[Federal Register Volume 66, Number 249 (Friday, December 28, 2001)]
[Notices]
[Pages 67217-67223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31989]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-814]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Structural Steel Beams 
From the Russian Federation

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 structural steel beams from 
the Russian Federation are being, or are 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: December 28, 2001.

FOR FURTHER INFORMATION CONTACT: Hermes Pinilla or Richard Rimlinger, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3477 or (202) 482-4477, 
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. 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 2001).

Background

    Since the initiation of this investigation (Initiation of 
Antidumping Duty Investigations: Structural Steel Beams From the 
People's Republic of China, Germany, Italy, Luxembourg, Russia, South 
Africa, Spain, and Taiwan, 66 FR 33048 (June 20, 2001) (Initiation 
Notice)), the following events have occurred.
    On July 9, 2001, the United States International Trade Commission 
(``ITC'') preliminarily determined that there is a reasonable 
indication that imports of structural steel beams from the Russian 
Federation are materially injuring the United States industry (see ITC 
Investigation Nos. 731-TA-935-942 (Publication No. 3438)).
    We issued the antidumping questionnaire to Guryevsk Steel Works, 
Magnitogorsk Iron and Steel Works, and Nizhny Tagil Iron and Steel 
Works on July 18, 2001. We only received a questionnaire response from 
Nizhny Tagil Iron and Steel Works (Tagil).
    During the period August through October 2001, the Department 
received responses to sections A, C, and D of the Department's original 
and supplemental questionnaires from Tagil.
    On September 25, 2001, pursuant to 19 CFR 351.205(e), the 
petitioners made

[[Page 67218]]

a timely request to postpone the preliminary determination. We granted 
this request on October 2, 2001, and postponed the preliminary 
determination until no later than November 30, 2001. (See Notice of 
Postponement of Preliminary Determinations of Sales at Less Than Fair 
Value: Structural Steel Beams from the People's Republic of China, 
Germany, Italy, Luxembourg, Russia, South Africa, Spain and Taiwan, 66 
FR 51639 (October 10, 2001).) On October 30, 2001, the petitioners made 
another timely request to postpone the preliminary determination for an 
additional 19 days. We granted this request on October 31, 2001, and 
postponed the preliminary determination until no later than December 
19, 2001. (See Notice of Postponement of Preliminary Antidumping Duty 
Determinations: Structural Steel Beams from the People's Republic of 
China, Germany, Italy, Luxembourg, Russia, South Africa, Spain and 
Taiwan, 66 FR 56078 (November 6, 2001)).

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on December 7, 2001, 
Tagil 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) Tagil accounts 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

    The scope of this investigation covers doubly-symmetric shapes, 
whether hot-or cold-rolled, drawn, extruded, formed or finished, having 
at least one dimension of at least 80 mm (3.2 inches or more), whether 
of carbon or alloy (other than stainless) steel, and whether or not 
drilled, punched, notched, painted, coated, or clad. These structural 
steel beams include, but are not limited to, wide-flange beams (``W'' 
shapes), bearing piles (``HP'' shapes), standard beams (``S'' or ``I'' 
shapes), and M-shapes. All the products that meet the physical and 
metallurgical descriptions provided above are within the scope of this 
investigation unless otherwise excluded. The following products are 
outside and/or specifically excluded from the scope of this 
investigation: (1) Structural steel beams greater than 400 pounds per 
linear foot, (2) structural steel beams that have a web or section 
height (also known as depth) over 40 inches, and (3) structural steel 
beams that have additional weldments, connectors, or attachments to I-
sections, H-sections, or pilings; however, if the only additional 
weldment, connector or attachment on the beam is a shipping brace 
attached to maintain stability during transportation, the beam is not 
removed from the scope definition by reason of such additional 
weldment, connector, or attachment.
    The merchandise subject to this investigation is classified in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') at 
subheadings 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 
7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 
7228.70.3040, and 7228.70.6000. Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the merchandise under investigation is dispositive.

