[Federal Register Volume 67, Number 15 (Wednesday, January 23, 2002)]
[Notices]
[Pages 3159-3163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1657]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-428-830]


Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Bar From Germany

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

ACTION: Notice of Final Determination of Sales at Less Than Fair Value.

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SUMMARY: The Department of Commerce is conducting an antidumping duty 
investigation of stainless steel bar from Germany. We determine that 
stainless steel bar from Germany is being, or is likely to be, sold in 
the United States at less than fair value, as provided in section 
735(a) of the Tariff Act of 1930, as amended. On August 2, 2001, the 
Department of Commerce published its preliminary determination of sales 
at less than fair value of stainless steel bar from Germany. Based on 
the results of verification and our analysis of the comments received, 
we have made changes in the margin calculations. Therefore, this final 
determination differs from the preliminary determination. The final 
weighted-average dumping margins are listed below in the section 
entitled ``Continuation of Suspension of Liquidation.''

EFFECTIVE DATE: January 23, 2002.

FOR FURTHER INFORMATION CONTACT: Craig Matney, Andrew Covington or Meg 
Weems, Import Administration,

[[Page 3160]]

International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-1778, (202) 482-3534, or (202) 482-2613, respectively.

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 of Commerce 
(``Department'') regulations are to 19 CFR part 351 (April 2000).

Case History

    Since the publication of the preliminary determination in this 
investigation (see Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Stainless 
Steel Bar From Germany, 66 FR 40214 (August 2, 2001) (``Preliminary 
Determination'')), the following events have occurred:
    In August through September 2001, we conducted verifications of the 
questionnaire responses submitted by Edelstahl Witten-Krefeld GmbH, 
(``EWK''), Krupp Edelstahlprofile (``KEP''), BGH Edelstahl Seigen GmbH 
and BGH Edelstahl Freital GmbH (``BGH''), and Walzwerke Einsal GmbH 
(``Einsal'') (collectively, ``the respondents''). We issued 
verification reports in October and November 2001. See ``Verification'' 
section of this notice for further discussion.
    The petitioners and respondents filed case and rebuttal briefs, 
respectively, on November 27 and December 3, 2001. No public hearing 
was held because the only written request received (from the 
petitioners) was withdrawn.
    Although the deadline for this determination was originally 
December 17, 2001, in order to accommodate certain verifications that 
were delayed because of the events of September 11, 2001, the 
Department tolled the final determination deadline in this and the 
concurrent stainless steel bar investigations until January 15, 2002.

Scope of Investigation

    For purposes of this investigation, the term ``stainless steel 
bar'' includes articles of stainless steel in straight lengths that 
have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or 
otherwise cold-finished, or ground, having a uniform solid cross 
section along their whole length in the shape of circles, segments of 
circles, ovals, rectangles (including squares), triangles, hexagons, 
octagons, or other convex polygons. Stainless steel bar includes cold-
finished stainless steel bars that are turned or ground in straight 
lengths, whether produced from hot-rolled bar or from straightened and 
cut rod or wire, and reinforcing bars that have indentations, ribs, 
grooves, or other deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), products that have been cut from stainless 
steel sheet, strip or plate, wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The stainless steel bar subject to this investigation is currently 
classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 
7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 
7222.20.00.75, and 7222.30.00.00 of the Harmonized Tariff Schedule of 
the United States (``HTSUS''). Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the scope of this investigation is dispositive.
    Prior to the preliminary determination in this investigation, the 
respondents in this and the companion SSB investigations filed comments 
seeking to exclude certain products from the scope of these 
investigations. The specific products identified in their exclusion 
requests were: stainless steel tool steel, welding wire, special-
quality oil field equipment steel (SQOFES), and special profile wire.
    In the preliminary determinations, we concluded that all of these 
products, except for special profile wire, are within the scope of 
these investigations. Specifically, regarding stainless steel tool 
steel, welding wire, and SQOFES, after considering the respondents' 
comments and the petitioners' objections to the exclusion requests, we 
preliminarily determined that the scope is not overly broad. Therefore, 
stainless steel tool steel, welding wire, and SQOFES are within the 
scope of these SSB investigations. In addition, we preliminarily 
determined that SQOFES does not constitute a separate class or kind of 
merchandise from SSB. Regarding special profile wire, we preliminarily 
determined that this product does not fall within the scope as it is 
written because its cross section is in the shape of a concave polygon. 
Therefore, we did not include special profile wire in these 
investigations. For details, see the Memorandum to Susan Kuhbach and 
Louis Apple from the Stainless Steel Bar Team, dated July 26, 2001, 
entitled ``Scope Exclusion Requests,'' and the Memorandum to Louis 
Apple from the Stainless Steel Bar Team, dated July 26, 2001, entitled 
``Whether Special Profile Wire Product is Included in the Scope of the 
Investigation.''
    Finally, we note that in the concurrent countervailing duty 
investigation of stainless steel bar from Italy, the Department 
preliminarily determined that hot-rolled stainless steel bar is within 
the scope of these investigations. See Preliminary Affirmative 
Countervailing Duty Determination and Alignment of Final Countervailing 
Duty Determination with Final Antidumping Duty Determination: Stainless 
Steel Bar from Italy, 66 FR 30414 (June 6, 2001).
    With the exception of BGH which filed comments on the Department's 
preliminary scope decision with respect to SQOFES, and with which the 
Department disagrees and has addressed in the January 15, 2002 Issues 
and Decision Memorandum for the Antidumping Duty Investigation of 
Stainless Steel Bar from Germany; Final Determination (``Decision 
Memorandum''), no other parties filed comments on our preliminary scope 
decisions. Furthermore, no additional information has otherwise come to 
our attention to warrant a change in our preliminary decisions. 
Therefore, we have made no changes for purposes of the final 
determinations.

