[Federal Register Volume 66, Number 149 (Thursday, August 2, 2001)]
[Notices]
[Pages 40192-40197]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19346]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-412-822]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Stainless Steel Bar From 
the United Kingdom

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

ACTION: Notice of preliminary determination of sales at less than fair 
value.

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SUMMARY: We preliminarily determine that stainless steel bar from the 
United Kingdom is being, or is likely to be, sold in the United States 
at less than fair value, as provided in section 733(b) of the Tariff 
Act of 1930, as amended.
    Interested parties are invited to comment on this preliminary 
determination. Since we are postponing the final determination, we will 
make our final determination not later than 135 days after the date of 
publication of this preliminary determination in the Federal Register.

EFFECTIVE DATE: August 2, 2001.

FOR FURTHER INFORMATION CONTACT: Kate Johnson or Rebecca Trainor, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-4929 or (202) 482-4007, 
respectively.

SUPPLEMENTARY INFORMATION:

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 of Commerce 
(``Department's'') regulations are to the regulations at 19 CFR Part 
351 (April 2000).

Background

    Since the initiation of this investigation (Notice of Initiation of 
Antidumping Investigations: Stainless Steel Bar from France, Germany, 
Italy, Korea, Taiwan and the United Kingdom, 66 FR 7620 (January 24, 
2001) (Initiation Notice), as amended by Corrections, Notice of 
Initiation of Antidumping Investigations: Stainless Steel Bar from 
France, Germany, Italy, Korea, Taiwan and the United Kingdom, 66 FR 
14986 (March 14, 2001), the following events have occurred:
    On January 26, 2001, we solicited comments from interested parties 
regarding the criteria to be used for model-matching purposes and we 
received comments on our proposed matching criteria on February 8, 
2001.
    On February 12, 2001, the United States International Trade 
Commission (``ITC'') preliminarily determined that there is a 
reasonable indication that imports of stainless steel bar (``SSB'') 
from the United Kingdom are materially injuring the United States 
industry (see ITC Investigation No. 701-TA-913-918 (Publication No. 
3395)).
    Also on February 12, 2001, we selected the three largest producers/
exporters of SSB from the United Kingdom as the mandatory respondents 
in this proceeding. For further discussion, see Memorandum from The 
Team to Richard W. Moreland, Deputy Assistant Secretary for Import 
Administration, entitled ``Respondent Selection,'' dated February 12, 
2001. We subsequently issued the antidumping questionnaires to Corus 
Engineering Steels Ltd. (``Corus''), Crownridge Stainless Steel Limited 
(``Crownridge''), and Firth Rixson Special Steels, Ltd. (``FRSS'') on 
February 20, 2001.
    On February 13, 2001, Corus requested that certain special-quality 
oil field equipment steel grades be excluded from the scope of this 
investigation. See ``Scope of Investigation'' section of this notice 
for further discussion.
    In February and March 2001, the petitioners \1\ made submissions 
requesting that the Department require the respondents to report the 
actual content of the primary chemical components of SSB for each sale 
of SSB made during the period of investigation (``POI''). Also, in 
February and March 2001, the respondents in this and other concurrent 
SSB investigations requested that the Department deny the petitioners' 
request. The Department, upon consideration of the comments from all 
parties on this matter, issued a memorandum on April 3, 2001, 
indicating its decision not to require the respondents to report such 
information on a transaction-specific basis. However, the Department 
did require that respondents report certain additional information 
concerning SSB grades sold to the U.S. and home markets during the POI. 
(For details, see

[[Page 40193]]