Scope Comments

    In accordance with the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), 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 
33048-33049). Interested parties submitted such comments by July 10, 
2001. Additional comments were subsequently submitted by interested 
parties.
    Pursuant to the Department's solicitation of scope comments in the 
Initiation Notice, interested parties in this and the concurrent 
structural steel beams investigations request that the following 
products be excluded from the scope of the investigations: (1) Beams of 
grade A913/65 and (2) forklift mast profiles.
    With respect to the scope-exclusion requests for the A913/65 beam 
and forklift mast profiles, the interested parties rely upon 19 CFR 
351.225(k)(2) and reason that, in general, these products differ from 
the structural steel beams covered by the scope of the investigations 
in terms of physical characteristics, ultimate uses, purchaser 
expectations, channels of trade, manner of advertising and display and/
or price. They also argue that these products are not produced by the 
petitioners.
    In considering whether these products should be included within the 
scope of the investigations, we analyzed the arguments submitted by all 
of the interested parties in the context of the criteria enumerated in 
the court decision Diversified Products Corp. v. United States, 572 F. 
Supp. 883, 889 (CIT 1983) (``Diversified''). For these analyses, we 
relied upon the petition, the submissions by all interested parties, 
the International Trade Commission's (``ITC'') preliminary 
determination, and other information.
    After considering the respondent's comments and the petitioners' 
objections to the exclusion requests regarding the A913/65 beam, we 
find that the description of this grade of structural steel beam is 
dispositive such that further consideration of the criteria provided in 
their submissions is unnecessary. Furthermore, the description of the 
merchandise contained in the relevant submissions pertaining to this 
grade of beam does not preclude this product from being within the 
scope of the investigations. Accordingly, we preliminarily determine 
that the A913/65 beam does not constitute a separate class or kind of 
merchandise and, therefore, falls within the scope as defined in the 
petition.
    With respect to forklift mast profiles, having considered the 
comments we received from the interested parties and the criteria 
enumerated in Diversified, we find that the profiles in question, being 
doubly-symmetric and having an I-shape, fall within the scope of the 
investigations. These profiles also meet the other criteria included in 
the scope language contained in the petition. While the description by 
the interested party requesting the exclusion indicates some 
differences, such as in price, between forklift mast profiles and 
structural steel beams, these differences are not sufficient to 
recognize forklift mast profiles as a separate class or kind of 
merchandise. However, given these differences between forklift mast 
profiles and structural steel beams, we preliminarily determine that 
forklift mast profiles should be separately identified for model-
matching purposes.
    We also received a scope-exclusion request by an interested party 
for fabricated steel beams. This request was subsequently withdrawn 
pursuant to an agreement with the petitioners to clarify the scope 
language by adding that

[[Page 67219]]

``* * * beams that have additional weldments, connectors or attachments 
to I-sections, H-sections, or pilings are outside the scope 
definition.'' However, ``* * * if the only additional weldment, 
connector or attachment on the beam is a shipping brace attached to 
maintain stability during transportation, the beam is not removed from 
the scope definition by reason of such additional weldment, connector 
or attachment.'' Accordingly, we modified the scope definition to 
account for this clarification. See the ``Scope'' section above.
    We have addressed these scope-exclusion requests in detail in a 
Memorandum to Louis Apple and Laurie Parkhill, Directors, AD/CVD 
Enforcement Group I, Offices 2 and 3, respectively, from The Structural 
Steel Beams Teams Re: Scope Exclusion Requests, dated December 19, 
2001.

Period of Investigation

    The period of investigation (``POI'') is October 1, 2000, through 
March 31, 2001.

