of a 
width of 0.5 inch or greater, or in straight lengths which, if of a 
thickness less than 4.75 millimeters, are of a width of 0.5 inch or 
greater and which measures at least 10 times the thickness or if of a 
thickness of 4.75 millimeters or more are of a width which exceeds 150 
millimeters and measures at least twice the thickness, as currently 
classifiable in the Harmonized Tariff Schedule (HTS) under item numbers 
7209.15.0000, 7209.16.0030, 7209.16.0060, 7209.16.0090, 7209.17.0030, 
7209.17.0060, 7209.17.0090, 7209.18.1530, 7209.18.1560, 7209.18.2550, 
7209.18.6000, 7209.25.0000, 7209.26.0000, 7209.27.0000, 7209.28.0000, 
7209.90.0000, 7210.70.3000, 7210.90.9000, 7211.23.1500, 7211.23.2000, 
7211.23.3000,

[[Page 48776]]

7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030, 
7211.29.2090, 7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 
7212.40.1000, 7212.40.5000, 7212.50.0000, 7215.50.0015, 7215.50.0060, 
7215.50.0090, 7215.90.5000, 7217.10.1000, 7217.10.2000, 7217.10.3000, 
7217.10.7000, 7217.90.1000, 7217.90.5030, 7217.90.5060, and 
7217.90.5090. Included in this review are flat-rolled products of 
nonrectangular cross-section where such cross-section is achieved 
subsequent to the rolling process (i.e., products which have been 
``worked after rolling'')--for example, products which have been 
beveled or rounded at the edges. Excluded from this review is certain 
shadow mask steel, i.e., aluminum-killed, cold-rolled steel coil that 
is open-coil annealed, has a carbon content of less than 0.002 percent, 
is of 0.003 to 0.012 inch in thickness, 15 to 30 inches in width, and 
has an ultra flat, isotropic surface. These HTS item numbers are 
provided for convenience and Customs purposes. The written description 
of the scope of this order remains dispositive.

Verification

    As provided in section 782(i)(3) of the Tariff Act, we verified 
information provided by Hoogovens at its headquarters in Beverwijk and 
IJmuiden, the Netherlands, using standard verification procedures, 
including inspection of the manufacturing facilities, examination of 
relevant sales and financial records, and selection of original 
documentation containing relevant information. We also verified 
information provided by Hoogovens Steel USA, Inc. at its office in 
Scarsdale, New York.

Export Price (EP)

    Sales made by Hoogoven's selling office in the Netherlands directly 
to unaffiliated customers in the United States were treated as EP 
sales. We calculated EP based on the delivered, duty-paid price to 
unaffiliated customers in the United States. We made adjustments for 
discounts and post-sale price adjustments. We also made deductions, 
where applicable, for foreign inland freight, ocean freight and marine 
insurance, brokerage and handling, U.S. inland freight, and U.S. 
customs duties in accordance with section 772(c) of the Tariff Act. See 
Preliminary Analysis Memorandum (Analysis Memo), August 31, 1999, at 8.

Constructed Export Price (CEP)

    Sales made by Hoogoven's selling office in the Netherlands through 
the affiliated Rafferty-Brown companies, located in the United States, 
to unaffiliated U.S. customers were treated as CEP sales. We based CEP 
on the delivered price to unaffiliated customers in the United States. 
We made deductions for foreign inland freight, ocean freight and marine 
insurance, brokerage and handling, U.S. inland freight, and U.S. 
customs duties, in accordance with section 772(c) of the Tariff Act. 
Furthermore, in accordance with section 772(d)(1) of the Tariff Act, we 
deducted selling expenses associated with economic activities occurring 
in the United States, including credit expenses, indirect selling 
expenses, and inventory carrying costs. In accordance with section 
772(d)(2) of the Tariff Act, for sales made through the affiliated 
Rafferty-Brown companies, we also deducted the cost of further 
manufacturing, including repacking expenses. Finally, we made an 
adjustment for an amount of profit allocated to these expenses in 
accordance with section 772(d)(3) of the Tariff Act. See Analysis Memo 
at 10.
    In the absence of cost of production (COP) data for home market 
sales,1 we estimated COP for calculation of the CEP profit 
allocation as follows:
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    \1\ Hoogovens reported CV data, which provide the cost of 
manufacturing the products sold in the United States. As the product 
mix is very different in the home market, the CV data are not 
representative of total costs.
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    1. We estimated the home market fixed costs by calculating the 
weighted average ratio of fixed costs to variable costs for U.S. sales 
(using the reported VCOMU and TCOMU variables) and multiplying the 
reported home market variable costs (VCOMH) by this ratio;
    2. We obtained the total cost of manufacturing (COM) by adding the 
reported total variable costs and the estimated fixed costs;
    3. We obtained general and administrative expenses and interest 
expenses from the constructed value (CV) data base and added them to 
the total COM to obtain COP.

