[Federal Register Volume 67, Number 69 (Wednesday, April 10, 2002)]
[Notices]
[Pages 17397-17401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8706]



[[Page 17397]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-830]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Carbon and Certain Alloy Steel Wire Rod from Mexico

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

EFFECTIVE DATE: April 10, 2002.

FOR FURTHER INFORMATION CONTACT: Marin Weaver or Charles Riggle at 
(202) 482-2336 or (202) 482 - 0650, respectively; AD/CVD Enforcement 
Group II Office 5, Import Administration, Room 1870, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulation

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

Preliminary Determination

    We preliminarily determine that carbon and certain alloy steel wire 
rod (steel wire rod) from Mexico is being sold, or is likely to be 
sold, in the United States at less than fair value (LTFV), as provided 
in section 733 of the Act. The estimated margins of sales at LTFV are 
shown in the Suspension of Liquidation section of this notice.

Case History

    This investigation was initiated on September 24, 2001.\1\ See 
Initiation of Antidumping Duty Investigations: Carbon and Certain Alloy 
Steel Wire Rod From Brazil, Canada, Egypt, Germany, Indonesia, Mexico, 
Moldova, South Africa, Trinidad and Tobago, Ukraine, and Venezuela, 66 
FR 50164 (October 2, 2001) (Initiation Notice). Since the initiation of 
these investigations, the following events have occurred:
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    \1\ The petitioners in this investigation are Co-Steel Raritan, 
Inc., GS Industries, Inc., Keystone Consolidated Industries, Inc., 
and North Star Steel Texas, Inc.
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    On October 12, 2001, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that the domestic industry producing steel wire rod is 
materially injured by reason of imports from Brazil, Canada, Germany, 
Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine of carbon 
and certain alloy steel wire rod.\2\ See Determinations and Views of 
the Commission, USITC Publication No. 3456, October 2001.
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    \2\ With respect to imports from Egypt, South Africa, and 
Venezuela, the ITC determined that imports from these countries 
during the period of investigation (POI) were negligible and, 
therefore, these investigations were terminated.
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    The Department issued a letter on October 16, 2001, to interested 
parties in all of the concurrent steel wire rod antidumping 
investigations, providing an opportunity to comment on the Department's 
proposed model match characteristics and hierarchy. The petitioners 
submitted comments on October 24, 2001. The Department also received 
comments on model matching from Hysla S.A. de C.V. (Mexico), Ivaco, 
Inc,. and Ispat Sidbec Inc. (Canada). These comments were taken into 
consideration by the Department in developing the model matching 
characteristics and hierarchy for all of the steel wire rod antidumping 
investigations.
    On November 7, 2001, the Department issued an antidumping 
questionnaire to Siderurgica Lazaro Cardenas Las Truchas S.A. 
(SICARTSA).\3\ On December 5, 2001 the petitioners alleged that there 
that there was a reasonable basis to believe or suspect that critical 
circumstances exist with respect to imports of steel wire rod from 
Brazil, Germany, Mexico, Moldova, Turkey, and Ukraine.
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    \3\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales or, if the home 
market is not viable, of sales in the most appropriate third-country 
market. Section C requests a complete listing of U.S. sales. Section 
D requests information on the cost of production (COP) of the 
foreign like product and the constructed value (CV) of the 
merchandise under investigation. Section E requests information on 
further manufacturing.
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    On January 17, 2002, the petitioners requested a 30-day 
postponement of the preliminary determination in this investigation. On 
January 28, 2002, the Department published a Federal Register notice 
postponing the deadline for the preliminary determination until March 
13, 2002. See Notice of Postponement of Preliminary Antidumping Duty 
Determinations: Carbon and Certain Alloy Steel Wire Rod From Brazil, 
Canada, Indonesia, Germany, Mexico, Moldova, Trinidad and Tobago, and 
Ukraine, 67 FR 3877 (January 28, 2002). On March 4, 2002, the 
petitioners requested an additional 20-day postponement of the 
preliminary determination in this investigation. On March 15, 2002, the 
Department published a Federal Register notice postponing the deadline 
for the preliminary determinations until April 2, 2002. See Notice of 
Postponement of Preliminary Antidumping Duty Determinations: Carbon and 
Certain Alloy Steel Wire Rod From Brazil, Canada, Indonesia, Germany, 
Mexico, Moldova, Trinidad and Tobago, and Ukraine, 67 FR 11674 (March 
15, 2002).
    On February 4, 2002, the Department preliminarily determined that 
critical circumstances exist with respect to imports of carbon and 
alloy steel wire rod from Mexico. See Memorandum to Faryar Shirzad Re: 
Antidumping Duty Investigation Carbon and Alloy Steel Wire Rod From 
Mexico and Trinidad and Tobago -- Notice of Preliminary Determinations 
of Critical Circumstances (February 4, 2002); see also Carbon and Alloy 
Steel Wire Rod From Germany, Mexico, Moldova, Trinidad and Tobago, and 
Ukraine: Notice of Preliminary Determination of Critical Circumstances, 
67 FR 6224 (February 11, 2002).

