[Federal Register Volume 66, Number 153 (Wednesday, August 8, 2001)]
[Notices]
[Pages 41538-41543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19784]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-427-814]


Preliminary Results of Antidumping Administrative Review: 
Stainless Steel Sheet and Strip in Coils From France

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

ACTION: Notice of preliminary results in the antidumping duty 
administrative review of stainless steel sheet and strip in coils from 
France.

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SUMMARY: In response to a request from Ugine S.A. (``Ugine''), the U.S. 
Department of Commerce (``Department'') is conducting an administrative 
review of the antidumping duty order on stainless steel sheet and strip 
(``SSSS'') from France for the period January 4, 1999 through June 30, 
2000. The Department preliminarily determines that a dumping margin 
exists for Ugine's sales of SSSS in the United States. If these 
preliminary results are adopted in our final results of this 
administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties on entries of Ugine's merchandise during the 
period of review. The preliminary results are listed in the section 
titled ``Preliminary Results of Review,'' infra.

EFFECTIVE DATE: August 8, 2001.

FOR FURTHER INFORMATION CONTACT: Robert Bolling or James Doyle, 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue, 
N.W., Washington, DC 20230; telephone: 202-482-3434, or 202-482-0159, 
respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``Act''), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the regulations codified at 19 CFR Part 351 (2001).

Background

    On July 27, 1999, the Department published in the Federal Register 
the amended antidumping duty order on SSSS from France. See Notice of 
Amended Final Determination of Sales at Less Than Fair Value and 
Antidumping Duty Order; Stainless Steel Sheet and Strip in Coils from 
France, 64 FR 40562 (July 27, 1999). On July 20, 2000, the Department 
published in the Federal Register a notice of ``Opportunity to Request 
Administrative Review'' of this antidumping duty order on stainless 
steel sheet and strip in coils from France for the period January 4, 
1999 through June 30, 2000. See Opportunity to Request Administrative 
Review 65 FR 45035 (July 20, 2000). On July 28, 2000, Ugine, a French 
producer and exporter of subject merchandise, requested that the 
Department conduct a review of its sales of the Department's 
antidumping duty order on SSSS from France. On September 6, 2000, in 
accordance with section 751(a) of the Act, the Department published in 
the Federal Register a notice of initiation of this antidumping duty 
administrative review for the period January 4, 1999 through June 30, 
2000. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 65 FR 53980 
(September 6, 2000).
    On October 16, 2000, Ugine reported that it made sales of subject 
merchandise to the United States during the period of review in its 
response to Section A of the Department's questionnaire. On November 7, 
2000, Ugine submitted its responses to Sections B, C, D, and E of the 
Department's questionnaire. On December 21, 2000, the Department issued 
a supplemental questionnaire for Sections A and B of Ugine's 
questionnaire response. On January 5, 2001, the Department issued a 
supplemental questionnaire for Section C of Ugine's questionnaire 
response. On January 25, 2001, the Department published an extension of 
time limit for the preliminary results of the antidumping duty 
administrative review. See Extension of Time Limit for the Preliminary 
Results of the Antidumping Duty Administrative Review of Stainless 
Steel Sheet and Strip in Coil from France, 66 FR 7738 (January 25, 
2001). On January 26, 2001, the Department issued a supplemental 
questionnaire for Sections D and E of Ugine's questionnaire response. 
On January 29, 2001, February 9, 2001, and February 23, 2001, Ugine 
submitted its response to the Department's first set of supplemental 
questionnaires. On March 29, 2001, the Department issued its second 
supplemental questionnaire for Sections A through E of Ugine's 
supplemental response. On April 13, 2001, Ugine submitted its response 
to the second supplemental questionnaire. On June 19, 2001, the 
Department published an extension of time limit for the preliminary 
results of the antidumping duty administrative review. See Extension of 
Time Limit for the Preliminary Results of the Antidumping Duty 
Administrative Review of Stainless Steel Sheet and Strip in Coil from 
France, 66 FR 32936 (June 19, 2001).

