[Federal Register Volume 67, Number 90 (Thursday, May 9, 2002)]
[Notices]
[Pages 31200-31204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11185]



[[Page 31200]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-834]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Certain Cold-Rolled 
Carbon Steel Flat Products From Brazil

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 certain cold-rolled carbon 
steel flat products from Brazil 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: May 9, 2002.

FOR FURTHER INFORMATION CONTACT: Irina Itkin or Elizabeth Eastwood, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-0656 or (202) 482-3874, 
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 19 CFR part 351 (April 2001).

Preliminary Determination

    We preliminarily determine that certain cold-rolled carbon steel 
flat products (cold-rolled steel) from Brazil are being sold, or are 
likely to be sold, in the United States at less than fair value (LTFV), 
as provided in section 733 of the Act. The estimated margin of sales at 
LTFV is shown in the Suspension of Liquidation section of this notice.

Background

    This investigation was initiated on October 18, 2001.\1\ See Notice 
of Initiation of Antidumping Duty Investigations: Certain Cold-Rolled 
Carbon Steel Flat Products From Argentina, Australia, Belgium, Brazil, 
France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the 
People's Republic of China, the Russian Federation, South Africa, 
Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 
(Oct. 26, 2001) (Initiation Notice). The following events have occurred 
since the initiation.
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    \1\ The petitioners in this investigation are Bethlehem Steel 
Corporation, LTV Steel Company, National Steel Corporation, Nucor 
Corporation, Steel Dynamics, Inc., United States Steel Corporation, 
WCI Steel, Inc., and Weirton Steel Corporation (collectively, ``the 
petitioners'').
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    On November 13, 2001, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that imports of certain cold-rolled carbon steel flat 
products from Brazil are materially injuring the United States industry 
(see ITC Investigation Nos. 701-TA-422-425 and 731-TA-964-983 
(Publication No. 3471)).
    On November 16, 2001, we selected Usinas Siderurgicas de Minas 
Gerais (USIMINAS) and Companhia Siderurgica Paulista (COSIPA) 
(collectively ``USIMINAS/COSIPA'') as the mandatory respondents in this 
proceeding.\2\ For further discussion, see the November 16, 2001, 
memorandum from the Team to Louis Apple entitled, ``Antidumping Duty 
Investigation of Cold-Rolled Carbon Steel Flat Products from Brazil--
Selection of Respondents'' (the respondent selection memorandum). We 
subsequently issued antidumping questionnaires to USIMINAS/COSIPA on 
November 16, 2001. We issued a corrected version of the questionnaire 
appendix V with revised product characteristic variables on November 
26, 2001.
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    \2\ For purposes of this proceeding, we are treating these 
companies as the same entity. See the ``Affiliated Respondents'' 
section of this notice.
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    During the period December 2001 through April 2002, we received 
responses from USIMINAS/COSIPA to the Department's original and 
supplemental questionnaires.\3\
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    \3\ The last of these responses was submitted on April 24, 2002, 
and consequently was received too late to use in the preliminary 
determination. We intend to verify this information, however, and 
consider it for purposes of the final determination.
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    On February 7, 2002, pursuant to 19 CFR 351.205(e), the petitioners 
made a timely request to postpone the preliminary determination. We 
granted this request on February 22, 2002, and postponed the 
preliminary determination until no later than April 26, 2002. See 
Postponement of Preliminary Determinations of Antidumping Duty 
Investigations: Certain Cold-Rolled Carbon Steel Flat Products from 
Argentina (A-357-816), Australia (A-602-804), Belgium (A-423-811), 
Brazil (A-351-834), the People's Republic of China (A-570-872), France 
(A-427-822), Germany (A-428-834), India (A-533-826), Japan (A-588-859), 
Korea (A-580-848), the Netherlands (A-421-810), New Zealand (A-614-
803), Russia (A-821-815), South Africa (A-791-814), Spain (A-469-812), 
Sweden (A-401-807), Taiwan (A-583-839), Thailand (A-549-819), Turkey 
(A-489-810) and Venezuela (A-307-822), 67 FR 8227 (Feb. 22, 2002).