Period of Investigation

    The POI is July 1, 2000, through June 30, 2001. This period 
corresponds to the four most recently completed fiscal quarters prior 
to the month of the filing of the petition (i.e., August 2001).

Scope of Investigations

    The merchandise covered by these investigations is certain hot-
rolled products of carbon steel and alloy steel, in coils, of 
approximately round cross section, 5.00 mm or more, but less than 19.00 
mm, in solid cross-sectional diameter.
    Specifically excluded are steel products possessing the above-noted 
physical characteristics and meeting the Harmonized Tariff Schedule of 
the United States (HTSUS) definitions for (a) stainless steel; (b) tool 
steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete 
reinforcing bars and rods. Also excluded are (f) free machining steel 
products (i.e., products that contain by weight one or more of the 
following elements: 0.03 percent or more of lead, 0.05 percent or more 
of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of 
phosphorus, more than 0.05 percent of selenium, or more than 0.01 
percent of tellurium).

[[Page 17398]]

    Also excluded from the scope are 1080 grade tire cord quality wire 
rod and 1080 grade tire bead quality wire rod. This grade 1080 tire 
cord quality rod is defined as: (i) grade 1080 tire cord quality wire 
rod measuring 5.0 mm or more but not more than 6.0 mm in cross-
sectional diameter; (ii) with an average partial decarburization of no 
more than 70 microns in depth (maximum individual 200 microns); (iii) 
having no inclusions greater than 20 microns; (iv) having a carbon 
segregation per heat average of 3.0 or better using European Method NFA 
04-114; (v) having a surface quality with no surface defects of a 
length greater than 0.15 mm; (vi) capable of being drawn to a diameter 
of 0.30 mm or less with 3 or fewer breaks per ton, and (vii) containing 
by weight the following elements in the proportions shown: (1) 0.78 
percent or more of carbon, (2) less than 0.01 percent of aluminum, (3) 
0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 
0.006 percent or less of nitrogen, and (5) not more than 0.15 percent, 
in the aggregate, of copper, nickel and chromium.
    This grade 1080 tire bead quality rod is defined as: (i) grade 1080 
tire bead quality wire rod measuring 5.5 mm or more but not more than 
7.0 mm in cross-sectional diameter; (ii) with an average partial 
decarburization of no more than 70 microns in depth (maximum individual 
200 microns); (iii) having no inclusions greater than 20 microns; (iv) 
having a carbon segregation per heat average of 3.0 or better using 
European Method NFA 04-114; (v) having a surface quality with no 
surface defects of a length greater than 0.2 mm; (vi) capable of being 
drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per 
ton; and (vii) containing by weight the following elements in the 
proportions shown: (1) 0.78 percent or more of carbon, (2) less than 
0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the 
aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of 
nitrogen, and (5) either not more than 0.15 percent, in the aggregate, 
of copper, nickel and chromium (if chromium is not specified), or not 
more than 0.10 percent in the aggregate of copper and nickel and a 
chromium content of 0.24 to 0.30 percent (if chromium is specified).
    The designation of the products as ``tire cord quality'' or ``tire 
bead quality'' indicates the acceptability of the product for use in 
the production of tire cord, tire bead, or wire for use in other rubber 
reinforcement applications such as hose wire. These quality 
designations are presumed to indicate that these products are being 
used in tire cord, tire bead, and other rubber reinforcement 
applications, and such merchandise intended for the tire cord, tire 
bead, or other rubber reinforcement applications is not included in the 
scope. However, should petitioners or other interested parties provide 
a reasonable basis to believe or suspect that there exists a pattern of 
importation of such products for other than those applications, end-use 
certification for the importation of such products may be required. 
Under such circumstances, only the importers of record would normally 
be required to certify the end use of the imported merchandise.
    All products meeting the physical description of subject 
merchandise that are not specifically excluded are included in this 
scope.
    The products under investigation are currently classifiable under 
subheadings 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 
7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 
7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6051, 
7227.90.6053, 7227.90.6058, and 7227.90.6059 of the HTSUS. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of this proceeding is dispositive.
    See Carbon and Certain Alloy Steel Wire Rod: Requests for exclusion 
of various tire cord quality wire rod and tire bead quality wire rod 
products from the scope of antidumping duty (Brazil, Canada, Egypt, 
Germany, Indonesia, Mexico, Moldova, South Africa, Trinidad and Tobago, 
Ukraine, and Venezuela) and countervailing duty (Brazil, Canada, 
Germany, Trinidad and Tobago, and Turkey) investigations.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. Where it is not practicable to examine all known 
producers/exporters of subject merchandise, section 777A(c)(2) of the 
Act permits us to investigate either 1) a sample of exporters, 
producers, or types of products that is statistically valid based on 
the information available at the time of selection, or 2) exporters and 
producers accounting for the largest volume of the subject merchandise 
that can reasonably be examined. In the petition, the petitioners 
identified seven producers/exporters of steel wire rod. The data on the 
record indicate that four of these producers/exporters sold subject 
merchandise to the United States during the period of investigation 
(i.e., the period July 2000 through June 2001); however, due to limited 
resources we determined that we could investigate only the largest 
exporter. See Respondent Selection Memorandum dated November 9, 2001. 
Therefore, we chose SICARTSA as the mandatory respondent in this case.