Non-Market Economy Country Status for the Russian Federation

    The Department has treated the Russian Federation as a non-market-
economy (``NME'') country in all past antidumping duty investigations 
and administrative reviews. See, e.g., Notice of Final Determination of 
Sales at Not Less Than Fair Value: Pure Magnesium From the Russian 
Federation, 66 Fr 49347 (September 27, 2001); Notice of Final 
Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled 
Carbon-Quality Steel Products from the Russian Federation, 64 FR 38626 
(July 19, 1999); Titanium Sponge from the Russian Federation: Final 
Results of Antidumping Administrative Review, 64 FR 1599 (Jan. 11, 
1999); Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Cut-to-Length Carbon Steel Plate from the Russian Federation, 
62 FR 61787 (Nov. 19, 1997); Notice of Final Determination of Sale at 
Less Than Fair Value: Pure Magnesium and Alloy Magnesium from the 
Russian Federation, 60 FR 16440 (Mar. 30, 1995) (Magnesium from Russia 
Original Investigation Final Determination). A designation as a NME 
remains in effect until it is revoked by the Department. See section 
771(18)(C) of the Act.
    When the Department is investigating imports from a NME country, 
section 773(c)(1) of the Act directs us to base normal value (``NV'') 
on the NME producer's factors of production, valued in a comparable 
market economy that is a significant producer of comparable 
merchandise. The sources of individual factor prices are discussed 
under the ``Normal Value'' section, below.
    No party in this investigation has requested a revocation of 
Russia's NME status. We have, therefore, preliminarily continued to 
treat Russia as an NME. However, we are currently evaluating Russia's 
NME status in another ongoing proceeding. See Notice of Initiation of 
Inquiry Into the Status of the Russian Federation as a Non-Market 
Economy Country Under the Antidumping and Countervailing Duty Laws, 66 
FR 54197 (October 26, 2001).

Separate Rates

    It is the Department's policy to assign all exporters of subject 
merchandise in an NME country a single rate unless an exporter can 
demonstrate that it is sufficiently independent so as to be entitled to 
a separate rate. Tagil has submitted separate-rates information in its 
section A responses, it has stated that there is no element of 
government ownership or control, and it has requested a separate, 
company-specific rate.
    The Department's separate-rate test is unconcerned, in general, 
with macroeconomic/border-type controls (e.g., export licenses, quotas, 
and minimum export prices), particularly if these controls are imposed 
to prevent dumping. The test focuses, rather, on controls over the 
investment, pricing, and output decision-making process at the 
individual firm level. See Certain Cut-to-Length Carbon Steel Plate 
from Ukraine: Final Determination of Sales at Less than Fair Value, 62 
FR 61754, 61757 (Nov. 19, 1997); Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 
61279 (Nov. 17, 1997); and Honey from the People's Republic of China: 
Preliminary Determination of Sales at Less than Fair Value, 60 FR 
14725, 14726 (Mar. 20, 1995).
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test arising out of the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991), as modified by 
Final Determination of Sales at Less Than Fair Value: Silicon Carbide 
from the People's Republic of China, 59 FR 22585 (May 2, 1994) (Silicon 
Carbide). Under the separate-rates criteria, the Department assigns 
separate rates in NME cases only if the NME respondents can demonstrate 
the absence of both de jure and de facto governmental control over 
export activities. See Silicon Carbide and Final Determination of Sales 
at Less Than Fair Value: Furfuryl Alcohol from the People's Republic of 
China, 60 FR 22545 (May 8, 1998).
1. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) any other 
formal measures by the government decentralizing control of companies.
    Tagil has placed on the record a number of documents to demonstrate 
absence of de jure control, including: 1) the Federal Law on Joint 
Stock Companies (Dec. 26, 1995); 2) the Federal Law No. 158-FZ (Sept. 
25, 1998); and 3) the Federal Act No. 3615-1 (October 9, 1992), 
``Currency control and supervision'' (as amended through May 31, 2001).
    In prior cases, the Department has analyzed these laws and found 
that they establish an absence of de jure control. See, e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products From the Russian Federation, 
64 FR 61261, 61268 (Nov. 10, 1999); see also Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Solid Fertilizer Grade 
Ammonium Nitrate From the Russian Federation, 65 FR 1139, 1142 (Jan. 7, 
2000). We have no new information in this proceeding which would cause 
us to reconsider this determination.
    According to Tagil, structural steel beam exports are not affected 
by export-licensing provisions or export quotas. Tagil claims to have 
autonomy in setting the contract prices for sales of pure magnesium 
through independent price negotiations with its foreign customers 
without interference from the Russian government. Based on the 
assertions of Tagil, we preliminarily determine that there is an 
absence of de jure government control over the pricing and marketing 
decisions of Tagil with respect to this company's structural steel beam 
export sales.
2. Absence of De Facto Control
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices

[[Page 67220]]

are set by, or subject to, the approval of a governmental authority; 
(2) whether the respondent has authority to negotiate and sign 
contracts, and other agreements; (3) whether the respondent has 
autonomy from the government in making decisions regarding the 
selection of its management; and (4) whether the respondent retains the 
proceeds of its export sales and makes independent decisions regarding 
disposition of profits or financing of losses.
    Tagil has asserted the following: (1) It establishes its own export 
prices; (2) it negotiates contracts without guidance from any 
governmental entities or organizations; (3) it makes its own personnel 
decisions; and (4) it retains the proceeds of its export sales and uses 
profits according to its business needs. Additionally, Tagil's 
questionnaire responses indicate that company-specific pricing during 
the POI does not suggest coordination among exporters. This information 
supports a preliminary finding that there is an absence of de facto 
governmental control of the export functions of these companies. 
Consequently, we preliminarily determine that Tagil has met the 
criteria for the application of separate rates.

Russia-Wide Rate

    In all NME cases, the Department implements a policy whereby there 
is a rebuttable presumption that all exporters or producers located in 
the NME comprise a single exporter under common government control, the 
``NME entity.'' The Department assigns a single NME rate to the NME 
entity unless an exporter can demonstrate eligibility for a separate 
rate.
    Tagil has preliminarily qualified for a separate rate. Furthermore, 
the information on the record of this investigation indicates that 
Tagil is the only Russian producer and/or exporter of the subject 
merchandise with sales or shipments to the United States during the 
POI. Based upon our examination and clarification of Customs data, we 
have determined that there are no other Russian producers and/or 
exporters of the subject merchandise and consequently none which were 
required to respond to our questionnaire. Because Tagil, the only known 
Russian producer of steel beams, responded to our questionnaire and the 
evidence indicates that there are no other Russian producers or 
exporters of subject merchandise during the POI, we have calculated a 
Russia-wide rate for this investigation based on the weighted-average 
margin we determined for Tagil. This Russia-wide rate applies to all 
entries of subject merchandise except for entries of subject 
merchandise exported by Tagil.

Fair Value Comparisons

    To determine whether sales of structural steel beams from the 
Russian Federation to the United States were made at less than fair 
value (``LTFV''), we compared the constructed export price (``CEP'') to 
the NV calculated using an NME analysis, as described below. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI-
wide weighted-average CEPs to weighted-average NV.
    In accordance with section 772(b) of the Act, we calculated CEP for 
those sales where the merchandise was sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter, or by a seller affiliated with the 
producer or exporter, to a purchaser not affiliated with the producer 
or exporter.
    In this case, we based CEP on the packed ex-warehouse, or delivered 
prices to unaffiliated purchasers in the United States. Where 
appropriate, we made adjustments for price-billing errors. We made 
deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included, where appropriate, ocean 
freight, marine insurance, U.S. brokerage and handling, international 
freight, U.S. customs duties (including harbor maintenance fees and 
merchandise processing fees), U.S. inland insurance, U.S. inland 
freight expenses (i.e., freight from port to warehouse and freight from 
warehouse to the customer), truck loading expenses, U.S. barging 
expenses, and post-sale warehousing expenses. In accordance with 
section 772(d)(1) of the Act and 19 CFR 351.402(b), we deducted those 
selling expenses associated with economic activities occurring in the 
United States, including direct selling expenses (imputed credit 
costs), and indirect selling expenses (including inventory carrying 
costs).
    In addition, pursuant to section 772(d)(3) of the Act, we further 
reduced the starting price by an amount for profit to arrive at CEP. We 
calculated the CEP-profit ratio for Tagil using the financial data 
reflected on the income statement of a Turkish producer of steel. For 
further discussion of the financial statements of this surrogate 
producer, see the ``Normal Value'' section of this notice below.