Postponement of Final Determination

    Pursuant to section 735(a)(2) of the Act, on April 5, 2002, the 
respondent 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. 
In a request on April 19, 2002, the respondent consented to the 
extension of provisional measures to no longer than six months. In 
accordance with 19 CFR 351.210(b), because our preliminary 
determination is affirmative, because no compelling reasons for denial 
exist, and because the exporter accounts for a significant proportion 
of exports of subject merchandise, 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. 
Furthermore, any provisional measures imposed by this investigation 
have been extended from a four-month period to not more than six 
months.

Scope of Investigation

    For purposes of this investigation, the products covered are 
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel 
products. For a full description of the scope of this investigation, as 
well as a complete discussion of all scope exclusion requests submitted 
in the context of the on-going cold-rolled steel investigations, please 
see the ``Scope Appendix'' attached to the Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Carbon Steel Flat Products from Argentina, published concurrently with 
this preliminary determination.

[[Page 31201]]

Period of Investigation

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

Fair Value Comparisons

    To determine whether sales of certain cold-rolled carbon steel flat 
products from Brazil to the United States were made at LTFV, we 
compared the export price (EP) to the normal value (NV), as described 
in the ``Export Price'' and ``Normal Value'' sections of this notice, 
below. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
compared POI weighted-average EPs to POI weighted-average NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by USIMINAS/COSIPA in the home market during 
the POI that fit the description in the ``Scope of Investigation'' 
section of this notice to be foreign like products for purposes of 
determining appropriate product comparisons to U.S. sales. We compared 
U.S. sales to sales made in the home market, 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 sales of the most similar foreign like product made in the 
ordinary course of trade. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
the respondent in the following order of importance: hardening and 
tempering, painted, carbon level, quality, yield strength, minimum 
thickness, thickness tolerance, width, edge finish, form, temper 
rolling, leveling, annealing, and surface finish.
    In certain instances, however, USIMINAS/COSIPA did not provide 
sufficient information to calculate a margin for the reported U.S. 
products. Specifically, USIMINAS/COSIPA did not report cost data for 
certain home market products, and it reported incomplete cost data for 
other products. Section 776(a)(2) of the Act provides that if an 
interested party or any other person (A) withholds information that has 
been requested by the administering authority; (B) fails to provide 
such information by the deadlines for the submission of the information 
or in the form and manner requested, subject to subsections (c)(1) and 
(e) of section 782 of the Act; (C) significantly impedes a proceeding 
under this title; or (D) provides such information but the information 
cannot be verified as provided in section 782(i) of the Act, the 
administering authority shall, subject to section 782(d) of the Act, 
use the facts otherwise available in reaching the applicable 
determination under this title.\4\ Section 776(b) of the Act further 
provides that adverse inferences may be used when a party has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information.
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    \4\ Where the Department determines that a response to a request 
for information does not comply with the request, section 782(d) of 
the Act provides that the Department will so inform the party 
submitting the response and will, to the extent practicable, provide 
that party the opportunity to remedy or explain the deficiency. If 
