[Federal Register Volume 66, Number 149 (Thursday, August 2, 2001)]
[Notices]
[Pages 40198-40201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19347]



[[Page 40198]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-836]


Notice of Preliminary Determination of Sales at Not Less Than 
Fair Value and Postponement of Final Determination: Stainless Steel Bar 
From Taiwan

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

ACTION: Notice of preliminary determination of sales at not less than 
fair value.

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SUMMARY: We preliminarily determine that stainless steel bar from 
Taiwan is not being, nor 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: Blanche Ziv or Annika O'Hara, Office 
1, AD/CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4207 and (202) 482-3798, 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 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. 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 Taiwan are materially injuring the United States industry (see ITC 
Investigation No. 701-TA-913-918 (Publication No. 3395)).
    On February 21, 2001, we selected the largest producer/exporter of 
SSB from Taiwan as the mandatory respondent in this proceeding. For 
further discussion, see Memorandum from The Team to Richard W. 
Moreland, dated February 21, 2001. We issued an antidumping 
questionnaire to the selected respondent, Gloria Metals Technology 
Corporation, (``Gloria''), on February 21, 2001.
    In February and March, 2001, the petitioners in this case (i.e., 
Carpenter Technology Corp., Crucible Specialty Metals, Electralloy 
Corp., Empire Specialty Steel Inc., Slater Steels Corp., and the United 
Steelworkers of America) 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 the 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 Memorandum from The Stainless 
Steel Bar Teams to Louis Apple and Susan Kuhbach, Directors, Office of 
AD/CVD Enforcement 1/2, dated April 3, 2001).
    During the period March through June 2001, the Department received 
responses to Sections A, B, C and D of the Department's original and 
supplemental questionnaires from Gloria and its affiliate, Golden Win 
Steel Corporation (``Golden Win'') (collectively, ``Gloria'').
    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)).

Postponement of Final Determination

    Pursuant to section 735(a)(2)(B) of the Act, on July 17, 2001, the 
petitioners requested that, in the event of a negative preliminary 
determination, the Department postpone its final determination in this 
investigation. In accordance with 19 CFR 351.210(b)(i), because our 
preliminary determination is negative and no compelling reasons for 
denial exist, we are granting the petitioners' request and are 
postponing the final determination until no later than 135 days after 
the publication of this notice in the Federal Register.

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.

[[Page 40199]]

    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 (66 FR at 7620-7621). The respondents in 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 separate class or kind of merchandise 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 and the 
scope does not cover stainless steel with such cross sections in the 
shape of concave polygons. 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. Because the petitioners intended for 
this product to be included in the scope, we have determined that the 
scope language is not overly-inclusive with regard to this product. As 
a result, we have not modified the scope of this investigation because 
the current scope language includes hot-rolled bar, as intended by the 
petitioners. (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.

Fair Value Comparisons

    To determine whether sales of SSB from Taiwan to the United States 
were made at less than fair value (``LTFV''), we compared the export 
price (``EP'') to the Normal Value (``NV''), as described in the 
``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 EP to NV.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the Gloria in the home market during the 
POI that fit the description in the ``Scope of Investigation'' section 
of this 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 respondents in the following order of importance: general type of 
finish; grade; remelting process; type of final finishing operation; 
shape; and size.
    On July 11 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.

Export Price

    We calculated EP, in accordance with section 772(a) of the Act, 
because the merchandise was sold to the first unaffiliated purchaser in 
the United States prior to importation by the exporter or producer 
outside the United States, based on the facts of record. We based EP on 
the packed delivered price to unaffiliated purchasers in the United 
States. We made adjustments for returns. We 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, international freight, marine insurance, and 
U.S. customs duties (including harbor maintenance fees and merchandise 
processing fees). (See Calculation Memorandum dated July 26, 2001.)

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)(C) of the 
Act. Because the respondent's aggregate volume of home market sales of 
the foreign like product was greater than five percent of its aggregate 
volume of U.S. sales for the subject merchandise, we determined that 
the home market was viable for the respondent.