Normal Value

1. Surrogate Country

    Section 773(c)(4) of the Act requires the Department to value the 
NME producer's factors of production, to the extent possible, in one or 
more market-economy countries that: (1) Are at a level of economic 
development comparable to that of the NME country, and (2) are 
significant producers of comparable merchandise. The Department has 
determined that Poland, Venezuela, South Africa, Turkey, Colombia, and 
Tunisia are countries comparable to Russia in terms of overall economic 
development. See the August 9, 2001, memorandum from Jeffrey May, 
Director, Office of Policy to Laurie Parkhill, Office Director, Group 
1, Office 3 (Policy Memorandum).
    According to the available information on the record, we have 
determined that South Africa meets the statutory requirements for an 
appropriate surrogate country for Russia. For purposes of the 
preliminary determination, we have selected, except where noted, South 
Africa as the surrogate country, based on the quality and 
contemporaneity of the currently available data. Accordingly, we have 
calculated NV using South African values for the Russian producer's 
factors of production. We have obtained and relied upon publicly 
available information wherever possible.

2. Factors of Production

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by Tagil for the POI. To 
calculate NV, the reported per-unit factor quantities were multiplied 
by publicly available South African surrogate values.
    For purposes of calculating NV, we valued Russian factors of 
production, in accordance with section 773(c)(1) of the Act. Factors of 
production include, but are not limited to: (1) Hours of labor 
required; (2) quantities of raw materials employed; (3) amounts of 
energy and other utilities consumed; and (4) representative capital 
cost, including depreciation. In examining surrogate values, we 
selected, where possible, the publicly available value which was: (1) 
An average non-export value; (2) representative of a range of prices 
within the POI or most contemporaneous with the POI; (3) product-
specific; and (4) tax-exclusive. For a more detailed explanation of the 
methodology used in calculating various surrogate values, see the 
``Preliminary Determination Factors Valuation Memorandum from senior 
analyst to the File,'' dated December 19, 2001. In

[[Page 67221]]