Product Comparisons

    In accordance with section 771(16) of the Act, all products 
produced by the respondents covered by the description in the Scope of 
Investigation section, above, and sold in Mexico during the POI are 
considered to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We have relied on eight 
criteria to match U.S. sales of subject merchandise to comparison-
market sales of the foreign like product or constructed value (CV): 
grade range, carbon content range, surface quality, deoxidization, 
maximum total residual content, heat treatment, diameter range, and 
coating. These characteristics have been weighted by the Department 
where appropriate. Where there were no sales of identical merchandise 
in the home market made in the ordinary course of trade to compare to 
U.S. sales, we compared U.S. sales to the next most similar foreign 
like product on the basis of the characteristics listed above.

Fair Value Comparisons

    To determine whether sales of steel wire rod from Mexico were made 
in the United States at LTFV, we compared the export price (EP) and the 
constructed export price (CEP) to the normal value (NV), as described 
in the Export Price and Constructed Export Price and Normal Value 
sections of this notice. In accordance with section 777A(d)(1)(A)(i) of 
the Act, we calculated weighted-average EPs and CEPs. We compared these 
to weighted-average home market prices, as appropriate, in Mexico.

Export Price and Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP as defined in sections 772(a) and 772(b) of the Act, respectively. 
Section 772(a) of the Act defines EP as the price at which the subject 
merchandise is first sold (or agreed to be sold before the date of 
importation by the producer or exporter of the subject merchandise 
outside of the United States to an unaffiliated purchaser in the United 
States or to an unaffiliated purchaser for exportation to the United 
States.

[[Page 17399]]

    Section 772(b) of the Act defines CEP as the price at which the 
subject merchandise is first sold in the United States before or after 
the date of importation, by or for the account of the producer or 
exporter of such merchandise, or by a seller affiliated with the 
producer or exporter, to an unaffiliated purchaser, as adjusted under 
subsections 772(c) and (d) of the Act.
    We found all of SICARTSA's sales to be EP since both SICARTSA and 
its affiliate CCC Steel made sales from outside the United States 
before the date of importation into the United Sates. For the 
respondent, we calculated EP based on the packed prices charged to the 
first unaffiliated customer in the United States. In accordance with 
section 772(c)(2) of the Act, we reduced the EP by movement expenses 
and export taxes and duties, where appropriate.

Normal Value

A. Selection of Comparison Markets

    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or value, if 
quantity is inappropriate) and that there is no particular market 
situation that prevents a proper comparison with the EP or CEP. The Act 
contemplates that quantities (or value) will normally be considered 
insufficient if they are less than 5 percent of the aggregate quantity 
(or value) of sales of the subject merchandise to the United States.
    We found that SICARTSA has a viable home market of steel wire rod. 
SICARTSA submitted home market sales data for purposes of the 
calculation of NV.
    In deriving NV, we made adjustments as detailed in the Calculation 
of Normal Value Based on Home Market Prices section below.