Scope of Review

    For purposes of this administrative review, the products covered 
are certain stainless steel sheet and strip in coils. Stainless steel 
is an alloy steel containing, by weight, 1.2 percent or less of carbon 
and 10.5 percent or more of chromium, with or without other elements. 
The subject sheet and strip is a flat-rolled product in coils that is 
greater than 9.5 mm in width and less than 4.75 mm in thickness, and 
that is annealed or otherwise heat treated and pickled or otherwise 
descaled. The subject sheet and strip may also be further processed 
(e.g., cold-rolled, polished, aluminized, coated, etc.) provided that 
it maintains the specific dimensions of sheet and strip following such 
processing.
    The merchandise subject to this order is currently classifiable in 
the Harmonized Tariff Schedule of the United States (``HTS'') at 
subheadings: 7219.13.0031, 7219.13.0051, 7219.13.0071, 7219.1300.81,\1\ 
7219.14.0030, 7219.14.0065, 7219.14.0090, 7219.32.0005, 7219.32.0020, 
7219.32.0025, 7219.32.0035, 7219.32.0036, 7219.32.0038, 7219.32.0042, 
7219.32.0044, 7219.33.0005, 7219.33.0020, 7219.33.0025, 7219.33.0035, 
7219.33.0036, 7219.33.0038, 7219.33.0042, 7219.33.0044, 7219.34.0005, 
7219.34.0020, 7219.34.0025, 7219.34.0030, 7219.34.0035, 7219.35.0005, 
7219.35.0015, 7219.35.0030, 7219.35.0035, 7219.90.0010, 7219.90.0020, 
7219.90.0025, 7219.90.0060, 7219.90.0080, 7220.12.1000, 7220.12.5000, 
7220.20.1010, 7220.20.1015, 7220.20.1060, 7220.20.1080, 7220.20.6005, 
7220.20.6010, 7220.20.6015,

[[Page 41539]]