Normal Value (NV)

    In order to determine whether sales of the foreign like product in 
the home market are a viable basis for calculating NV, we compared the 
volume of home market sales of the foreign like product to the volume 
of subject merchandise sold in the United States, in accordance with 
section 773(a)(1)(C) of the Tariff Act. Hoogovens'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 of the subject 
merchandise. Therefore, we have based NV on home market sales.
    Hoogovens made sales to both affiliated and unaffiliated customers 
in the home market during the period of review. We included sales to 
affiliated customers when we determined those sales to be at arm's 
length (i.e., at weighted-average prices that were 99.5 percent or more 
of weighted average prices for identical products sold to unaffiliated 
customers in the home market). When the weighted-average price to an 
affiliated customer was less than 99.5 percent of the weighted-average 
price to unaffiliated customers, or there were no sales of identical 
merchandise to unaffiliated customers for purposes of the arm's-length 
test, we excluded sales to that affiliated customer from our 
calculation of NV. See Antidumping Duties; Countervailing Duties, Final 
Rule 62 FR 27296, 27355 (May 19, 1997).
    Home market prices were based on the packed, ex-factory or 
delivered prices to customers, net of early payment discounts and 
rebates. We made deductions from NV for inland freight, pursuant to 
section 773(a)(6)(B) of the Tariff Act. In accordance with section 
773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410(c), we made 
circumstance-of-sale (COS) adjustments for credit and, where 
appropriate, warranty expenses.
    We deducted home market packing costs and added U.S. packing costs, 
in accordance with section 773(a)(6) of the Tariff Act. Where 
appropriate, we made adjustments to NV to account for differences in 
the physical characteristics of the merchandise, in accordance with 
section 773(a)(6)(C)(ii) of the Tariff Act and 19 CFR 351.411.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Tariff Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same level of trade (LOT) as the EP or CEP transaction. 
The NV LOT is that of the starting-price sales in the comparison market 
or, when NV is based on CV, that of the sales from which we derive 
selling, general and administrative expenses and profit. For EP, the 
U.S. LOT is also the level of the starting-price sale, which is 
normally the sale from exporter to importer. In this case the exporter 
sells directly to unaffiliated customers. For CEP, the U.S. 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

[[Page 48777]]

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 an LOT adjustment under section 773(a)(7)(A) of the Tariff 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 Tariff 
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).
    To examine LOT in this review, we requested information concerning 
the selling functions associated with sales to service centers and to 
several categories of end-users in each of Hoogovens's markets and 
interviewed sales and technical service managers. In both the home and 
U.S. markets larger customers received more frequent visits from sales 
personnel. In the home market a higher level of technical service was 
provided to automotive customers than to other end-users. However, 
Hoogovens stated that ``it cannot differentiate among the selling 
functions performed and services offered to different classes of home 
market or export price customers.'' Hoogovens's October 21, 1998 
section A questionnaire response (Section A response) at 14. Hoogovens 
further noted that the higher level of service provided to large end-
users, such as auto makers, was related to the higher volumes of 
merchandise purchased by these customers, and not any specific features 
of this market sector. Id. at 26. Therefore, based upon the information 
on the record we preliminarily determine that there are no significant 
differences between the selling functions performed and services 
offered to service centers and end-user customers in the home market. 
We also preliminarily determine that there are no differences between 
the selling functions performed and services offered to service centers 
and end-user customers in the U.S. market. Lastly, evidence on the 
record indicates that Hoogovens has not changed its selling functions 
since the fourth (1996-1997) administrative review (see ``Home Market 
Sales Verification Report,'' at 8 (July 8, 1999); see also Certain 
Cold-rolled Carbon Steel Flat Products from the Netherlands: Final 
Results of Antidumping Duty Administrative Review, 64 FR 11825, (March 
10, 1999)).
    As for CEP sales, Hoogovens claims it has no home market sales at a 
LOT equivalent to the CEP LOT, alleging, ``while the CEP sales have 
been adjusted to create, in effect, an ex-factory level of trade, the 
starting price of the home market sales reflects many selling 
activities not reflected in the adjusted CEP price. These include 
indirect selling activities, indirect warranty and technical service 
expenses, and inventory carrying costs incurred on home market sales.'' 
See Section A response (October 21, 1998), at 45 and 46.
    We disagree with Hoogovens's claim that the prices used to 
determine NV reflect many selling activities not reflected in CEP. In 
accordance with section 772(d)(1) the Department calculated CEP by 
deducting the imputed credit expenses incurred by the Rafferty-Brown 
companies as direct selling expenses. The Department also deducted 
indirect selling expenses (ISE), including imputed inventory carrying 
costs (ICC) incurred in the United States by the Rafferty-Brown 
companies for sales to the first unaffiliated buyers. The Department 
did not deduct from CEP those ISE incurred in the Netherlands 
pertaining to U.S. sales (reported in computer data fields DINDIRSU and 
DINVCARU), nor certain expenses of the U.S. sales office, on the 
grounds that these expenses were associated with the sale to 
Hoogovens's U.S. affiliates rather than with the sales by the 
affiliates to the first unaffiliated buyers. Thus, the CEP includes 
Hoogovens's warranty and technical service expenses for U.S. sales, as 
well as ISE, including the expenses of the sales offices in IJmuiden 
and New York, incurred in connection with the sales to the affiliated 
service centers.
    For the purposes of the LOT analysis, we found no distinguishable 
difference between the selling functions included in the home market 
starting price and the selling functions included in the CEP; 
Hoogovens's starting price for home market sales includes the provision 
of services reflected in the direct warranty and technical service 
expenses, ICC, the expenses of the sales office in IJmuiden, and other 
indirect selling expenses incurred for home market sales. On the basis 
of this analysis, the Department has preliminarily determined that the 
record does not support Hoogovens's claim that home market sales are at 
a different, more advanced LOT than the adjusted CEP sales.