B. Cost of Production Analysis

    On August 31, 2001, petitioners made a sales below cost allegation 
concerning SICARTSA. Based on this allegation and in accordance with 
section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to 
believe or suspect that sales of steel wire rod manufactured in Mexico 
were made at prices below the COP. See Initiation Notice. As a result, 
the Department has conducted an investigation to determine whether 
SICARTSA made sales in its home market at prices below its COPs during 
the POI within the meaning of section 773(b) of the Act. We conducted 
the COP analysis described below.
1. Calculation of Cost of Production
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for the home 
market general and administrative (G&A) expenses, selling expenses, 
packing expenses and interest expenses. We relied on the COP data 
submitted by SICARTSA in its cost questionnaire response.
    For iron ore and lime, major inputs in wire rod production, we 
determined that the affiliates' average COP exceeded the transfer price 
SICARTSA paid to its affiliated suppliers. Therefore, pursuant to 
section 773(f)(3) of the Act, we applied the major input rule and 
adjusted SICARTSA's reported cost of manufacturing to account for 
purchases of iron ore and lime from affiliated parties at non-arm's 
length prices. We used SICARTSA's G & A ratio based on its fiscal year 
2000 financial statements. We have not used the fiscal year 2001 data, 
as suggested by SICARTSA, because the financial expense ratio for 2001 
is unsupported by data on the record. We will consider the issue 
further for the final determination. We used the submitted financial 
expense ratio based on Siderurgica del Pacifico S.A.'s fiscal year 2000 
consolidated financial statements.
    In addition, we adjusted the net financial expenses to include the 
current portion of the net gain on monetary position and to exclude 
interest gained on investments and exchange gains on accounts and notes 
receivable. We also adjusted the reported cost of goods sold used as 
the denominator to exclude G&A related depreciation and POI packing 
costs. For further details, see Memorandum from Robert B. Greger to 
Neal M. Halper: Cost of Production and Constructed Vale Calculation 
Adjustments for the Preliminary Determination, date April 2, 2002. We 
did not adjust SICARTSA's reported deprecation expense, as suggested by 
the petitioners\4\ because, based on our review of the information on 
the record we have accepted SICARTSA's depreciation expense allocation 
for purposes of the preliminary determination. We note, however, that 
the Department will examine the appropriateness of SICARTSA's reported 
depreciation expenses in detail at verification.
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    \4\ See Letter from Petitioners dated March 20, 2002
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2. Test of Home Market Sales Prices
    We compared the adjusted weighted-average COP to the home market 
sales of the foreign like product, as required under section 773(b) of 
the Act, in order to determine whether these sales had been made at 
prices below the COP within an extended period of time (i.e., a period 
of one year) in substantial quantities and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time. On a model-specific basis, we compared the revised COP 
to the home market prices, less any applicable movement charges, 
discounts and rebates.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent'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 a respondent's 
sales of a given product during the POI were at prices less than the 
COP, we determined such sales to have been made in ``substantial 
quantities'' within an extended period of time in accordance with 
section 773(b)(2)(B) of the Act. In such cases, because we compared 
prices to POI average costs, we also determined that such sales were 
not made at prices that 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.
    We found that, for certain models of steel wire rod, more than 20 
percent of the home market sales were made within an extended period of 
time at prices less than the COP. Further, the prices did not provide 
for the recovery of costs within a reasonable period of time. We 
therefore disregarded these below-cost sales and used the remaining 
sales as the basis for determining NV, in accordance with section 
773(b)(1) of the Act.

C. Calculation of Normal Value Based on Home Market Prices

    We determined price-based NVs for the respondent company as 
follows. We made adjustments for any differences in packing, and we 
deducted movement expenses pursuant to section 773(a)(6)(B)(ii) of the 
Act. In addition, where applicable, we made adjustments for differences 
in circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) of 
the Act. We made COS adjustments by deducting direct selling expenses 
incurred for home market sales (credit expense) and adding U.S. direct 
selling expenses (e.g.,