Period of Investigation

    The period of investigation (``POI'') for this investigation is 
October 1, 1999, through September 30, 2000.

Fair Value Comparisons

    To determine whether sales of stainless steel bar from Germany to 
the United States were made at less than fair value, we compared export 
price (``EP'') or constructed export price (``CEP'') to normal value 
(``NV''). Our calculations followed the methodologies described in the 
Preliminary Determination, except as noted below and in each individual 
respondent's calculation memorandum, January 15, 2002, which is on file 
in the Import Administration's Central Records Unit

[[Page 3161]]

(``CRU''), Room B-099 of the main Department of Commerce building.

Export Price and Constructed Export Price

    For certain sales to the United States, we used EP as defined in 
section 772(a) of the Act. For the remaining sales to the United 
States, we used CEP as defined in section 772(b) of the Act. We 
calculated EP and CEP based on the same methodologies described in the 
Preliminary Determination, with the following exceptions:

EWK

    We revised the reported amounts for certain sales for billing 
adjustments, early payment discounts, U.S. and domestic inland freight, 
international freight, U.S. brokerage and handling, transportation 
insurance, imputed credit, indirect selling expenses, inventory 
carrying costs, based on verification findings. For further 
information, see January 15, 2002 EWK Calculation Memorandum and 
Comments 20, 21, 22, 23, 24, 25 and 26 in the Decision Memorandum.

KEP

    We revised the reported amounts for certain sales for domestic 
inland freight, international freight, imputed credit, early payment 
discounts, brokerage and handling, and warranty expenses based on 
verification findings. For further information, see January 15, 2002 
KEP Calculation Memorandum and Comments 39 and 40 in the Decision 
Memorandum.

Einsal

    We based date of sale on sale invoice date. We revised Einsal's 
reported domestic inventory carrying costs using the DM short-term 
interest rate. For further information, see Einsal's January 15, 2002 
Calculation Memorandum.

Normal Value

    We used the same methodology as that described in the Preliminary 
Determination to determine the cost of production (``COP''), whether 
comparison market sales were at prices below the COP, and the NV, with 
the following exceptions:

1. Cost of Production Analysis

EWK
    We adjusted EWK's reported cost of manufacture (``COM'') to reflect 
the market price of EWK's steel scrap purchased from an affiliate. We 
also adjusted EWK's reported general and administrative (``G&A'') 
expense based on the information obtained during the cost verification. 
Lastly, we adjusted EWK's reported financial expense factor to exclude 
the claimed financial expense offset, and to include an estimated 
amount of interest income that EWK's parent company would have earned 
from short-term sources. See Memorandum to Neal Halper, Director, 
Office of Accounting, from Sheikh M. Hannan, dated January 15, 2002, 
Cost of Production and Constructed Value Calculation Adjustments for 
the Final Determination and Comments 18, 27 and 29 of the Decision 
Memorandum.
KEP
    We adjusted KEP's reported cost of manufacture to reflect the cost 
of production of one of KEP's inputs purchased from an affiliate and we 
adjusted the COM of each of KEP's products due to the understatement of 
the cost of manufacturing. We also adjusted the denominator of the G&A 
expense ratio as a result of the increased cost of manufacture. 
Finally, we adjusted KEP's reported financial expense factor to exclude 
the claimed financial expense offset, and to include an estimated 
amount of interest income that KEP's parent company would have earned 
from short-term sources. For further information, see Memorandum to 
Neal Halper, Director, Office of Accounting, from Laurens van Houten, 
dated January 15, 2002, Cost of Production and Constructed Value 
Calculation Adjustments for the Final Determination, and Comments 18 
and 36 of the Decision Memorandum.
BGH
    We adjusted BGH's reported direct materials, direct labor, variable 
overhead, fixed overhead and general and administrative expenses for 
errors discovered during verification (see, Memorandum to Neal Halper, 
Director Office of Accounting, from LaVonne Jackson, dated October 26, 
2001, Verification Report on the Cost of Production and Constructed 
Value Data Submitted by BGH Freital, Section I). We also adjusted BGH's 
reported unconsolidated financial expense ratio to reflect BGH's 
consolidated financial expenses and cost of production. See Memorandum 
to Neal Halper, Director, Office of Accounting, from LaVonne Jackson, 
dated January 15, 2002, Cost of Production and Constructed Value 
Calculation Adjustments for the Final Determination.
Einsal
    We increased Einsal's interest expense ratio to account for an end 
of the year audit accrual that was not captured in the original 
interest expense calculation. We also revised the total COM for one of 
Einsal's reported control numbers based on findings at verification. 
For further information, see January 15, 2002 Einsal Calculation 
Memorandum.