accordance with this methodology, we valued the factors of production 
as follows.
    In selecting the surrogate values, we considered the availability, 
quality, specificity, and contemporaneity of the data. As appropriate, 
we adjusted input prices by including freight costs to make them 
delivered prices. We added to South African surrogate values a 
surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory or the distance from the nearest 
seaport to the factory. This adjustment is in accordance with the Court 
of Appeals for the Federal Circuit's decision in Sigma Corporation v. 
United States, 117 F. 3d 1401, 1407-08 (Fed. Cir. 1997). Where a 
producer did not report the distance between the material supplier and 
the factory, we used as facts available the longest distance reported 
(i.e., the distance between the Russian seaport and the producer's 
location). To value rail freight rates, we used a rate for aluminum 
slabs or ingots provided by Spoornet, a South African rail company. As 
we were unable to identify a surrogate value for freight by truck, we 
valued trucking freight expenses using the surrogate value for rail 
freight. For those values not contemporaneous with the POI, we adjusted 
for inflation using producer price indices or wholesale price indices 
published in the International Monetary Fund's International Financial 
Statistics.
    We valued the following inputs using the Commodity Trade Statistics 
Section of the United Nation's Harmonized System import data for South 
Africa: lime/limestone, iron from ore, iron pellets, coal, 
ferromanganese, and silicomanganese.
    We valued the following inputs using the official South African 
import statistics obtained from the Trade Statistics data service: 
ferrosilicon, aluminum, magnesium powder, and silicocalcium.
    We valued scrap using information based on import data from the 
World Trade Atlas.
    In its October 9, 2001, submission, the respondent calculated a 
scrap value of $33.00 per metric ton based on imports of this input 
into South Africa. In its October 9, 2001, submission, the petitioners 
based scrap-value information on exports of steel scrap from South 
Africa to various market-economy countries.
    The petitioners argue in their November 14, 2001, submission that 
the Department should refrain from using the respondent's scrap value 
because the per-unit value for scrap is aberrational. According to the 
petitioners, the figure used by the respondent represents only 1,525 
metric tons of imports, which the petitioners argue is an extremely low 
volume of steel. See petitioners' November 14, 2001, submission at page 
2. In contrast, the respondent argues in its October 19, 2001, 
submission that the Department's practice is to refrain from using 
export statistics as a basis for calculating surrogate values when 
other data are available.
    We agree with the petitioners that the respondent's scrap value is 
aberrational because of the extreme low volume of steel imports to 
South Africa. We also agree with the respondent that our practice is to 
refrain from using export statistics as a basis for calculating 
surrogate values when other data are available. Therefore, because we 
cannot base the scrap value on imports of steel scrap to South Africa, 
we have determined that it is appropriate to seek information from 
other steel-producing countries. Specifically, we attempted to seek 
scrap-value information from the surrogate countries listed in the 
August 9, 2001, Policy Memorandum.
    We examined whether countries listed on the Policy Memorandum such 
as Poland, Venezuela, Turkey, Colombia, and Tunisia produced structural 
steel beams. Based on the Iron and Steel Works of the World, 13th 
Edition, we found that Poland is the only country that produces steel 
beams. Therefore, we attempted to seek scrap-value information based on 
imports from this country. We were able to find scrap-value information 
based on imports from Poland. Specifically, we used data from the World 
Trade Atlas to value scrap. Therefore, because Poland is a market 
economy and is currently at a level of economic development comparable 
to Russia as demonstrated by its gross national product, we valued 
scrap using import statistics from Poland.
    We valued both natural gas and heavy oil using data from the 
International Energy Agency. We valued electricity using the POI 
electricity rate charged to large industrial users by Eskom, a South 
African electric utility company.
    We valued packing costs using the packing-cost factor presented by 
Highveld Steel and Vanadium Corporation Ltd. (``Highveld Steel'') in 
case A-791-811 in the September 12, 2001, public-version submission at 
exhibit B-3. Although this value is a ranged value, we find that it is 
the most indicative factor for packing expenses because Highveld Steel 
is the sole producer of steel beams in South Africa.
    The packing-cost factor includes materials, labor, and transport 
services. Therefore, we did not use any packing material and packing 
labor amounts submitted by the respondent in our packing-cost 
calculation.
    We valued labor based on a regression-based wage rate in accordance 
with 19 CFR 351.408(c)(3).
    Based on the information submitted by Tagil, we have determined 
that slag, small coke, waste, and vanadium are by-products. Because 
they are by-products, we subtracted the sales revenue of slag, coke by-
product, waste, and vanadium from the estimated production costs of 
structural steel beams. This treatment of by-products is consistent 
with generally accepted accounting principles. See Cost Accounting: A 
Managerial Emphasis (1991) at pages 539-544. We used a South African 
price quote to value slag, waste, and vanadium and the United Nation's 
Harmonized System data to value coke by-product.
    With respect to the valuation of factory overhead, selling, general 
and administrative expenses (``SG&A''), and profit, we considered the 
information on the record submitted by both the petitioners and the 
respondent for this purpose.
    In its October 9, 2001, submission, the petitioners provided a copy 
of the 2000 annual financial statement of Anglo American plc, the 
parent company of Highveld Steel, the only South African producer of 
structural steel beams. In its October 9, 2001, submission, the 
respondent provided a copy of the 2000 Annual Report of Highveld Steel.
    In its October 19, 2001, submission, the respondent argues that the 
consolidated financial statements of Anglo American should not be used 
because they do not provide a reasonable basis for evaluating the 
experience of South African steel beams producers. According to the 
respondent, there are too many industries included within the Anglo 
American financial statements. Therefore, for these reasons, the 
respondent argues that the data in Anglo American's financial 
statements do not provide an appropriate basis to calculate surrogate 
ratios for overhead, SG&A, and profit as a reasonable estimate of the 
steel beam industry in South Africa.
    In its November 14, 2001, submission, the petitioners argue that 
Highveld Steel's financial statement is not a suitable basis for 
calculating factory overhead, SG&A, and profit ratios because it does 
not separately identify all SG&A expenses from its cost of sales. 
According to the petitioners, the inability to separate out SG&A items 
from employees' remuneration and other cost of sales renders Highveld 
Steel's financial statement unusable for