7220.20.6060, 7220.20.6080, 7220.20.7005, 7220.20.7010, 7220.20.7015, 
7220.20.7060, 7220.20.7080, 7220.20.8000, 7220.20.9030, 7220.20.9060, 
7220.90.0010, 7220.90.0015, 7220.90.0060, and 7220.90.0080. Although 
the HTS subheadings are provided for convenience and Customs purposes, 
the Department's written description of the merchandise under review is 
dispositive.
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    \1\ Due to changes to the HTS numbers in 2001, 7219.13.0030, 
7219.13.0050, 7219.13.0070, and 7219.13.0080 are now 7219.13.0031, 
7219.13.0051, 7219.13.0071, and 7219.13.0081, respectively.
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    Excluded from the review of this order are the following: (1) Sheet 
and strip that is not annealed or otherwise heat treated and pickled or 
otherwise descaled, (2) sheet and strip that is cut to length, (3) 
plate (i.e., flat-rolled stainless steel products of a thickness of 
4.75 mm or more), (4) flat wire (i.e., cold-rolled sections, with a 
prepared edge, rectangular in shape, of a width of not more than 9.5 
mm), and (5) razor blade steel. Razor blade steel is a flat-rolled 
product of stainless steel, not further worked than cold-rolled (cold-
reduced), in coils, of a width of not more than 23 mm and a thickness 
of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent 
chromium, and certified at the time of entry to be used in the 
manufacture of razor blades. See Chapter 72 of the HTS, ``Additional 
U.S. Note'' 1(d).
    Flapper valve steel is also excluded from the scope of the order. 
This product is defined as stainless steel strip in coils containing, 
by weight, between 0.37 and 0.43 percent carbon, between 1.15 and 1.35 
percent molybdenum, and between 0.20 and 0.80 percent manganese. This 
steel also contains, by weight, phosphorus of 0.025 percent or less, 
silicon of between 0.20 and 0.50 percent, and sulfur of 0.020 percent 
or less. The product is manufactured by means of vacuum arc remelting, 
with inclusion controls for sulphide of no more than 0.04 percent and 
for oxide of no more than 0.05 percent. Flapper valve steel has a 
tensile strength of between 210 and 300 ksi, yield strength of between 
170 and 270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between 
460 and 590. Flapper valve steel is most commonly used to produce 
specialty flapper valves in compressors.
    Also excluded is a product referred to as suspension foil, a 
specialty steel product used in the manufacture of suspension 
assemblies for computer disk drives. Suspension foil is described as 
302/304 grade or 202 grade stainless steel of a thickness between 14 
and 127 microns, with a thickness tolerance of plus-or-minus 2.01 
microns, and surface glossiness of 200 to 700 percent Gs. Suspension 
foil must be supplied in coil widths of not more than 407 mm, and with 
a mass of 225 kg or less. Roll marks may only be visible on one side, 
with no scratches of measurable depth. The material must exhibit 
residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm 
over 685 mm length.
    Certain stainless steel foil for automotive catalytic converters is 
also excluded from the scope of this order. This stainless steel strip 
in coils is a specialty foil with a thickness of between 20 and 110 
microns used to produce a metallic substrate with a honeycomb structure 
for use in automotive catalytic converters. The steel contains, by 
weight, carbon of no more than 0.030 percent, silicon of no more than 
1.0 percent, manganese of no more than 1.0 percent, chromium of between 
19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of 
no more than 0.045 percent, sulfur of no more than 0.03 percent, 
lanthanum of less than 0.002 or greater than 0.05 percent, and total 
rare earth elements of more than 0.06 percent, with the balance iron.
    Permanent magnet iron-chromium-cobalt alloy stainless strip is also 
excluded from the scope of this order. This ductile stainless steel 
strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 
percent cobalt, with the remainder of iron, in widths 228.6 mm or less, 
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic 
remanence between 9,000 and 12,000 gauss, and a coercivity of between 
50 and 300 oersteds. This product is most commonly used in electronic 
sensors and is currently available under proprietary trade names such 
as ``Arnokrome III.'' \2\
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    \2\ ``Arnokrome III'' is a trademark of the Arnold Engineering 
Company.
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    Certain electrical resistance alloy steel is also excluded from the 
scope of this order. This product is defined as a non-magnetic 
stainless steel manufactured to American Society of Testing and 
Materials (ASTM) specification B344 and containing, by weight, 36 
percent nickel, 18 percent chromium, and 46 percent iron, and is most 
notable for its resistance to high temperature corrosion. It has a 
melting point of 1390 degrees Celsius and displays a creep rupture 
limit of 4 kilograms per square millimeter at 1000 degrees Celsius. 
This steel is most commonly used in the production of heating ribbons 
for circuit breakers and industrial furnaces, and in rheostats for 
railway locomotives. The product is currently available under 
proprietary trade names such as ``Gilphy 36.'' \3\
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    \3\ ``Gilphy 36'' is a trademark of Imphy, S.A.
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    Certain martensitic precipitation-hardenable stainless steel is 
also excluded from the scope of this order. This high-strength, ductile 
stainless steel product is designated under the Unified Numbering 
System (UNS) as S45500-grade steel, and contains, by weight, 11 to 13 
percent chromium, and 7 to 10 percent nickel. Carbon, manganese, 
silicon and molybdenum each comprise, by weight, 0.05 percent or less, 
with phosphorus and sulfur each comprising, by weight, 0.03 percent or 
less. This steel has copper, niobium, and titanium added to achieve 
aging, and will exhibit yield strengths as high as 1700 Mpa and 
ultimate tensile strengths as high as 1750 Mpa after aging, with 
elongation percentages of 3 percent or less in 50 mm. It is generally 
provided in thicknesses between 0.635 and 0.787 mm, and in widths of 
25.4 mm. This product is most commonly used in the manufacture of 
television tubes and is currently available under proprietary trade 
names such as ``Durphynox 17.'' \4\
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    \4\ ``Durphynox 17'' is a trademark of Imphy, S.A.
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    Finally, three specialty stainless steels typically used in certain 
industrial blades and surgical and medical instruments are also 
excluded from the scope of this order. These include stainless steel 
strip in coils used in the production of textile cutting tools (e.g., 
carpet knives).\5\ This steel is similar to AISI grade 420 but 
containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also 
contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 
0.020 percent or less, and includes between 0.20 and 0.30 percent 
copper and between 0.20 and 0.50 percent cobalt. This steel is sold 
under proprietary names such as ``GIN4 Mo.'' The second excluded 
stainless steel strip in coils is similar to AISI 420-J2 and contains, 
by weight, carbon of between 0.62 and 0.70 percent, silicon of between 
0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, 
phosphorus of no more than 0.025 percent and sulfur of no more than 
0.020 percent. This steel has a carbide density on average of 100 
carbide particles per 100 square microns. An example of this product is 
``GIN5'' steel. The third specialty steel has a chemical composition 
similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, 
molybdenum of between 1.15 and 1.35 percent, but lower manganese of 
between 0.20 and 0.80 percent, phosphorus of no more than 0.025 
percent, silicon of between 0.20 and 0.50 percent, and sulfur of no