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 Gloria's sales to 
affiliates as follows.
    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

[[Page 40200]]

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 the 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 7624).
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 
Gloria, except in the following instances: We made adjustments to the 
reported direct material costs to account for costs differences between 
grades; we have increased the reported costs for direct materials, 
direct labor, and fixed and variable overhead, based on information in 
Gloria's financial statements; and we have recalculated the G&A expense 
ratio to exclude an item that was inappropriately included as an offset 
to the respondent's G&A calculation. (See Calculation Memorandum dated 
July 26, 2001.)
2. Test of Home Market Sales Prices
    On a product-specific basis, we compared the adjusted 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, and direct and indirect selling expenses. 
In determining whether to disregard home market sales made at prices 
less than their COP, we examined 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.'' Pursuant to 773(b)(2)(C), ``substantial 
quantities'' exist when the volume of sales made at below the COP 
represents 20 percent or more of the volume of sales under 
consideration for the determination of normal value. 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 Gloria's home market sales were at prices less than the COP and, in 
addition, such sales were made within an extended 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).
    For those U.S. sales of SSB for which there were no comparable home 
market sales in the ordinary course of trade (e.g., above-cost), we 
compared EP sales to constructed value (``CV''), in accordance with 
section 773(a)(4) of the Act.

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. 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''),\1\ including selling 
functions,\2\ class of customer (``customer category''), and the level 
of selling expenses for each type of sale.
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    \1\ The marketing process in the United States 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.
    \2\ 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 \3\), we consider the 
starting prices before any adjustments. See Micron Technology, Inc. v. 
United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 2001) (affirming 
this methodology).
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    \3\ Where NV is based on 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, the Department may compare the U.S. sale to sales at a different 
LOT in the comparison market. In comparing EP 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.
    Gloria has reported that it sells to distributors and end users in 
the home

[[Page 40201]]

market and to trading companies and end users in the United States. 
Gloria has reported a single channel of distribution and a single level 
of trade in each market, and has not requested a level of trade 
adjustment. We examined the information reported by Gloria regarding 
its marketing process for making the reported home market and U.S. 
sales, including the type and level of selling activities performed and 
customer categories. As Gloria has reported, we found a single level of 
trade in the United States, and a single, identical level of trade in 
the home market. Thus, it was unnecessary to make any level-of-trade 
adjustment for comparison of EP and home market prices.

E. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on delivered prices to unaffiliated 
customers. We adjusted the reported quantity to account for returns. We 
made deductions, where appropriate, from the starting price for inland 
freight and warehousing. 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 of the Department's regulations. In addition, we made 
adjustments under section 773(a)(6)(C)(iii) of the Act for differences 
in circumstances of sale for direct selling expenses, imputed credit 
expenses and warranties.
    We also made adjustments, in accordance with 19 CFR 351.410(e), for 
indirect selling expenses incurred in the comparison market or the 
United States, where commissions were granted on sales in one market 
but not in the other (the ``commission offset''). Gloria paid 
commissions on some U.S. sales of subject merchandise but did not pay 
commissions on its home market sales. Therefore, in accordance with 19 
CFR 351.410(e), we offset the commission incurred in the U.S. market, 
with indirect selling expenses incurred in the home market (i.e., 
indirect selling expenses and inventory carrying costs) by the lesser 
of the commission or the indirect selling expenses. We adjusted Golden 
Win's reported indirect selling expense ratio to account for Gloria's 
overstatement of deductions to the total indirect selling expense 
amount. We also deducted home market packing costs and added U.S. 
packing costs in accordance with section 773(a)(6)(A) and (B) of the 
Act.

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

    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                              Weighted-average  margin
           Exporter/manufacturer                     percentage
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Gloria Metals Technology..................  0.98 (de minimis.)
All Others................................  0.98 (de minimis.)
------------------------------------------------------------------------

    Because the estimated weighted-average dumping margin for Gloria, 
the only examined company, is de minimis, we are not directing the 
Customs Service to suspend liquidation of entries of SSB from Taiwan.

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, 
pursuant to section 735(b)(3) of the Act, the ITC will determine within 
75 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 2, 2001. Rebuttal briefs must be 
filed by November 9, 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 14, 
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. 01-19347 Filed 8-1-01; 8:45 am]
BILLING CODE 3510-DS-P