[Federal Register Volume 66, Number 198 (Friday, October 12, 2001)]
[Notices]
[Pages 52095-52097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25705]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-822]


Certain Corrosion-Resistant Carbon Steel Flat Products From 
Canada; Notice of Amended Final Results of Administrative Review in 
Accordance With North American Free Trade Agreement Panel Decision

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

ACTION: Notice of amended final results of Administrative Review in 
accordance with North American Free Trade Agreement Panel Decision on 
Certain Corrosion-Resistant Carbon Steel Flat

[[Page 52096]]

Products from Canada. USA-CDA-98-1904-01.

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SUMMARY: On August 24, 2001, the North American Free Trade Agreement 
(NAFTA) Panel affirmed the Department of Commerce's final remand 
results of the antidumping duty administrative review of certain 
corrosion-resistant carbon steel flat products from Canada. As there is 
now a final and conclusive NAFTA Panel decision in this action, we are 
amending our final results.

EFFECTIVE DATE: October 12, 2001.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley at (202) 482-0666 or 
Julio Fernandez at (202) 482-0190, Office of AD/CVD Enforcement VII, 
Group III, Import Administration, International Trade Administration, 
U.S. Department of Commerce, Room 7866, 14th Street and Constitution 
Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    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's regulations are 
to the regulations set forth at 19 CFR part 351 (2000).

Background

    On March 16, 1998, the Department of Commerce (the Department) 
published its final results for the administrative review of certain 
corrosion-resistant carbon steel flat products from Canada for the 
period August 1, 1995 through July 31, 1996. See Certain Corrosion-
Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon 
Steel Plate from Canada: Final Results of Antidumping Duty 
Administrative Reviews, 63 FR 12725 (March 16, 1998) (Final Results). 
One of the respondents in this review was Stelco Inc. (Stelco).
    In the Final Results, with respect to Stelco's cost of producing 
the subject merchandise, the Department explained that, in accordance 
with its standard practice for valuing major inputs supplied by 
affiliated companies, it had valued coating services and painting 
services supplied by Baycoat Partnership (Baycoat) and Z-Line Company 
(Z-Line), respectively, pursuant to the major input rule and the 
transactions disregarded rule, at the highest of three valuations: The 
transfer price between the affiliated parties; the market price between 
unaffiliated parties (which, in this case, was inapplicable, as there 
were no unaffiliated transactions to indicate market price); and the 
affiliated supplier's cost of producing the input. See Final Results, 
at 63 FR 18464.
    In responding to the Department's questionnaire, Stelco only 
supplied Z-Line's ``actual cost of the operation in a manner consistent 
with other Hilton Works operating units,'' and Baycoat's transfer price 
adjusted for profit remitted to Stelco. In the Final Results, the 
Department increased the reported cost of coating and painting by the 
weighted average difference between invoice (i.e. transfer price) 
values from the sample invoices of the respective services to Stelco, 
obtained at verification, and the values reported by Stelco. The 
Department determined that these transfer prices were above the 
affiliated supplier's cost of producing these inputs. Therefore, for 
the final results of review, the Department used the transfer prices to 
value such inputs when calculating Stelco's cost of production (COP) 
and constructed value (CV). See Final Results.
    With regard to the Department's calculation of imputed credit 
expenses, in the Final Results the Department applied the Federal 
Reserve rate in its calculations of Stelco's imputed credit expenses in 
the United States for each transaction during the period of review 
(POR). Furthermore, to calculate imputed credit expenses for sales in 
which payment was not received by the time Stelco submitted its 
response to the agency, the Department applied the date of its final 
results as the surrogate payment date.
    On March 20, 2001, the NAFTA Panel remanded the above-referenced 
proceeding to the Department with instructions to: (1) Recalculate 
Stelco's costs of production, taking account of the year-end return of 
profits by Baycoat and Z-Line to Stelco; provide the Panel with the 
method by which the Department recalculates COP in light of such return 
of profits; and explain the Department's methodology in light of the 
statutory requirements and attendant legislation as interpreted by this 
Panel; (2) to reevaluate the application of section 773(f)(3) of the 
Act in light of the requirement that the Department adjust the transfer 
price in accordance with the recalculation set out under (1) 
immediately above; and (3) to correct any errors on the imputed credit 
expense and payment date issues, in light of Stelco's complaint. See 
Article 1904 Panel Review Pursuant to the North American Free Trade 
Agreement: Panel Determination and Remand, Stelco, Inc. v. United 
States Department of Commerce, USA-CDA-98-1904-01 (March 20, 2001) 
(Panel Decision).
    Pursuant to its receipt of the NAFTA Panel's remand instructions, 
the Department issued a supplemental questionnaire to Stelco. On June 
25, 2001, Stelco submitted its response to this questionnaire 
(Supplemental Response). On July 6, 2001, the Department issued its 
draft remand results and requested comments from interested parties. 
See Draft Results of Redetermination: North American Free Trade 
Agreement, Article 1904 Panel Review, USA-CDA-98-1904-01 (July 6, 2001) 
(Draft Remand Results). In the Draft Remand Results, we reconsidered 
our methodology in accordance with the Panel Decision. On July 11, 
2001, respondent filed comments on the Draft Remand Results. No party 
filed rebuttal comments.
    On July 20, 2001, the Department issued its final remand results, 
which are discussed in detail below. See Final Remand Determination: 
North American Free Trade Agreement, Article 1904 Panel Review, USA-
CDA-98-1904-01 (July 20, 2001) (Final Remand Results).
    Pursuant to the order of the Panel, the Department recalculated 
Stelco's COP by taking into account year-end return of profits to 
Stelco from Baycoat and Z-Line, as reported in Stelco's Supplemental 
Response. See Final Remand Results. The methodologies adopted for 
recalculating Stelco's COP, by accounting for profits returned to 
Baycoat and Z-Line, were used in light of the Panel's interpretation of 
the relevant statutory provisions and their legislative history, 
including those provisions set forth in subsections 773(f)(2) and 
(f)(3).
    Specifically, the Panel found that the Department failed to 
reasonably comply with the requirement to establish that the amount, 
which in the instant case the Panel found to be the invoice prices less 
profits returned from Baycoat, ``did not fairly reflect'' the amount 
usually reflected in sales. The NAFTA Panel further found that even if 
the Department were entitled to rely on the invoice prices paid by 
Stelco, rather than the invoice price adjusted for profit remittances, 
the Department has not established that it has taken due account of all 
material factors in arriving at a reasonable calculation of costs.
    In light of the Panel's statement that it has remanded the case for 
the Department to compare Baycoat's transfer price without profits to 
the COP, we interpreted the Panel's ruling to mean that, pursuant to 
the major input rule, the Department is to ensure that the value of the 
major inputs used