[[Page 41540]]

more than 0.020 percent. This product is supplied with a hardness of 
more than Hv 500 guaranteed after customer processing, and is supplied 
as, for example, ``GIN6''.\6\
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    \5\ This list of uses is illustrative and provided for 
descriptive purposes only.
    \6\ ``GIN4 Mo,'' ``GIN5'' and ``GIN6'' are the proprietary 
grades of Hitachi Metals America, Ltd.
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Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by Ugine for use in our preliminary results. We 
used standard verification procedures, including examination of 
relevant accounting and production records and original source 
documents provided by Ugine. We verified sales and cost information 
provided by Ugine from May 2, 2001 to May 11, 2001. Additionally, we 
verified Ugine's U.S. subsidiary, Uginox Steel Corporation 
(``Uginox''), from May 30, 2001 through June 1, 2001. Further, we 
verified Ugine and Uginox's U.S. subsidiary, Hague Steel Corp. 
(``Hague''), from June 19, 2001 through June 22, 2001. Our verification 
results are outlined in the public version of the verification report 
and are on file in the Central Records Unit (``CRU'') located in room 
B-099 of the main Department of Commerce Building, 14th Street and 
Constitution Avenue, NW., Washington, DC.

Product Comparison

    In accordance with section 771(16) of the Act, we considered all 
SSSS products produced by Ugine, covered by the description in the 
``Scope of Review'' section of this notice, supra, and sold in the home 
market during the POR to be foreign like products for the purpose of 
determining appropriate product comparisons to SSSS products sold in 
the United States. We have relied on nine characteristics to match U.S. 
sales of subject merchandise to comparison sales of the foreign like 
product (listed in order of preference): grade, hot/cold rolled, gauge, 
finish, metallic coating, non-metallic coating, width, tempered/tensile 
strength, and edge trim. The Department's questionnaire authorized 
respondents to make distinctions (sub-codes) within some of these 
characteristics, but not within others. For certain product 
characteristics (i.e., finish and coating) Ugine reported additional 
sub-codes which were specifically permitted by the Department's 
questionnaire. However, Ugine also reported additional sub-codes in its 
hot/cold rolled, and tempered product characteristic categories. These 
are characteristics for which the Department's questionnaire did not 
explicitly permit sub-codes. Nevertheless, for this preliminary 
results, the Department has included the additional codes that Ugine 
reported in the aforementioned categories in the Department's product 
matching methodology. See Analysis Memo from Robert Bolling to The 
File, dated July 31, 2001. At verification, we reviewed respondent's 
claims for the additional sub-codes. See Home Market Sales and Cost 
Verification Report of Ugine at pages 6 and 7, dated July 31, 2001. In 
light of our findings at verification, we conclude that the use of 
these additional codes is appropriate, and have included these codes in 
the Department's product matching methodology. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product on the basis of the characteristics listed in the September 8, 
2000 antidumping duty questionnaire and instructions, or to constructed 
value (``CV''), as appropriate.