[[Page 17400]]

credit expense). We also deducted discounts from home market sales. The 
petitioners argued that certain claimed rebates should be rejected 
because they are not supported by a pre-existing and consistently-
applied policy. We recognize that there may be a question as to how 
these adjustments are labeled and note that SICARTSA acknowledged in 
its questionnaire response\5\ that the Department may wish to 
characterize these as rebates rather than discounts. Regardless of 
whether we label them as discounts or rebates, there is no evidence on 
the record to indicate that we should not allow these adjustments in 
our preliminary determination. No other adjustments to NV were claimed 
or allowed.
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    \5\ See Response to Sections B, C, and D of the Departments 
questionnaire from January 2, 2002 at page 21
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D. Arm's-Length Sales

    SICARTSA reported sales of the foreign like product to affiliated 
customers. To test whether these sales to affiliated customers were 
made at arm's length, where possible, we compared the prices of sales 
to affiliated and unaffiliated customers, net of all movement charges, 
direct selling expenses, discounts, and packing. Where the price to the 
affiliated party was on average 99.5 percent or more of the price to 
the unaffiliated parties, we determined that sales made to the 
affiliated party were at arm's length. See Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27355 (May 19, 1997) 
(preamble to the Department's regulations). Consistent with section 
351.403(c) of the Department's regulations, we excluded from our 
analysis those sales where the price to the affiliated parties was less 
than 99.5 percent of the price to the unaffiliated parties.

E. 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 transaction. The NV level of 
trade is that of the starting-price sales in the comparison market or, 
when NV is based on CV, that of the sales from which we derive SG&A 
expenses and profit. For EP sales, the U.S. level of trade is also the 
level of the starting-price sale, which is usually from exporter to 
importer.
    To determine whether NV sales are at a different level of trade 
than EP transactions, 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 level of trade 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 level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act.
    In implementing these principles in this investigation, we obtained 
information from SICARTSA about the marketing stages involved in the 
reported U.S. and home market sales, including a description of the 
selling activities performed by the respondent for each channel of 
distribution. In identifying levels of trade for EP and home market 
sales we considered the selling functions reflected in the starting 
price before any adjustments.
    In the home market, SICARTSA reported four channels of 
distribution, the first to affiliated distributors that resold the 
merchandise to unaffiliated resellers or end users, the second for 
sales to affiliated distributors who later sold the product to another 
affiliated reseller, who then resold to unaffiliated resellers or end 
users, the third representing direct sales to unaffiliated resellers, 
and the last, direct sales to unaffiliated industrial users.
    SICARTSA claims two LOTs in the home market, which it names LOT 2 
and LOT 3. SICARTSA describes its LOT 2 as direct sales to affiliated 
and unaffiliated customers and its LOT 3 as sales from SICARTSA's 
affiliates to their unaffiliated customers.
    We examined the selling functions related to both sales by 
affiliated resellers and direct sales in the home market. We found 
discrepancies between SICARTSA's narrative discussion of its 
distribution process in its section A questionnaire response, a chart 
titled Selling Activities and Services Offered in U.S. and Mexican 
Markets provided as section A response exhibit 9, resubmitted in 
exhibit AA-4, and the narrative description of services and functions 
performed for U.S. and home market sales in exhibit BC-3. For this 
preliminary determination we used the more detailed information 
provided in Exhibit BC-3 over that in the chart from Exhibit AA-4. In 
reviewing SICARTSA's responses we have determined that there are two 
channels of distribution; 1) sales by affiliates and 2) directs sales. 
With respect to the first channel of distribution, by affiliates, 
SICARTSA provided handling of rejected merchandise, pre-sales 
engineering, salesmen visits, and advertising on behalf of the 
customer. For the second channel of distribution, direct sales, in the 
home market we found that the number and level of selling functions 
provided varied by customer category, of which SICARTSA has three: 
resellers, wire drawers, and other end users. Sales to resellers 
involved the following selling functions: inventory maintenance, 
handling of rejected merchandise, pre-sale engineering advice, salesmen 
visits, and advertising on behalf of the customer. For sales to wire 
drawers, SICARTSA preformed the following selling functions: inventory 
maintenance, handling of rejected merchandise, pre-sale engineering 
advise, custom designed products, salesmen visits to customers, and 
technical visits to customers. Finally, for sales to other end users 
selling functions included inventory maintenance and the handling of 
rejected merchandise. Based on an analysis of the customer categories, 
channels of distribution and differences in selling functions we 
preliminarily find that there are two LOTs in the home market, LOT 1, 
which consists of direct sales, and LOT 3, which consists of sales by 
affiliated parties.\6\
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    \6\ SICARTSA identified its two claimed home market LOTs as LOT 
2 and LOT 3.
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    In the U.S. market SICARTSA reported two channels of distribution, 
one for sales made through its affiliated reseller, CCC Steel GmbH (CCC 
Steel), and the other for direct sales to unaffiliated customers. For 
sales made through its affiliate, while SICARTSA provides limited 
selling functions, CCC Steel performs the preponderance of the selling 
functions for sales to the unaffiliated customers: handling of rejected 
merchandise and salesmen visits to customers. For direct sales to 
unaffiliated customers SICARTSA performs the following selling 
functions: handling of rejected merchandise and salesmen visits to 
customers. SICARTSA claims that there is one U.S. LOT. Based on an 
analysis of the reported selling functions and the fact that all sales 
in the U.S. market are EP, the Department preliminarily finds that 
there is one LOT in the U.S. market.
    The petitioners argue that there is no LOT difference between 
SICARTSA's home market sales and U.S. sales.\7\ They claim that the 
selling functions that SICARTSA used to determine LOT represent either 
trivial or non-existent distinctions and that many of the services have 
been captured by other expenses reported by SICARTSA.