the party fails to remedy the deficiency within the applicable time 
limits, the Department may, subject to section 782(e) of the Act, 
disregard all or part of the original and subsequent responses, as 
appropriate. Section 782(e) of the Act provides that the Department 
``shall not decline to consider information that is submitted by an 
interested party and is necessary to the determination but does not 
meet all the applicable requirements established by the 
administering authority'' if the information is timely, can be 
verified, and is not so incomplete that it cannot be used, and if 
the interested party acted to the best of its ability in providing 
the information. Where all of these conditions are met, the statute 
requires the Department to use the information, if it can do so 
without undue difficulties.
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    In this case, we find that USIMINAS/COSIPA withheld cost data 
requested by the Department for certain products and failed to provide 
complete and usable cost data for others. Because: (1) We informed 
USIMINAS/COSIPA of the deficiencies in its data and provided it an 
opportunity to remedy them in a supplemental questionnaire (pursuant to 
section 782(d) of the Act); and (2) USIMINAS/COSIPA did not provide the 
information requested or provided information that was so incomplete 
that it could not be used (within the meaning of section 782(e) of the 
Act), we are resorting to facts otherwise available pursuant to section 
776(a)(2)(A) of the Act. Further, the cost data that USIMINAS/COSIPA 
did not provide for these products was provided for numerous other 
products. USIMINAS/COSIPA did not indicate or explain why it was not 
possible to provide this information for the products in question. 
Therefore, we conclude that USIMINAS/COSIPA could have provided the 
necessary data but chose not to, thereby failing to cooperate to the 
best of its ability within the meaning of section 776(b) of the Act. 
Accordingly, we have based the margin for U.S. products which match to 
the products in question on adverse facts available. As adverse facts 
available, we have assigned the highest non-aberrational margin 
calculated for any other U.S. product, in accordance with our practice. 
See, e.g., Static Random Access Memory Semiconductors From Taiwan; 
Final Results of Antidumping Duty New Shipper Review, 65 FR 12214 (Mar. 
8, 2000) and accompanying decision memorandum at Comment 1; Final 
Determination of Sales at Less than Fair Value: Stainless Steel Sheet 
and Strip in Coils from Germany, 64 FR 30710, 30732 (June 8, 1999); 
Notice of Final Determination of Sales at Less Than Fair Value: Hot-
Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 FR 
24329, 24361-24362 (May 6, 1999); Notice of Final Determination of 
Sales at Less Than Far Value: Certain Cut-to-Length Carbon Steel Plate 
from South Africa, 62 FR 61731, 61747 (Nov. 19, 1997); and Final 
Determination of Sales at Less Than Fair Value: Certain Helical Spring 
Lock Washers from the People's Republic of China, 58 FR 48833, 48839 
(Sept. 20, 1993). In selecting a facts available margin, we sought a 
margin that is sufficiently adverse so as to effectuate the purposes of 
the adverse facts available rule, which is to induce respondents to 
provide the Department with complete and accurate information in a 
timely manner. We also sought a margin that is indicative of USIMINAS/
COSIPA's customary selling practices and is rationally related to the 
transactions to which the adverse facts available are being applied. To 
that end, we selected the highest margin for an individual product in a 
commercial quality that fell within the mainstream of USIMINAS/COSIPA's 
transactions (i.e., transactions that reflect sales of products that 
are representative of the broader range of models used to determine 
normal value).
    For further discussion, see the memorandum entitled ``Concurrence 
Memorandum for the Preliminary Determination in the Investigation of 
Certain Cold-Rolled Carbon Steel Flat Products from Brazil,'' dated 
April 26, 2002 (the concurrence memorandum).