Memorandum from The Stainless Steel Bar Teams to Louis Apple and Susan 
Kuhbach, Office Directors, dated April 3, 2001).
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    \1\ Carpenter Technology Corp., Crucible Specialty Metals, 
Electralloy Corp., Empire Specialty Steel Inc., Slater Steels Corp., 
and the United Steelworkers of America.
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    During the period March through June 2001, the Department received 
responses to Sections A, B, C and D of its original and supplemental 
questionnaires from Corus and FRSS.
    On April 27, 2001, pursuant to 19 CFR 351.205(e), the petitioners 
made a timely request to postpone the preliminary determination. We 
granted this request on May 7, 2001, and postponed the preliminary 
determination until no later than July 26, 2001. (See Notice of 
Postponement of Preliminary Determinations of Sales at Less Than Fair 
Value: Stainless Steel Bar from France, Germany, Italy, Korea, Taiwan 
and the United Kingdom, 66 FR 24114 (May 11, 2001).
    On July 10 and 11, 2001, the petitioners provided comments on the 
questionnaire responses of FRSS and Corus, respectively, for the 
Department's consideration in the preliminary determination. Corus and 
FRSS responded to these comments on July 16 and 17, 2001, respectively.

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on June 8, 2001, and July 
16, 2001, Corus and FRSS, respectively, requested that, in the event of 
an affirmative preliminary determination in this investigation, the 
Department postpone its final determination until not later than 135 
days after the date of the publication of the preliminary determination 
in the Federal Register, and extend the provisional measures to not 
more than six months. In accordance with 19 CFR 351.210(b), because (1) 
our preliminary determination is affirmative, (2) Corus and FRSS 
account for a significant proportion of exports of the subject 
merchandise, and (3) no compelling reasons for denial exist, we are 
granting the respondent's request and are postponing the final 
determination until no later than 135 days after the publication of 
this notice in the Federal Register. Suspension of liquidation will be 
extended accordingly.

Scope of Investigation

    For purposes of this investigation, the term ``stainless steel 
bar'' includes articles of stainless steel in straight lengths that 
have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or 
otherwise cold-finished, or ground, having a uniform solid cross 
section along their whole length in the shape of circles, segments of 
circles, ovals, rectangles (including squares), triangles, hexagons, 
octagons, or other convex polygons. Stainless steel bar includes cold-
finished stainless steel bars that are turned or ground in straight 
lengths, whether produced from hot-rolled bar or from straightened and 
cut rod or wire, and reinforcing bars that have indentations, ribs, 
grooves, or other deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), products that have been cut from stainless 
steel sheet, strip or plate, wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The stainless steel bar subject to this investigation is currently 
classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 
7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 
7222.20.00.75, and 7222.30.00.00 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.
    In accordance with our regulations, we set aside a period of time 
for parties to raise issues regarding product coverage and encouraged 
all parties to submit comments within 20 calendar days of publication 
of the Initiation Notice (see 66 FR 7620-7621). The respondents in this 
and the companion SSB investigations filed comments seeking to exclude 
certain products from the scope of these investigations. The specific 
products identified in their exclusion requests are:
     Stainless steel tool steel
     Welding wire
     Special-quality oil field equipment steel (SQOFES)
     Special profile wire
    We have addressed these requests in a Memorandum to Susan Kuhbach 
and Louis Apple from The Stainless Steel Bar Team, dated July 26, 2001, 
entitled ``Scope Exclusion Requests,'' and a Memorandum to Louis Apple 
from The Stainless Steel Bar Team, dated July 26, 2001, entitled 
``Whether Special Profile Wire Product is Included in the Scope of the 
Investigation.'' Our conclusions are summarized below.
    Regarding stainless steel tool steel, welding wire, and SQOFES, 
after considering the respondents' comments and the petitioners' 
objections to the exclusion requests, we preliminarily determine that 
the scope is not overly broad. Therefore, stainless steel tool steel, 
welding wire, and SQOFES are within the scope of these SSB 
investigations. In addition, we preliminarily determine that SQOFES 
does not constitute a class or kind of merchandise separate from SSB.
    Regarding special profile wire, we have preliminarily determined 
that this product does not fall within the scope as it is written 
because its cross section is in the shape of a concave polygon. 
Therefore, we have not included special profile wire in these 
investigations.
    Finally, we note that in the concurrent countervailing duty 
investigation of stainless steel bar from Italy, the Department 
preliminarily determined that hot-rolled stainless steel bar is within 
the scope of these investigations. (See, Preliminary Affirmative 
Countervailing Duty Determination and Alignment of Final Countervailing 
Duty Determination with Final Antidumping Duty Determination: Stainless 
Steel Bar from Italy, 66 FR 30414 (June 6, 2001)).