[[Page 67222]]

purposes of calculating an SG&A ratio. Therefore, for these reasons, 
the petitioners argue that the Department should rely on Highveld 
Steel's parent company's financial statements as the basis for 
calculating factory overhead, SG&A, and profit ratios.
    We agree with the respondent that the Anglo American financial 
statements would not provide a reasonable basis for calculating 
overhead, SG&A, and profit ratios because the data includes information 
from businesses and industries dissimilar to the experience of a South 
African steel beams producer. We also agree with the petitioners that 
we cannot rely on Highveld Steel's financial statements because it is 
unclear which elements of Highveld Steel's financial statement 
constitute SG&A costs. Therefore, since Highveld Steel is the only 
steel beam producer in South Africa, we have determined that it is 
appropriate to seek information from other steel-producing countries. 
Specifically, we attempted to seek financial information from the 
surrogate countries listed in the Policy Memorandum.
    We examined whether countries listed in the memorandum such as 
Poland, Turkey, Venezuela, Colombia, and Tunisia produced structural 
steel beams. Based on the Iron and Steel Works of the World, 13th 
Edition, we found that Poland is the only country that produces steel 
beams. Specifically, we found that Huta Katowice SA is a steel beams 
producer in Poland. Therefore, we attempted to seek financial 
information from this company. We were unsuccessful, however, in 
finding any financial information from this company that would provide 
an appropriate basis for calculating factory overhead, SG&A, and profit 
ratios. Because we could not find any financial information concerning 
production in South Africa or Poland, we have determined that it is 
appropriate to seek financial information from a steel producer (a non-
steel beams producer) in South Africa. Based on the Iron and Steel 
Works of the World, 13th Edition, we found that there are several steel 
producers in South Africa. We attempted to seek financial information 
from these steel companies and were unsuccessful in finding any 
financial information. We then examined whether we could find financial 
information from steel-producing companies in Poland. We were 
unsuccessful in finding any financial information from steel producing 
companies in Poland.
    We then examined whether we could find financial information from 
steel-producing companies in Turkey that would provide the most 
appropriate base for valuing factory overhead, SG&A, and profit ratios. 
Based on the Notice of Preliminary Determination of Sales at Less Than 
Fair Value: Hot-Rolled, Flat-Rolled, Carbon-Quality Steel Products From 
the Russian Federation, 64 FR 9312-9318 (February 25, 1999) (Hot-
Rolled), we found that, in that case, to value overhead, SG&A expenses, 
and profit ratios, we used public information reported in the 1997 
financial statements of Eregli Demir ve Celik Fabrikalari TAS 
(``Erdemir''), a Turkish steel producer. Because Turkey is currently at 
a level of economic development comparable to the Russian Federation as 
demonstrated by its per-capita GNP and its national distribution of 
labor, we find it appropriate to use Turkey as a surrogate country to 
value factory overhead, SG&A, and profit. See Policy Memorandum. 
Therefore, for purposes of this preliminary determination, we have used 
this company's financial statements to calculate the factory overhead, 
SG&A, and profit ratios. However, we welcome interested parties to 
comment on our determination to use Turkey as a surrogate country and 
Erdemir's fiscal 1997 financial statements as the basis for calculating 
factory overhead, SG&A, and profit.

Currency Conversions

    We made currency conversions, in accordance with section 773A(a) 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.

Verification

    As provided in section 782(i) of the Act, we intend to 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 CEP, as indicated in the chart 
below. The suspension-of-liquidation instruction will remain in effect 
until further notice. The weighted-average dumping margin is as 
follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
Tagil......................................................       165.00
Russia-Wide Rate...........................................       165.00
------------------------------------------------------------------------

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 seven days after the date of the final 
verification report issued in this proceeding. Rebuttal briefs must be 
filed five days from the deadline date for case briefs. 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 two days after the rebuttal brief deadline date 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.

[[Page 67223]]

    We will make our final determination 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: December 19, 2001.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-31989 Filed 12-27-01; 8:45 am]
BILLING CODE 3510-DS-P