2. Calculation of NV

EWK
    For certain sales, we revised EWK's reported transportation 
insurance, billing adjustments, early payment discounts, inventory 
carrying costs and imputed credit. For further information, see January 
15, 2002 EWK Calculation Memorandum.
KEP
    For certain sales, we revised KEP's reported product matching 
characteristics, manufacturer code, domestic inland freight, early 
payment discounts, warranty expenses, interest revenue, warehousing 
expenses, and other direct selling expenses. For further information, 
see January 15, 2002 KEP Calculation Memorandum and Comments 30, 31, 
34, and 38 in the Decision Memorandum.
BGH
    We found three distinct levels of trade in the home market. See 
January 15, 2002 BGH Calculation Memorandum and Comment 3 in the 
Decision Memorandum. We corrected a programming error in the 
preliminary calculations to grant BGH a level of trade adjustment. For 
further information, see January 15, 2002 BGH Calculation Memorandum.
Einsal
    We found two distinct levels of trade in the home market. We based 
date of sale on sale invoice date. We revised Einsal's inventory 
carrying expenses and credit expenses using the correct DM short-term 
interest rate. Based on verification findings, we are no longer using 
the exchange rates based on Einsal's currency transactions in forward 
markets. For further information, see January 15, 2002 Einsal 
Calculation Memorandum and Comment 12 in the Decision Memorandum.

Currency Conversions

    We made currency conversions in accordance with section 773A of the 
Act in the same manner as in the Preliminary Determination, except as 
discussed above with respect to Einsal.

Verification

    In this investigation, and in the companion SSB investigations from 
Italy, France, the United Kingdom and Korea, verifications were 
scheduled for

[[Page 3162]]

all responding companies during the period August through October 2001. 
Based on the security concerns and logistical difficulties brought 
about by the tragic events of September 11, for some companies in these 
countries we were unable to complete our verifications as scheduled. 
However, for these companies, we did verify major portions of the 
company's questionnaire responses.
    While the statute at 782(i)(1) and the Department's regulations at 
351.307(b)(1)(i) direct the Department to verify all information relied 
upon in a final determination of an investigation, the Department's 
verification process is akin to an ``audit,'' and the Department has 
the discretion to determine the specific information it will examine in 
its audits. See PMC Specialties Group, Inc. v. United States, 20 C.I.T. 
1130 (1996). The courts concur that verification is a spot check and is 
not intended to be an exhaustive examination of the respondent's 
records. See Mansato v. United States, 698 F.Supp. 275, 281 (CIT 1988). 
Furthermore, the courts have noted that Congress has given Commerce 
wide latitude in formulating its verification procedures. See Micron 
Tech., Inc. v. United States, 117 F.3d 1386, 1396 (CAFC 1997).
    In these investigations, we believe that we have met the standard 
for having verified the information being used in this final 
determination, despite our inability to complete the verifications as 
originally scheduled. Although the amount of information verified was 
less than planned, the respondents did not control what was verified 
and what was not verified. It was the Department, not the companies, 
that established the original verification schedule and determined the 
order in which the segments would be verified. Moreover, each company 
was fully prepared to proceed with each segment of the original 
verification based upon the Department's schedule and could not have 
anticipated that the Department would perhaps not actually verify all 
segments. Finally, we note that all responding companies and the 
petitioners fully cooperated with the Department's post-September 11 
efforts to conduct as many segments of verification as practicable.
    Based on the information verified, we are relying on the responses 
as submitted, subject to the minor corrections previously noted 
elsewhere in this notice and the Decision Memorandum.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the Decision Memorandum, which is 
hereby adopted and incorporated by reference into this notice. Attached 
to this notice as an appendix is a list of the issues which parties 
have raised and to which we have responded in the Decision Memorandum. 
Parties can find a complete discussion of all issues raised in this 
investigation and the corresponding recommendations in this public 
memorandum which is on file in the Department's CRU. In addition, a 
complete version of the Decision Memorandum can be accessed directly on 
the Web at http://ia.ita.doc.gov/frn/frnhome.htm. The paper copy and 
electronic version of the Decision Memorandum are identical in content.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing the U.S. Customs Service (``Customs'') to continue to suspend 
liquidation of all imports of stainless steel bar from Germany that are 
entered, or withdrawn from warehouse, for consumption on or after 
August 2, 2001, the date of publication of the Preliminary 
Determination in the Federal Register. Customs shall continue to 
require a cash deposit or the posting of a bond equal to the weighted-
average amount by which the NV exceeds the EP or CEP, as appropriate, 
as indicated in the chart below. These suspension of liquidation 
instructions will remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
BGH........................................................        16.62
Einsal.....................................................         4.31
EWK........................................................        15.54
KEP........................................................        32.24
All Others.................................................        17.77
------------------------------------------------------------------------