Sales Comparisons

    To determine whether sales of cold-rolled carbon steel flat 
products in the United States were made at prices below normal value, 
we compared EP or CEP to NV, as described in the ``Export Price,'' 
``Constructed Export Price'' and ``Normal Value'' sections of this 
notice. In accordance with section 777(A) of the Tariff Act, we 
calculated monthly weighted-average prices for NV and compared these to 
individual U.S. transactions. For comparisons to EP, we made COS 
adjustments by deducting direct selling expenses incurred on home 
market sales and adding U.S. direct selling expenses. For comparisons 
to CEP, we made deductions for direct selling expenses incurred on home 
market sales. There were no comparisons to CV for these preliminary 
results.

Reimbursement

    Section 351.402(f) of the antidumping regulations requires the 
Department to deduct from EP or CEP the amount of any antidumping duty 
that is reimbursed to the importer. Based on verified evidence on the 
record in this review, including the revised agency agreement between 
Hoogovens and Hoogovens Steel USA, Inc. (HSUSA) and the refund to 
Hoogovens by HSUSA of a portion of the cash deposits advanced to HSUSA 
for merchandise entered during the second and fourth administrative 
reviews, the Department has preliminarily determined that HSUSA is 
solely responsible for the payment of antidumping duties. Further, 
evidence on the record in this review shows that HSUSA has sufficient 
assets to establish its ability to pay the antidumping duties to be 
assessed (see ``United States Verification Report,'' at 3 (July 8, 
1999)). Therefore, for this period of review we have determined that 
Hoogovens has not reimbursed HSUSA for antidumping duties to be 
assessed.

Preliminary Results of Review

    We preliminarily determine that the following margin exists for the 
period August 1, 1997 through July 31, 1998:

------------------------------------------------------------------------
                                                                Margin
                          Company                             (percent)
------------------------------------------------------------------------
Hoogovens Staal BV.........................................         0.25
------------------------------------------------------------------------

    Parties to this proceeding may request disclosure within five days 
of publication of this notice and any interested party may request a 
hearing within 30 days of publication. Any

[[Page 48778]]

hearing, if requested, will be held 44 days after the date of 
publication, or the first working day thereafter. Interested parties 
may submit case briefs and/or written comments no later than 30 days 
after the date of publication. Rebuttal briefs and rebuttals to written 
comments, limited to issues raised in such briefs or comments, may be 
filed no later than 37 days after the date of publication. The 
Department will publish the final results of this administrative 
review, which will include the results of its analysis of issues raised 
in any such written comments or at a hearing, within 120 days after the 
publication of this notice.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between United States price and NV may vary from the percentage given 
above. The Department will issue appraisement instructions directly to 
Customs. The final results of this review shall be the basis for the 
assessment of antidumping duties on entries of merchandise covered by 
this review and for future deposits of estimated duties. For assessment 
purposes we intend to calculate importer-specific assessment rates for 
cut-to-length carbon steel plate. For both EP and CEP sales we will 
divide the total dumping duties for each importer (calculated as the 
difference between NV and EP or CEP) by the entered value of the 
merchandise. Upon completion of this review we will direct Customs to 
assess the resulting ad valorem rates against the entered value of each 
entry of subject merchandise by each importer during the POR.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of cold-rolled carbon steel flat products from the 
Netherlands entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results of this administrative 
review, as provided by section 751(a)(1) of the Tariff Act: (1) The 
cash deposit rate for the reviewed firm will be the rate established in 
the final results of administrative review, except if the rate is less 
than 0.5 percent, and therefore, de minimis within the meaning of 19 
CFR 351.106(c), in which case the cash deposit rate will be zero; (2) 
if the exporter is not a firm covered in this review or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the manufacturer of the merchandise in the final 
results of this review; and (3) if neither the exporter nor the 
manufacturer is a firm covered in this or any previous review or the 
original fair value investigation, the cash deposit rate will be 19.32 
percent.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during these review periods. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: August 31, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23321 Filed 9-7-99; 8:45 am]
BILLING CODE 3510-DS-P