Export Price/Constructed Export Price

    We calculated CEP in accordance with section 772(b) of the Act 
because the first sales to an unaffiliated purchaser took place after 
the subject merchandise was imported into the United States.
    We based CEP on the packed ex-warehouse or delivered prices to 
unaffiliated purchasers in the United States. Where appropriate, we 
made deductions from the starting price for discounts, credit, warranty 
expenses, and commissions. We also made deductions for the following 
movement expenses, where appropriate, in accordance with section 
772(c)(2)(A) of the Act: inland freight from plant to distribution 
warehouse, international freight, marine insurance, U.S. inland freight 
from port to warehouse, U.S. inland freight from warehouse/plant to the 
unaffiliated customer, U.S. warehouse expenses, other U.S. 
transportation expense, and U.S. Customs duties. In accordance with 
section 772(d)(1) of the Act, we deducted selling expenses associated 
with economic activities occurring in the United States, including 
direct selling expenses, inventory carrying costs, and other indirect 
selling expenses. We recalculated credit expenses for those Uginox 
sales with missing payment dates because payment has not yet been made. 
For sales with missing payment dates, the Department set the date of 
payment as the projected preliminary results date. For a further 
explanation, see Analysis Memo from Robert Bolling to The File, dated 
July 31, 2001. Additionally, we recalculated certain commissions for 
Hague because at Hague's verification we discovered that for certain 
U.S. sales, Hague did not pay an arm's length price to the sales agent. 
See Hague Verification Report at page 11, dated July 25, 2001. We also 
adjusted the starting price for billing adjustments to the invoice 
price and freight revenue.
    For products that were further manufactured after importation, we 
adjusted for all costs of further manufacturing in the United States in 
accordance with section 772(d)(2) of the Act. We deducted the profit 
allocated to expenses deducted under section 772(d)(1) and (d)(2) in 
accordance with sections 772(d)(3) and 772(f) of the Act. In accordance 
with section 772(f) of the Act, we computed profit based on total 
revenues realized on sales in both the U.S. and home markets, less all 
expenses associated with those sales. We then allocated profit to 
expenses incurred with respect to U.S. economic activity (including 
further manufacturing costs), based on the ratio of total U.S. expenses 
to total expenses for both the U.S. and home market.
    In our U.S. CEP calculation, we included all downstream sales from 
Edgcomb Metals Company (``Edgcomb''), International Specialty Tube 
Corporation (``ISTC''), Hague, and J&L Specialty Steel, Inc., reported 
in respondent's November 7, 2000 submission.
    Additionally, on March 29, 2001, the Department requested that 
Ugine report all U.S. sales of subject merchandise of its home market 
affiliated producer, IUP, during the POR. IUP sold subject merchandise 
to the United States through Ugine's affiliated super-distributor 
Uginox and through Rahns Specialty Metal, Inc. (``Rahns''), an 
unaffiliated distributor. For the preliminary results, we have included 
all of IUP's U.S. sales of subject merchandise that went through both 
Uginox and Rahns during the POR.

Normal Value

    After testing home market viability, as discussed below, we 
calculated normal value (``NV'') as noted in the ``Price-to-CV 
Comparisons'' and ``Price-to-Price Comparisons'' sections of this 
notice.

1. Home Market Viability

    In accordance with section 773(a)(1)(C) of the Act, to determine 
whether there was sufficient volume of sales in the home market to 
serve as a viable basis for calculating NV (i.e., the aggregate volume 
of home market sales of the foreign like product is greater than or 
equal to five percent of the aggregate volume of U.S. sales), we

[[Page 41541]]

compared Ugine's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise. Because 
Ugine'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. We therefore based NV on home market sales.