Period of Investigation

    The POI is October 1, 1999, through September 30, 2000.

Use of Facts Available

Crownridge

    On February 20, 2001, we sent an antidumping questionnaire to 
Crownridge, however, Crownridge did not respond. Prior to this date, on 
February 8, 2001, the U.S. Embassy in London informed us that 
Crownridge was no longer in business, and had been liquidated on 
February 6, 2001. That Crownridge was no longer in business was 
subsequently confirmed by counsel to Crownridge, as well as by 
representatives of the U.S. Embassy in London and our own research. 
Nevertheless, on June 15, 2001, we made a final attempt to contact the 
company, but were unsuccessful.

FRSS

    FRSS responded to the Department's questionnaires, but failed to 
provide sufficient sales and cost information on which to base a 
preliminary antidumping duty margin, despite numerous opportunities to 
do so. FRSS's initial sections A-C questionnaire responses of March 23,

[[Page 40194]]

2001, and April 13, 2001, were deficient and/or unresponsive to many of 
the questions asked in the questionnaire. On May 21, 2001, we sent the 
respondent an extensive supplemental questionnaire on sections A-C, to 
which we received an inadequate response on June 11, 2001. At our 
request, on June 14, 2001, we met with counsel to FRSS to discuss the 
significant omissions and deficiencies of the questionnaire responses, 
and to alert counsel to the fact that the initial section D (cost of 
production) response was also largely inadequate, and lacked the 
elementary detail and narrative explanations necessary for cost 
calculation purposes. We allowed the company an additional opportunity 
to provide the missing sales and cost information discussed at the 
meeting. (For further details of this meeting, see Memorandum to the 
File from Brian Ledgerwood, dated June 18, 2001). On June 15, 2001, we 
issued a supplemental questionnaire for section D. Although FRSS's 
responses on June 22 and 29, 2001, to these last information requests 
were partially responsive, they still lacked the basic product, sales 
expense, and cost of production information necessary to perform the 
antidumping margin analysis.