Affiliated Respondents

    In the last cold-rolled investigation for Brazil, the Department 
treated USIMINAS and COSIPA as affiliated parties and collapsed these 
entities. See Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products 
from Brazil, 65 FR 5554, 5562 (Feb. 4, 2000). In the respondent 
selection memorandum, the Department stated that it intended to treat 
these companies as affiliated producers. Neither USIMINAS nor COSIPA

[[Page 31202]]

commented on our intention to treat them as affiliated producers. 
Therefore, we have continued to treat USIMINAS and COSIPA as a single 
entity and to calculate a single margin for them.

Export Price

    In accordance with section 772(a) of the Act, we based our 
calculations on EP because the subject merchandise was sold by the 
producer or exporter directly to the first unaffiliated purchaser in 
the United States prior to importation. In cases where the date of 
shipment preceded the date of invoice reported by USIMINAS/COSIPA, we 
used the date of shipment as the date of sale because the terms of sale 
were established on that date.
    We based EP on the packed delivered prices to unaffiliated 
purchasers in the United States. We increased U.S. price by the amount 
of the export subsidy found in the companion countervailing duty 
investigation on certain cold-rolled carbon steel flat products from 
Brazil. See Notice of Preliminary Affirmative Countervailing Duty 
Determination and Alignment with Final Antidumping Duty Determinations: 
Certain Cold-Rolled Carbon Steel Flat Products from Brazil, 67 FR 9652 
(Mar. 4, 2002). Where appropriate, we made adjustments for discounts. 
We also made deductions for movement expenses, in accordance with 
section 772(c)(2)(A) of the Act; these included, where appropriate, 
foreign inland freight, foreign brokerage and handling, ocean freight, 
marine insurance, U.S. brokerage and handling, and U.S. customs duties.
    For those movement expenses provided by affiliated parties, we 
assigned the highest amount reported for each mill because USIMINAS/
COSIPA did not demonstrate that these expenses were incurred at arm's 
length, despite a request that it do so. In addition, for USIMINAS, we 
used the highest international freight amounts reported for each vessel 
because USIMINAS indicated in its supplemental response that these 
expenses do not vary by vessel. See the April 26, 2002, memorandum from 
Irina Itkin to the file entitled ``Calculations Performed for Usinas 
Siderurgicas de Minas Gerais (USIMINAS) and Companhia Siderurgica 
Paulista (COSIPA) in the Preliminary Determination of the Antidumping 
Duty Investigation on Certain Cold-Rolled Carbon Steel Flat Products 
from Brazil'' (the sales calculation memorandum).

Normal Value

A. Home Market Viability

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

B. Cost of Production Analysis

    Based on the cost allegation submitted by the petitioners on 
January 22, 2002, the Department found reasonable grounds to believe or 
suspect that the respondent had made sales in the home market at prices 
below their cost of production (COP), in accordance with section 
773(b)(2)(A)(i) of the Act. As a result, on February 12, 2002, the 
Department initiated an investigation to determine whether the 
respondent made home market sales during the POI at prices below their 
respective COPs within the meaning of section 773(b) of the Act. See 
Memorandum from LaVonne Jackson to Neal Halper, Director, Office of 
Accounting, entitled ``Petitioners' Allegation of Sales Below the Cost 
of Production for Usinas Siderurgicas de Minas Gerais, SA 
(``USIMINAS'') and Companhia Siderurgica Paulista (``COSIPA''),'' dated 
February 12, 2002.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus an amount for general and administrative 
expenses (G&A), including interest expenses (see the ``Test of Home 
Market Sales Prices'' section below for the treatment of home market 
selling expenses). We relied on the COP data submitted by USIMINAS/
COSIPA except as noted below.
    1. As discussed above, we applied adverse facts available to 
USIMINAS's reported costs because USIMINAS disregarded the Department's 
instructions to report its costs based on the POI. As adverse facts 
available, we increased the cost of manufacture (COM) of all products 
produced by USIMINAS. We based this increase on the highest percentage 
difference between USIMINAS's product-specific COMs and COSIPA's 
product-specific COMs (where COSIPA's COM exceeded USIMINAS's and where 
the products were produced by both USIMINAS and COSIPA).
    2. We adjusted USMINAS/COSIPA's reported COP to exclude PIS and 
COFINS taxes. See the ``Calculation of Normal Value Based on Comparison 
Market Prices'' section of this notice, below, for further discussion.
    3. We adjusted USMINAS/COSIPA's GNA expense ratio to include 
goodwill amortization expenses, as well as the depreciation expenses of 
an idled asset.
    4. We adjusted USIMINAS and COSIPA's reported financial expense 
ratio to exclude the portion of the reported financial income offset 
related to long-term interest bearing assets. We based the excluded 
amount on the ratio of long-term interest bearing assets to total 
interest bearing assets.
    See the April 26, 2002, memorandum from LaVonne Jackson to Neal 
Halper entitled ``Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Results'' referencing the Antidumping 
Duty Investigation of Certain Cold-Rolled Carbon-Quality Steel Products 
from Brazil (the cost calculation memorandum) for further discussion.
2. Test of Home Market Sales Prices
    On a product-specific basis, 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 
the sale prices were below the COP. The prices were exclusive of any 
applicable movement charges, rebates, discounts, selling expenses, and 
packing expenses. In determining whether to disregard home market sales 
made at prices less than their COP, we examined, in accordance with 
sections 773(b)(1)(A) and (B) of the Act, whether such sales were made 
(1) within an extended period of time in substantial quantities, and 
(2) at prices which permitted the recovery of all costs within a 
reasonable period of time.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of a 
respondent's sales of a given product are at prices less than the COP, 
we do not disregard any below-cost sales of that product, because we 
determine that in such instances the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a