Price-to-Price Comparisons

    For those product comparisons for which there were sales at prices 
above the cost of production (``COP''), we based NV on prices to home 
market customers. We calculated NV based on prices to unaffiliated home 
market customers. Where appropriate, we deducted discounts, rebates, 
credit expenses, warranty expenses, inland freight, inland insurance, 
and warehousing expense. We also adjusted the starting price for 
billing adjustments and freight revenue. We also made adjustments, 
where applicable, for home market indirect selling expenses to offset 
U.S. commissions in CEP comparisons.
    We recalculated credit expenses for those sales with missing 
payment dates. For sales with missing payment dates, the Department set 
the date of payment to the projected preliminary results date. See 
Analysis Memo from Robert Bolling to The File, dated July 30, 2001.
    We made adjustments, where appropriate, for physical differences in 
the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. 
Additionally, in accordance with section 773(a)(6), we deducted home 
market packing costs and added U.S. packing costs. In accordance with 
the Department's practice, where all contemporaneous matches to a U.S. 
sale observation resulted in difference-in-merchandise adjustments 
exceeding 20 percent of the cost of manufacturing (``COM'') of the U.S. 
product, we based NV on CV.
    For reasons discussed below in the ``Level of Trade'' section, we 
allowed a CEP offset for comparisons made at different levels of trade. 
To calculate the CEP offset, we deducted the home market indirect 
selling expenses from normal value for home market sales that were 
compared to U.S. CEP sales. We limited the home market indirect selling 
expense deduction by the amount of the indirect selling expenses 
deducted in calculating the CEP as required under section 772(d)(1)(D) 
of the Act.

Arm's-Length Sales

    Ugine reported that it made sales in the home market to affiliated 
end users. Sales to affiliated customers in the home market not made at 
arm's length were excluded from our analysis. To test whether these 
sales were made at arm's length, we compared the starting prices of 
sales to affiliated and unaffiliated customers net of all movement 
charges, direct selling expenses, discounts and packing. Where prices 
to the affiliated party were on average 99.5 percent or more of the 
price to the unrelated party, we determined that sales made to the 
related party were at arm's length. Where no affiliated customer ratio 
could be calculated because identical merchandise was not sold to 
unaffiliated customers, we were unable to determine that these sales 
were made at arm's length and, therefore, excluded them from our 
analysis. See e.g., 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 comparisons to the next most similar model. In our home market NV 
calculation, we have included Ugine's sales to its affiliated 
resellers, Ugine France Service (``UFS'') and Imphy Ugine Precision 
(``IUP''), because both UFS and IUP pass the Department's arm's length 
test criteria. Therefore, we have not included UFS nor IUP's downstream 
sales to its other affiliated resellers (i.e., Bernier, PUM, Paturle, 
and PMA).

Price-to-CV Comparisons

    In accordance with section 773(a)(4) of the Act, we based NV on CV 
if we were unable to find a home market match of identical or similar 
merchandise. We calculated CV based on the costs of materials and 
fabrication employed in producing the subject merchandise, selling, 
general and administrative expenses (``SG&A''), and profit. In 
accordance with section 773(e)(2)(A) of the Act, we based SG&A expense 
and profit on the amounts incurred and realized by the respondent in 
connection with the production and sale of the foreign like product in 
the ordinary course of trade for consumption in France. For selling 
expenses, we used the weighted-average home market selling expenses. 
Where appropriate, we made adjustments to CV in accordance with section 
773(a)(8) of the Act. We deducted from CV the weighted-average home 
market direct selling expenses.

1. Cost of Production Analysis

    Because we disregarded sales below the cost of production from the 
Less-Than-Fair-Value (``LTFV'') investigation, the most-recently 
completed segment of these proceedings, we have reasonable grounds to 
believe or suspect that sales by Ugine in its home market were made at 
prices below the COP, pursuant to section 773(b)(1) of the Act. See 
Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Sheet and Strip in Coils from France, 64 FR 308204 
(June 8, 1999) (``Final Determination''). Therefore, pursuant to 
section 773 (b)(1) of the Act, we conducted a COP analysis of home 
market sales by Ugine.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of Ugine's cost of materials and 
fabrication for the foreign like product, plus amounts for general and 
administrative expenses (``G&A''), including interest expenses, and 
packing costs. We relied on the COP data submitted by Ugine in its 
original and supplemental cost questionnaire responses. For these 
preliminary results, we did not make any adjustments to Ugine's 
submitted costs.
B. Test of Home Market Prices
    We compared the weighted-average COP for Ugine to home market sales 
of the foreign like product, as required under section 773(b) of the 
Act, in order to determine whether these sales had been made at prices 
below the COP. In determining whether to disregard home market sales 
made at prices below the COP, we examined whether such sales were made 
(1) within an extended period of time in substantial quantities, and 
(2) at prices which permitted the recovery of all costs within a 
reasonable period of time in the normal course of trade, in accordance 
with section 773(b)(1)(A) and (B) of the Act. On a product-specific 
basis, we compared the COP to home market prices, less any applicable 
billing adjustments, movement charges, discounts, and direct and 
indirect selling expenses.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of Ugine's sales of a given product were at prices less than 
the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of Ugine's sales 
of a given product during the POR were at prices less than the COP, we 
determined that such sales have been made in