Analysis

    For the forgoing reasons, we determine that it is appropriate to 
apply antidumping margins based on the facts otherwise available to 
Crownridge and FRSS in accordance with section 776(a)(2)(A) and (B) of 
the Act, respectively. For further details regarding this 
determination, see the Memorandum to Richard W. Moreland from Louis 
Apple entitled ``Preliminary Determination of Stainless Steel Bar (SSB) 
from the United Kingdom: Use of Facts Available,'' dated July 26, 2001 
(Facts Available Memorandum).
    Section 776(a)(2) of the Act provides that, if an interested party 
(1) withholds information that has been requested by the Department, 
(2) fails to provide such information in a timely manner or in the form 
or manner requested, (3) significantly impedes a determination under 
the antidumping statute, or (4) provides such information but the 
information cannot be verified, the Department shall, subject to 
subsections 782(c)(1) and (e) of the Act, use facts otherwise available 
in reaching the applicable determination.
    Section 776(b) of the Act provides that adverse inferences may be 
used when a party has failed to cooperate by not acting to the best of 
its ability to comply with requests for information. See also Statement 
of Administrative Action accompanying the URAA, H.R. Rep. No. 103-316, 
vol. 1, at 870 (1994) (SAA). While Crownridge failed to respond to the 
Department's questionnaire, we are satisfied that because of the 
special circumstances surrounding Crownridge, it was unable to provide 
a response. Therefore, the Department has determined that no adverse 
inference is warranted. Consequently, as non-adverse facts available, 
we have assigned Crownridge the all-others rate in this preliminary 
determination.
    As explained above, FRSS was provided several opportunities to 
respond fully to the Department's questionnaires. In spite of our 
efforts, that included meeting with counsel for FRSS specifically to 
delineate deficiencies in its questionnaire responses, FRSS's responses 
continue to contain major deficiencies and omissions of data which 
render them unusable for purposes of the preliminary determination. In 
particular, FRSS failed to identify an affiliated producer of SSB which 
produced and sold SSB during the POI until late in the investigation, 
and then failed to provide basic sales and cost data for its affiliate. 
For further discussion, see the Facts Available Memorandum. Therefore, 
we preliminarily find that FRSS failed to act to the best of its 
ability to provide the information requested. Accordingly, we believe 
it is appropriate to use an adverse inference in selecting the facts 
otherwise available on which to base the antidumping rate for FRSS.
    In accordance with our standard practice, we determine the margin 
used as adverse facts available by selecting the higher of (1) the 
highest margin stated in the notice of initiation, or (2) the highest 
margin calculated for any respondent. As adverse facts available 
(``AFA''), we have assigned to FRSS the highest margin in the petition. 
See, e.g., Notice of Preliminary Determinations of Sales at Less Than 
Fair Value: Certain Large Diameter Carbon and Alloy Seamless Standard, 
Line and Pressure Pipe From Japan and Certain Small Diameter Carbon and 
Alloy Seamless Standard, Line and Pressure Pipe From Japan and the 
Republic of South Africa, 64 FR 69718, 69722 (December 14, 1999); 
followed in Notice of Final Determinations of Sales at Less Than Fair 
Value: Certain Large Diameter Carbon and Alloy Seamless Standard, Line 
and Pressure Pipe From Japan and Certain Small Diameter Carbon and 
Alloy Seamless Standard, Line and Pressure Pipe From Japan and the 
Republic of South Africa, 65 FR 25907 (May 4, 2000); and Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Stainless 
Steel Wire Rod from Korea and Germany, 63 FR 10826, 10847 (March 5, 
1998); followed in Notice of Final Determination of Sales at Less Than 
Fair Value: Stainless Steel Wire Rod from Korea and Germany, 63 FR 
40433 (July 29, 1998).
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information (such as the petition) in using the facts 
otherwise available, it must, to the extent practicable, corroborate 
that information from independent sources that are reasonably at its 
disposal. In this case, when analyzing the petition for purposes of the 
initiation, we reviewed all of the data upon which the petitioners 
relied in calculating the estimated dumping margins, and determined 
that the margins in the petition were appropriately calculated and 
supported by adequate evidence in accordance with the statutory 
requirements for initiation. In order to corroborate the petition 
margins for purposes of using them as AFA, we re-examined the price and 
cost information provided in the petition in light of information 
developed during this investigation. (See the Facts Available 
Memorandum for further details of our corroboration methodology.)
    In accordance with section 776(c) of the Act, we were able to 
corroborate the information in the petition using information from 
independent sources that were reasonably at our disposal. As a result, 
we have preliminarily assigned FRSS the highest rate contained in the 
petition, 125.77 percent. Also, for the reasons stated above, we have 
preliminarily assigned to Crownridge, the ``all others'' rate as facts 
available in accordance with section 776(a) of the Act.

Fair Value Comparisons

    To determine whether Corus's sales of SSB from the United Kingdom 
to the United States were made at less than fair value (``LTFV''), 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 compared POI weighted-average CEPs to 
NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the respondent (i.e., Corus) in the home 
market during the POI that fit the description in the ``Scope of 
Investigation'' section of this

[[Page 40195]]

notice 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 respondent in the following order of importance: general type of 
finish; grade; remelting process; type of final finishing operation; 
shape; and size.
    With respect to grade, we matched products sold in the U.S. and 
home markets on the basis of the three most similar matches proposed by 
the respondent, where possible.
    On July 10 and 13, 2001, the petitioners submitted general comments 
on product-matching issues for the Department's consideration in the 
preliminary determination. These comments were not received in time to 
be fully analyzed for the preliminary determination, but will be 
considered for the final determination.
    With respect to home market sales of non-prime merchandise made by 
Corus during the POI, in accordance with our past practice, we excluded 
these sales from our preliminary analysis based on the limited quantity 
of such sales in the home market and the fact that no such sales were 
made to the United States during the POI. (See, e.g., Final 
Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat 
Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and 
Certain Cut-to-Length Carbon Steel Plate from Korea, 58 FR 37176, 37180 
(July 9, 1993)).