[[Page 31203]]

respondent's sales of a given product during the POI are at prices less 
than the COP, we determine that in such instances the below-cost sales 
represent ``substantial quantities'' within an extended period of time, 
in accordance with section 773(b)(1)(A) of the Act. In such cases, we 
also determine whether such sales were made at prices which would not 
permit recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(1)(B) of the Act.
    We found that, for certain specific products, more than 20 percent 
of USIMINAS/COSIPA's home market sales were at prices less than the COP 
and, in addition, such sales did not provide for the recovery of costs 
within a reasonable period of time. We therefore excluded these sales 
and used the remaining sales as the basis for determining NV, in 
accordance with section 773(b)(1) of the Act.

C. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (LOT) as the EP or CEP LOT. Sales are made at 
different LOTs if they are made at different marketing stages (or their 
equivalent). See 19 CFR 412(c)(2). Substantial differences in selling 
activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. Id.; 
see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (Nov. 19, 1997).
    In order to determine whether the comparison sales were at 
different stages in the marketing process than the U.S. sales, we 
reviewed the distribution system in each market (i.e., the ``chain of 
distribution''),\5\ including selling functions,\6\ class of customer 
(``customer category''), and the level of selling expenses for each 
type of sale.
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    \5\ The marketing process in the United States (for EP) and 
comparison markets begins with the producer and extends to the sale 
to the final user or consumer. The chain of distribution between the 
two may have many or few links, and the respondent's sales occur 
somewhere along this chain. In performing this evaluation, we 
considered the narrative responses of the respondent to properly 
determine where in the chain of distribution the sale appears to 
occur.
    \6\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of this preliminary determination, 
we have organized the common cold-rolled carbon steel flat products 
selling functions into six major categories: freight and delivery, 
advertising and sales promotion, sales and marketing support, 
inventory maintenance, warranty service, and technical service.
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    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales (i.e., NV based on 
either home market or third country prices \7\), we consider the 
starting prices before any adjustments. For CEP sales, we consider only 
the selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 
2001).
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    \7\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses, G&A and profit for CV, where possible.
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    When the Department is unable to find sales of the foreign like 
product in the comparison market at the same LOT as the EP or CEP LOT, 
the Department may compare the U.S. sale to sales at a different LOT in 
the comparison market. In comparing EP or CEP sales at a different LOT 
in the comparison market, where available data make it practicable, we 
make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if a NV LOT is more remote from the factory than 
the CEP LOT and there is no basis for determining whether the 
difference in LOTs between NV and CEP affected price comparability 
(i.e., no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act.
    USIMINAS/COSIPA claimed that it made home market sales at two 
levels of trade. We analyzed the information on the record and found 
that USIMINAS/COSIPA performed different marketing functions in selling 
to its home market customers (i.e., the affiliated resellers provided 
many services to their customers, while the mills only provided minimal 
services). Therefore, we determined that USIMINAS/COSIPA made home 
market sales at two levels of trade.
    In the United States, USIMINAS/COSIPA reported that it made EP 
sales at one level of trade. Our analysis showed that USIMINAS/COSIPA's 
EP sales were made at one level of trade and we find that these sales 
were made at the same level of trade as the mill direct sales in the 
home market. Accordingly, where possible, we matched EP sales to home 
market mill direct sales and made no LOT adjustment because the sales 
were made at the same LOT. Where we matched EP sales to affiliated 
reseller home market sales, we made a LOT adjustment in accordance with 
section 773(a)(7)(A) of the Act because we found that there was a 
pattern of consistent price differences between the two home market 
LOTs.
    For a detailed explanation of this analysis, see the concurrence 
memorandum.

D. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on delivered prices to unaffiliated 
customers or prices to affiliated customers that we determined to be at 
arm's-length, adjusted for billing errors and discounts. We made 
deductions from the starting price for taxes in accordance with section 
773(a)(6)(B)(iii) of the Act. See Notice of Preliminary Determination 
of Sales at Less Than Fair Value and Postponement of Final 
Determination: Carbon and Certain Alloy Steel Wire Rod from Brazil, 67 
FR 18165 (April 15, 2002). We recalculated certain taxes because 
USIMINAS/COSIPA did not consistently report them. In addition, we 
disallowed an adjustment for certain discounts for USIMINAS and Rio 
Negro because they were not reported on a customer-specific basis as 
requested in our supplemental questionnaire. For further discussion, 
see the sales calculation memorandum.
    We also made deductions for movement expenses, including inland 
freight (plant to distribution warehouse and plant/warehouse to 
customer), warehousing and inland insurance under section 
773(a)(6)(B)(ii) of the Act. For those freight expenses provided by an 
affiliated freight supplier, we assigned the lowest reported freight 
expense amount because USIMINAS/COSIPA did not provide evidence that 
these expenses were incurred at arm's length, despite a request that it 
do so. See the sales calculation memorandum.
    In addition, we made adjustments under section 773(a)(6)(C)(iii) of 
the Act and 19 CFR 351.410 for differences in circumstances of sale for 
imputed credit expenses (offset by interest revenue), certain warranty 
expenses, and commissions. We adjusted the reported credit expenses as 
follows: 1) for COSIPA, we assigned the negative weighted-average of 
the credit expenses reported in the home market sales listings for 
those sales which were paid in advance of shipment because COSIPA 
provided insufficient information to calculate the actual credit 
amounts; 2) for USIMINAS, Rio Negro, Fasal, and Dufer, we recalculated 
credit expenses using the short-term borrowing rate of COSIPA because 
these companies did not have short-term borrowings during the POI; and 
3) for USIMINAS, we also recalculated the

[[Page 31204]]

reported U.S. credit expenses using the date that the merchandise left 
the factory, rather than the date of the bill of lading, as the date of 
shipment. Regarding home market warranty expenses, USIMINAS/COSIPA 
based the amount of these expenses on the sales value of returned 
merchandise. We disallowed these expenses because USIMINAS/COSIPA also 
reported the resales of the returned merchandise in its home market 
sales listing. See the sales calculation memorandum. Regarding 
commissions, USIMINAS/COSIPA incurred commissions only in the home 
market. Therefore, we offset home market commissions by the lesser of 
the commission amount or U.S. indirect selling expenses.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411.
    We also deducted home market packing costs and added U.S. packing 
costs in accordance with section 773(a)(6)(A) and (B) of the Act. We 
disallowed certain packing expenses for USIMINAS/COSIPA's home market 
resellers because these expenses were aberrationally high in comparison 
to other packing expenses and were not explained by the respondent. See 
the sales calculation memorandum.

E. Arm's-Length Sales

    USIMINAS/COSIPA 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, and packing. Where the price 
to the affiliated party was, on average, 99.5 percent or more of the 
price to unaffiliated parties, we determined that sales made to the 
affiliated party were at arm's length. 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.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank.

Verification

    As provided in section 782(i) of the Act, we will 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 from Brazil 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 EP, 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
------------------------------------------------------------------------
USIMINAS/COSIPA............................................        43.34
All Others.................................................        43.34
------------------------------------------------------------------------

Disclosure

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

ITC 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 these imports 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 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, N.W., 
Washington, D.C. 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.
    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: April 26, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-11185 Filed 5-8-02; 8:45 am]
BILLING CODE 3510-DS-P