[[Page 41542]]

``substantial quantities'' within an extended period of time, in 
accordance with section 773(b)(2)(B) of the Act. In such cases, because 
we use POR average costs, we also determined that such sales were not 
made at prices which would permit recovery of all costs within a 
reasonable period of time, in accordance with section 773(b)(2)(D) of 
the Act. Therefore, we disregarded the below-cost sales.
D. Calculation of Constructed Value
    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of Ugine's cost of materials, fabrication, G&A 
(including interest expenses), U.S. packing costs, direct and indirect 
selling expenses, and profit. In accordance with section 773(e)(2)(A) 
of the Act, we based SG&A and profit on the amounts incurred and 
realized by Ugine in connection with the production and sale of the 
foreign like product in the ordinary course of trade, for consumption 
in the foreign country. For selling expenses, we used the actual 
weighted-average home market direct and indirect selling expenses.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP or CEP transaction. The NV LOT 
is that of the starting-price sales in the comparison market, or when 
NV is based on constructed value (CV), that of the sales from which we 
derive selling, general and administrative (SG&A) expenses and profit. 
For EP, the U.S. LOT is also the level of the starting-price sale, 
which is usually from exporter to importer. For CEP, it is the level of 
the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison market sales are at a 
different LOT, and the difference affects price comparability as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP offset provision). See, e.g., 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 reviewing the selling functions reported by the respondents, we 
examined all types of selling functions and activities reported in 
respondent's questionnaire response on LOT and during verification. In 
analyzing whether separate LOTs existed in this review, we found that 
no single selling function was sufficient to warrant a separate LOT in 
the home market. See Antidumping Duties; Countervailing Duties, Final 
Rule, 63 FR 65347 (November 25, 1998).
    We determined that Ugine sold merchandise at two LOTs in the home 
market during the POR. One level of trade involved sales made through 
two channels: Sales by Ugine directly to unaffiliated service centers 
or end users (Channel 1) and sales made by Ugine with the assistance of 
Ugine France Service in its capacity as sales agent, to unaffiliated 
end users (Channel 2). Additionally, the second level of trade involved 
sales made through two channels: Sales from Ugine to its affiliate, 
IUP, with subsequent resales by IUP to unaffiliated end users and 
service centers (Channel 3) and sales from Ugine to its affiliate, IUP, 
and then, with the assistance of Ugine France Service in its capacity 
as sales agent, to unaffiliated end users (Channel 4). From our 
analysis of the marketing process for these sales, we have determined 
that there are significant distinctions in selling activities between 
Ugine's sales to its affiliate in Channels 3 and 4 and its sales 
through channel 1 or 2. See Memorandum from Robert A. Bolling to Edward 
Yang, dated July 31, 2001, on file in Import Administration's Central 
Records Unit, Room B-099, U.S. Department of Commerce, 14th & 
Constitution Avenue, NW., Washington, DC. Based on these differences, 
we concluded that two LOTs existed in the home market.
    In order to determine the LOTs of the U.S. market, we reviewed the 
selling activities associated with each channel of distribution. Ugine 
only reported CEP sales in the U.S. market. Because all of Ugine's CEP 
sales in the U.S. market were made through either Uginox or Rahns, 
where Ugine has characterized both as super-distributors that perform 
the same selling functions, there was only one level of trade. For 
these CEP sales, we determined that fewer and different selling 
functions were performed for CEP sales to Uginox and Rahns than for 
sales at either of the home market LOTs. In addition, we found that 
sales at both home market LOTs were at a more advanced stage of 
distribution (to end-users) compared to the CEP sales.
    We examined whether a LOT adjustment was appropriate. The 
Department makes this adjustment when it is demonstrated that a 
difference in LOTs affects price comparability. However, where the 
available data do not provide an appropriate basis upon which to 
determine a LOT adjustment, and where the NV is established at a LOT 
that is at a more advanced stage of distribution than the LOT of the 
CEP transactions, we adjust NV under section 773(a)(7)(B) of the Act 
(the CEP offset provision). We were unable to quantify the LOT 
adjustment in accordance with section 773(a)(7)(A) of the Act, as we 
found that neither of the LOTs in the home market matched the LOT of 
the CEP transactions. Because of this, we did not calculate a LOT 
adjustment. Instead, a CEP offset was applied to the NV-CEP 
comparisons. See Memorandum from Robert A. Bolling to Edward Yang, 
dated July 30, 2001, on file in Import Administration's Central Records 
Unit, Room B-099, U.S. Department of Commerce, 14th & Constitution 
Avenue, NW., Washington, DC.