Constructed Export Price

    Corus reported all of its U.S. sales as CEP sales made to 
unaffiliated customers in the United States through its U.S. 
affiliates. We calculated CEP, in accordance with subsection 772(b) of 
the Act, for sales made to the first unaffiliated purchaser that took 
place after importation into the United States by a seller affiliated 
with the producer or exporter.
    We based CEP on the packed ``delivered,'' ``customer pick-up at 
U.S. port,'' or ``customer pick-up at warehouse'' prices to 
unaffiliated purchasers in the United States. We made adjustments to 
the starting price (i.e., gross unit price inclusive of alloy 
surcharges, as applicable), where appropriate, for price-billing errors 
(i.e., invoice adjustments) and freight revenue. 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, U.S. customs duties (including 
harbor maintenance fees and merchandise processing fees), U.S. inland 
insurance, U.S. inland freight expenses (freight from port to warehouse 
and freight from warehouse to the customer), and U.S. handling charges. 
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 and 
warranty expenses), inventory carrying costs, and indirect selling 
expenses. We made an adjustment for profit in accordance with section 
772(d)(3) of the Act.

Normal Value

A. 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., 
whether 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 respondent's home market was viable.

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

    The Department's standard practice with respect to the use of home 
market sales to affiliated parties for NV is to determine whether such 
sales are at arm's-length prices. Therefore, in accordance with that 
practice, we performed an arm's-length test on Corus's sales to 
affiliates as follows.
    Sales to affiliated customers in the home market not made at arm's-
length prices were excluded from our analysis because we considered 
them to be outside the ordinary course of trade. See 19 CFR 351.102(b). 
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, 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). In 
instances where no price ratio could be constructed for an affiliated 
customer because identical merchandise was not sold to unaffiliated 
customers, we were unable to determine that these sales were made at 
arm's-length prices and, therefore, excluded them from our LTFV 
analysis. See Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Carbon Steel Flat Products from Argentina, 58 FR 
37062, 37077 (July 9, 1993). Where the exclusion of such sales 
eliminated all sales of the most appropriate comparison product, we 
made a comparison to the next most similar model.

C. Cost of Production Analysis

    Based on our analysis of an allegation contained in the petition, 
we found that there were reasonable grounds to believe or suspect that 
sales of SSB in the home market were made at prices below their cost of 
production (``COP''). Accordingly, pursuant to section 773(b) of the 
Act, we initiated a country-wide sales-below-cost investigation to 
determine whether sales were made at prices below their respective COP 
(see Initiation Notice, 66 FR at 7625).
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus an amount for general and administrative 
expenses (``G&A''), interest expenses, and home market packing costs 
(see ``Test of Home Market Sales Prices'' section below for treatment 
of home market selling expenses). We relied on the COP data submitted 
by Corus.
2. Test of Home Market Sales Prices
    On a product-specific basis, we compared the weighted-average COP 
to the home market sales of the foreign like product, as required under 
section 773(b) of the Act, in order to determine whether the sale 
prices were below the COP. The prices were exclusive of any applicable 
movement charges, rebates, discounts, and direct and indirect

[[Page 40196]]

selling expenses. In determining whether to disregard home market sales 
made at prices less than their COP, we examined, in accordance with 
sections 773(b)(1)(A) and (B) of the Act, whether such sales were made 
(1) within an extended period of time, (2) in substantial quantities, 
and (3) at prices which did not permit the recovery of all costs within 
a reasonable period of time.
3. Results of the COP Test
    Pursuant to section 773(b)(1), where less than 20 percent of the 
respondent's sales of a given product are at prices less than the COP, 
we do not disregard any below-cost sales of that product, because we 
determine that in such instances the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product are at prices less than the COP, we disregard 
those sales of that product, because we determine that in such 
instances the below-cost sales represent ``substantial quantities'' 
within an extended period of time, in accordance with section 
773(b)(1)(A) of the Act. In such cases, we also determine whether such 
sales were made at prices which would not permit recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(1)(B) of the Act.
    We found that, for certain specific products, more than 20 percent 
of Corus's home market sales were at prices less than the COP and, in 
addition, such sales were made within a reasonable period of time and 
did not provide for the recovery of costs. We therefore excluded these 
sales and used the remaining above-cost sales, if any, as the basis for 
determining NV, in accordance with section 773(b)(1).

D. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP or CEP. Sales are made at 
different LOTs if they are made at different marketing stages (or their 
equivalent). 19 CFR 351.412(c)(2). Substantial differences in selling 
activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. Id.; 
see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997). In order to determine whether the 
comparison sales were at different stages in the marketing process than 
the U.S. sales, we reviewed the distribution system in each market 
(i.e., the ``chain of distribution''),\2\ including selling 
functions,\3\ class of customer (``customer category''), and the level 
of selling expenses for each type of sale.
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    \2\ The marketing process in the United Sates and comparison 
markets begins with the producer and extends to the sale to the 
final user or consumer. The chain of distribution between the two 
may have many or few links, and the respondents' sales occur 
somewhere along this chain. In performing this evaluation, we 
considered the narrative responses of each respondent to properly 
determine where in the chain of distribution the sale occurs.
    \3\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of this preliminary determination, 
we have organized the common SSB selling functions into four major 
categories: sales process and marketing support, freight and 
delivery, inventory and warehousing, and quality assurance/warranty 
services. Other selling functions unique to specific companies were 
considered, as appropriate.
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    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales (i.e., NV based on 
either home market or third country prices \4\), we consider the 
starting prices before any adjustments. For CEP sales, we consider only 
the selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 
2001).
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    \4\ Where NV is based on constructed value (``CV''), we 
determine the NV LOT based on the LOT of the sales from which we 
derive selling expenses, G&A and profit for CV, where possible.
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    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the EP 
or CEP, the Department may compare the U.S. sale to sales at a 
different LOT in the comparison market. In comparing EP or CEP sales at 
a different LOT in the comparison market, where available data make it 
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the 
Act. Finally, for CEP sales only, if a NV LOT is more remote from the 
factory than the CEP LOT and we are unable to make a LOT adjustment, 
the Department shall grant a CEP offset, as provided in section 
773(a)(7)(B) of the Act. 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).
    In this case, Corus had only CEP sales. It reported that 
comparison-market and CEP sales were made at different LOTs, and that 
comparison-market sales were made at a more advanced LOT than were 
sales to its U.S. affiliates, Corus America Inc. (``CAI'') and Avesta 
Sheffield Bar Company (``ASB''). Corus requested that the Department 
make a CEP offset in lieu of a LOT adjustment, as it was unable to 
quantify the price differences related to sales made at the different 
LOTs.
    Corus reported home market sales through one channel of 
distribution: sales of subject merchandise from the mill directly to 
affiliated and unaffiliated customers. Corus offers the same support 
and assistance to all its home market customers, including assistance 
in order specification, delivery, and after-sale technical support. 
Accordingly, all of Corus's home market sales are made in the same 
channel of distribution and constitute one LOT.
    In the U.S. market, Corus reported two channels of distribution 
(i.e., through its U.S. affiliate CAI, who sells ``back-to-back'' to 
unaffiliated U.S. customers and maintains no inventory; and through 
another affiliated company, ASB, which imports and inventories subject 
merchandise and makes its sales from its warehouse facilities). Corus 
offers the same support for its sales to CAI and ASB, accepting 
purchase orders and sending order confirmations as well arranging for 
production and reviewing and approving quality claims. Based on our 
overall analysis, we found that the channels of distribution did not 
differ from each other with respect to selling activities and, 
therefore, constituted one LOT.
    We compared the CEP LOT to the home market LOT and concluded that 
the selling functions performed for the home market customers are 
sufficiently similar to those performed for the U.S. customers to 
warrant considering them the same LOT. For both LOTs there is a high 
degree of selling activity related to quality assurance and warranty 
services, while there is a low (or non-existent) level of selling 
activity associated with maintaining a warehouse and inventory. Both 
LOTs also have similar levels of selling activity with regard to most 
freight and delivery services.
    More specifically, the table submitted as Exhibit B-16 of the June 
22, 2001, response (selling functions table) indicates that the degree 
of sales activity that Corus claimed it provided for its sales in the 
home market and for its U.S. sales is the same for the vast majority of 
selling functions identified.
    However, for the remaining selling functions for which Corus 
claimed a different degree of sales activity for its U.S. sales and its 
home market sales, the levels of activity reported by Corus in the 
selling functions table are inconsistent with the sales process 
descriptions in the questionnaire response. For example, the March 27, 
2001, response at pages A-16 and A-18