[[Page 52097]]

to calculate Stelco's COP are not below the cost of producing such 
inputs. In the Final Remand Results, we recalculated Stelco's COP for 
the subject merchandise based upon the adjusted transfer price. Where 
the Department found that the adjusted transfer price value was less 
than Baycoat and Z-Line's respective costs of producing such inputs, 
the Department used the COP for such inputs, pursuant to the major 
input rule.
    We note that the NAFTA Panel's ruling does not establish binding 
precedent and that the Department believes its interpretation of these 
statutory rules is reasonable and consistent with the intent of 
Congress. We also note that, in future reviews, the Department intends 
to pursue an examination of market price more fully to ensure 
appropriate application of the test, consistent with subsections 
773(f)(2) and (f)(3) of the Act.
    The Department also reconsidered the calculation of Stelco's 
imputed credit expense in the United States during the POR and its 
choice of surrogate payment dates where payment was not remitted at the 
time of submission. In addition, we corrected a clerical error, as 
alleged by respondent in its comment on the Draft Remand Results. See 
Final Remand Results.
    On August 24, 2001, the Panel affirmed the Department's Final 
Remand Results. As this case is now final and conclusive, we are 
amending the Final Results of review. As a result of our 
recalculations, based upon the changes set forth above, we have revised 
the dumping margin for respondent.

Amendment to Final Results of Review

    Because no further appeals have been filed and there is now a final 
and conclusive decision in the Panel Decision proceeding, effective as 
of the publication date of this notice, we are amending the Final 
Results, and establishing the following revised weight-averaged dumping 
margin:

------------------------------------------------------------------------
                                                               Amended
                                                                final
                          Company                              results
                                                              1995-1996
                                                              (percent)
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Stelco Ltd.................................................         0.00
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    Dated: October 5, 2001.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-25705 Filed 10-11-01; 8:45 am]
BILLING CODE 3510-DS-P