[[Page 17401]]

 SICARTSA claims that sales at both LOTs in the home market are at a 
more advanced LOT than the LOT in the United States.
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    \7\ See Letter from Petitioners dated March 20, 2002
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    In determining whether home market sales are at a different LOT 
than U.S. EP sales, we examined the channels of distribution, customer 
categories, and selling functions reported in the home market and in 
the United States. On the basis of this analysis we preliminarily find 
that sales at both home market LOTs are more advanced than sales at the 
LOT in the U.S. market. Although there are two levels of trade in the 
home market, neither is equivalent to with the U.S. LOT. Therefore, we 
have no appropriate information on which to determine if there is a 
pattern of consistent price differences between the comparison sales on 
which NV is based and sales at the LOT of the export transactions. 
Accordingly, we will match U.S. sales to the LOT we find to be closest 
to the U.S. LOT (i.e., home market LOT 1), where possible.

Currency Conversions

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act based on exchange rates in effect on the dates 
of the U.S. sales, as obtained from the Federal Reserve Bank (the 
Department's preferred source for exchange rates).

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
all information relied upon in making our final determination.

Final Critical Circumstances Determination

    We will make a final determination concerning critical 
circumstances in this case when we make our final determination 
regarding sales at LTFV in this investigation.

Suspension of Liquidation

    Because of our preliminary affirmative critical circumstances 
findings in this case, we are directing the Customs Service to suspend 
liquidation of any unliquidated entries of steel wire rod from Mexico 
entered, or withdrawn from warehouse, for consumption on or after the 
date which is 90 days prior to the date on which this notice is 
published in the Federal Register. We are instructing 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 EP, as indicated in 
the chart below for imports from Mexico. These instructions suspending 
liquidation will remain in effect until further notice.
    The weighted-average dumping margins are provided below:

------------------------------------------------------------------------
                                                              Margin
                  Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
SICARTSA................................................           25.70
All Others..............................................           25.70
------------------------------------------------------------------------

Disclosure

    The Department will normally disclose calculations performed within 
five days of the date of publication of this notice to the parties of 
the proceeding in this investigation in accordance with 19 CFR 
351.224(b).

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final antidumping determination is 
affirmative, the ITC will determine whether the imports covered by that 
determination are materially injuring, or threaten material injury to, 
the U.S. industry. The deadline for that ITC determination would be the 
later of 120 days after the date of this preliminary determination or 
45 days after the date of our final determination.

Public Comment

    Case briefs for this investigation must be submitted no later than 
one week after the issuance of the verification reports. Rebuttal 
briefs must be filed within five days after the deadline for submission 
of 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. Further, we would appreciate it if parties 
submitting written comments would provide the Department with an 
additional copy of the public version of any such comments on diskette.
    Section 774 of the Act provides that the Department will hold a 
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 any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
held two days after the deadline for submission of the rebuttal briefs, 
at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue, NW, Washington, DC 20230. In the event that the Department 
receives requests for hearings from parties to more than one steel wire 
rod case, the Department may schedule a single hearing to encompass all 
those cases. 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 within 30 days of 
the publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: April 2, 2002
Faryar Shizad,
Assistant Secretary for Import Administration.
[FR Doc. 02-8706 Filed 4-9-02; 8:45 am]
BILLING CODE 3510-DS-S