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (``ITC'') of our determination. As our 
final determination is affirmative, the ITC will, within 45 days, 
determine whether these imports are materially injuring, or threaten 
material injury to, the U.S. industry. If the ITC determines that 
material injury, or threat of material injury does not exist, the 
proceeding will be terminated and all securities posted will be 
refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping duty order.
    This notice also serves as a reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305. Timely notification of return or 
destruction of APO materials, or conversion to judicial protective 
order, is hereby requested. Failure to comply with the regulations and 
the terms of an APO is a sanctionable violation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: January 15, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Appendix

List of Comments in the Issues and Decision Memorandum

BGH

    Comment 1: Quantity Differences in Fair Market Value 
Determination.
    Comment 2: Methodology for Price Comparisons.
    Comment 3: Level of Trade.
    Comment 4: Final Finishing.
    Comment 5: Treatment of Sales Above Normal Value.
    Comment 6: Level of Trade Adjustment.
    Comment 7: Special-Quality Oil Field Equipment Steel.
    Comment 8: Commission Paid to BGH's U.S. Affiliate.
    Comment 9: Products Sold But Not Produced During the POI.
    Comment 10: Affiliated Party Input Methodology.
    Comment 11: Verification Errors.

Einsal

    Comment 12: Level of Trade.
    Comment 13: Products Sold But Not Produced During the POI.
    Comment 14: Minor Changes and Revisions Resulting from 
Verification.

EWK and KEP

    Comment 15: Collapsing of EWK and KEP.
    Comment 16: Collapsing Methodology.
    Comment 17: EWK and KEP LOT Issues.
    Comment 18: Net Financial Expense Ratio Calculation.

EWK

    Comment 19: Use of Supplied Cost Data for Certain EWK Tool Steel 
Sales.
    Comment 20: Missing Foreign Inland Freight on EWK's CEP sales.
    Comment 21: Incomplete Foreign Inland Freight on EWK's EP sales.
    Comment 22: EWK Failure to Report U.S. Handling Expenses for 
Certain CEP Sales.

[[Page 3163]]

    Comment 23: Understatement of EWK's International Freight on 
Tool Steel Sales.
    Comment 24: Adjustment of Reported U.S. Inland Freight.
    Comment 25: Correction of Domestic Indirect Selling Expenses for 
U.S. and Home Market Sales.
    Comment 26: Deducting Domestic Indirect Selling Expenses from 
CEP sales.
    Comment 27: EWK's Affiliated Party Purchases.
    Comment 28: Costs for Products Not Produced by EWK.
    Comment 29: G&A Ratio Calculation

KEP

    Comment 30: Allocation of KEP's Home Market Warehousing 
Expenses.
    Comment 31: Planned versus Actual Warehousing Expenses.
    Comment 32: Use of Certain KEP Home Market Sales.
    Comment 33: Matching Hierarchy and LOT.
    Comment 34: KEP's Inland Freight Values.
    Comment 35: KEP's Affiliated Party Purchases.
    Comment 36: KEP's Cost of Manufacturing.
    Comment 37: KEP's Reported Testing Surcharges.
    Comment 38: KEP's Reported Home-Market Discounts, Warranty 
Expenses, and Interest Revenue.
    Comment 39: Understatement of U.S. Brokerage Charges.
    Comment 40: Use of Correct U.S. Dollar Interest Rate.

[FR Doc. 02-1657 Filed 1-22-02; 8:45 am]
BILLING CODE 3510-DS-P