Currency Conversion

    For purposes of the preliminary results, we made currency 
conversions in accordance with section 773A of the Act, based on the 
official exchange rates in effect on the dates of the U.S. sales as 
certified by the Federal Reserve Bank of New York. Section 773A(a) of 
the Act directs the Department to use the daily exchange rate in effect 
on the date of sale in order to convert foreign currencies into U.S. 
dollars, unless the daily rate involves a ``fluctuation.'' In 
accordance with the Department's practice, we have determined as a 
general matter that a fluctuation exists when the daily exchange rate 
differs from a benchmark by 2.25 percent. See, e.g., Certain Stainless 
Steel Wire Rods from France; Preliminary Results of Antidumping Duty 
Administrative Review, 61 FR 8915, 8918 (March 6, 1998), and Policy 
Bulletin 96-1: Currency Conversions, 61 FR 9434 (March 8, 1996). The 
benchmark is defined as the rolling average of rates for the past 40 
business days. When we determine a fluctuation exists, we substitute 
the benchmark for the daily rate.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the

[[Page 41543]]

following weighted-average dumping margin exists:

                Stainless Steel Sheet and Strip in Coils
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
               Producer/manufacturer/exporter                   margin
                                                              (percent)
------------------------------------------------------------------------
Ugine......................................................         3.43
------------------------------------------------------------------------

    Pursuant to 19 CFR 351.224, the Department will disclose to any 
party to the proceeding, within ten days of publication of this notice, 
the calculations performed. Any interested party may request a hearing 
within 30 days of publication. Any hearing, if requested, will be held 
37 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 35 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.
    Upon issuance of the final results of review, the Department shall 
determine, and Customs shall assess, antidumping duties on all 
appropriate entries. 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 the results and for future deposits of 
estimated duties. For duty assessment purposes, we calculated an 
importer-specific assessment rate by dividing the total dumping margins 
calculated for the U.S. sales to the importer by the total entered 
value of these sales. This rate will be used for the assessment of 
antidumping duties on all entries of the subject merchandise by that 
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 the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided in section 751(a)(1) 
of the Act: (1) The cash deposit rate for Ugine, the only reviewed 
company, will be that established in the final results of this review; 
(2) For previously reviewed or investigated companies not covered in 
this review, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) If the exporter 
is not a firm covered in this review, a prior review, or the original 
LTFV investigation, but the manufacturer is, the cash deposit rate will 
be the rate established in the most recent period for the manufacturer 
of the merchandise; and (4) If neither the exporter nor the 
manufacturer is a firm covered in this or any previous review conducted 
by the Department, the cash deposit rate will continue to be the ``all 
other'' rate established in the LTFV investigation, which was 9.38 
percent. See Notice of Amended Final Determination of Sales at Less 
Than Fair Value and Antidumping Duty Order; Stainless Steel Sheet and 
Strip in Coils from France, 64 FR 40562 (July 27, 1999).
    This notice serves as a preliminary reminder to importers of their 
responsibility under regulation 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. 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 is published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 31, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-19784 Filed 8-7-01; 8:45 am]
BILLING CODE 3510-DS-P