[[Page 40197]]

states that Corus sells to longstanding and ongoing customers in both 
markets. However, in the selling functions table, Corus reports a 
different degree of market research in each market. Furthermore, the 
selling functions table indicates a high degree of sales activity for 
identifying customers and making sales calls in the United Kingdom and 
a low degree of such activity for U.S. sales. Yet, in the sales process 
description in the response Corus states that its home market customers 
typically call or fax the Corus sales office with inquiries and then 
place orders by phone, fax, or mail. We are not persuaded by Corus's 
claim that it provides a high degree of sales activity with regard to 
identifying customers and making sales calls when the customers contact 
Corus by phone, fax, or mail. Moreover, for longstanding and ongoing 
customers a high degree of sales activity for identifying customers and 
making sales calls seems misplaced. In addition, in the selling 
functions table Corus attempts to distinguish the sales activity for 
its U.S. and home market sales with regard to the degree of service 
provided for performance of a customer credit check, indicating a high 
degree of activity for home market sales and a low degree for U.S. 
sales. This type of activity should be necessary when Corus sells to 
new and unfamiliar customers in the home market--not longstanding and 
ongoing customers.
    Inasmuch as we consider Corus's CEP sales to be at the same LOT as 
that of the home market sales, Corus does not qualify for a LOT 
adjustment or CEP offset pursuant to sections 773(a)(7)(A) or (B) of 
the Act, respectively.

E. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on delivered prices to unaffiliated 
customers or prices to affiliated customers that we determined to be at 
arm's-length (i.e., gross unit price inclusive of alloy surcharges, as 
applicable). We made adjustments, where appropriate, to the starting 
price for billing/invoice corrections. We made deductions, where 
applicable, for discounts, rebates, and inland freight. We made 
adjustments for differences in costs attributable to differences in the 
physical characteristics of the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. In addition, we made 
adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410 for differences in circumstances of sale for imputed credit 
expenses and warranties. We also added U.S. packing costs and deducted 
home market packing costs in accordance with sections 773(a)(6)(A) and 
(B) of the Act, respectively.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(2) 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 export price or constructed export 
price, as indicated in the chart below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
Corus Engineering Steels Ltd...............................         6.85
Crownridge Stainless Steel Limited.........................         6.85
Firth Rixson Special Steels, Ltd...........................       125.77
All Others *...............................................        6.85
------------------------------------------------------------------------
*Pursuant to section 735(c)(5)(A), we have excluded from the calculation
  of the all-others rate margins which are zero or de minimis, or
  determined entirely on facts available.

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.

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

Public Comment

    Case briefs for this investigation must be submitted to the 
Department no later than November 5, 2001. Rebuttal briefs must be 
filed by November 13, 2001. A list of authorities used, a table of 
contents, and an executive summary of issues should accompany any 
briefs submitted to the Department. Executive summaries should be 
limited to five pages total, including footnotes. Section 774 of the 
Act provides that the Department will hold a public hearing to afford 
interested parties an opportunity to comment on arguments raised in 
case or rebuttal briefs, provided that such a hearing is requested by 
an interested party. If a request for a hearing is made in this 
investigation, the hearing will tentatively be held on November 16, 
2001, 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 135 days after the publication of this 
notice in the Federal Register.
    This determination is published pursuant to sections 733(f) and 
777(i) of the Act.

    Dated: July 26, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-19346 Filed 8-1-01; 8:45 am]
BILLING CODE 3510-DS-P