[Federal Register Volume 67, Number 90 (Thursday, May 9, 2002)]
[Notices]
[Pages 31255-31260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11197]



[[Page 31255]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-839]


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

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

EFFECTIVE DATE: May 9, 2002.

FOR FURTHER INFORMATION CONTACT: Christopher Riker or Martin Claessens, 
AD/CVD Enforcement Office V, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-0186 or (202) 482-5451, respectively.

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. In addition, unless otherwise 
indicated, all citations to the Department of Commerce (Department's) 
regulations are to 19 CFR part 351 (April 2001).

SUPPLEMENTARY INFORMATION:

Preliminary Determination

    We preliminarily determine that certain cold-rolled carbon steel 
flat products (cold-rolled steel) from Taiwan 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.

Case History

    This investigation was initiated on October 18, 2001.\1\ Since the 
initiation of this investigation (Initiation of Antidumping Duty 
Investigations: Cold-Rolled Carbon Steel Flat Products From Argentina, 
Australia, Belgium, Brazil, China, France, Germany, India, Japan, 
Korea, Netherlands, New Zealand, Russian, South Africa, Spain, Sweden, 
Taiwan, Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 
2001)) (Initiation Notice), the following events have occurred.
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    \1\ The petitioners in this investigation are Bethlehem Steel 
Corporation, LTV Steel Company, Inc., 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 October 31, 2001, we solicited comments from interested parties 
regarding the criteria to be used for model-matching purposes, and we 
received comments on our proposed matching criteria on November 8, 
2001. On November 8, 2001, we received model match comments from the 
petitioners and CSC. On November 26, 2001, we informed CSC and Kao 
Hsing of our revised model match criteria.
    On November 13, 2001, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that an industry in the United States is materially injured 
or threatened with material injury by reason of imports from Argentina, 
Australia, Belgium, Brazil, China, France, Germany, India, Japan, 
Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, 
Sweden, Taiwan, Thailand, Turkey and Venezuela of cold-rolled steel 
products. See Certain Cold-Rolled Steel Products from Argentina, 
Australia, Belgium, Brazil, China, France, Germany, India, Japan, 
Korea, the Netherlands, New Zealand, Russia, South Africa, Spain, 
Sweden, Taiwan, Thailand, Turkey and Venezuela, 66 FR 57985 (November 
19, 2001).
    On November 23, 2001, we selected as mandatory respondents China 
Steel Corporation including its affiliate Yieh Loong Enterprise Co. 
Ltd. (Yieh Loong) (collectively CSC) and Kao Hsing Chang Iron & Steel 
Corporation (Kao Hsing), companies which we believed to be the two 
largest producers/exporters of certain cold-rolled carbon steel 
products in Taiwan, as the mandatory respondents in this proceeding. 
For further discussion, see Respondent Selection Memorandum dated 
November 23, 2001. However, after receiving revised shipment data from 
the American Institute in Taiwan, the Department amended its respondent 
selection memorandum and added Ton Yi Industrial Corporation (Ton Yi) 
to the list of mandatory respondents selected in this investigation. 
For further discussion, see Amended Respondents Selection Memorandum 
dated November 29, 2001. Questionnaires were issued to CSC on November 
20, Kao Hsing on November 23, and Ton Yi on November 29, 2001.\2\
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    \2\ 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 of the 
foreign like product and the constructed value of the merchandise 
under investigation.
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    On December 7, 2001, the petitioners filed an allegation of 
critical circumstances with respect to imports of cold-rolled steel 
from Taiwan
    During the period December 2001 through April 2002, the Department 
received responses to the original and supplemental questionnaires from 
CSC. To date, we have not received any information from either Kao 
Hsing or Ton Yi. On January 4, 2002, we sent letters to both companies 
informing them that, while we had confirmed that they had received our 
questionnaire, we had not yet received a response. These letters also 
went without response, and we have determined that we have no choice 
but to apply total adverse facts available to these respondents. (For a 
more detailed explanation, see the Application of Facts Available 
section, below.)
    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 14, 2002, and postponed the 
preliminary determination until no later than April 26, 2002. See 
Notice of 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 (February 22, 2002).
    On February 8, 2002, the petitioners requested the Department 
initiate a sales-below-cost investigation of CSC, and requested that 
the Department solicit CSC's response to section D of the Department's 
questionnaire. On February 21, 2002, the Department determined that 
there were reasonable grounds to believe or suspect that CSC made sales 
of the foreign like product at prices below its cost of production, 
within the meaning of section 773(b) of the Act and requested that CSC 
respond to section D of the questionnaire. CSC responded to the 
Department's request in a timely manner on March 20, 2002.

[[Page 31256]]

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 
producer/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. Using company-specific 
export data and U.S. Customs Service import data for the POI, we found 
that CSC, Kao Hsing and Ton Yi accounted for a majority of the imports 
during the POI. See, Respondent Selection Memorandum dated November 23, 
2001; see also, Amended Respondents Selection Memorandum dated November 
29, 2001. Therefore, as previously stated, we designated these three 
companies as the mandatory respondents and sent to them the 
Department's antidumping questionnaire.

Period of Investigation

    The period of investigation (POI) is July 1, 2000, through June 30, 
2001.

Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise. Section 351.210(e)(2) of the 
Department's regulations requires that exporters requesting 
postponement of the final determination must also request an extension 
of the provisional measures referred to in section 733(d) of the Act 
from a four-month period until not more than six months. We received a 
request to postpone the final determination from the respondent, CSC, 
on April 25, 2002. In its request, CSC consented to the extension of 
provisional measures to no longer than the date of the final 
determination.
    Since this preliminary determination is affirmative, the request 
for postponement is made by an exporter that accounts for a significant 
proportion of exports of the subject merchandise, and there is no 
compelling reason to deny the respondent's request, we have extended 
the deadline for issuance of the final determination until the 135th 
day after the date of publication of this preliminary determination in 
the Federal Register and have extended provisional measures to no 
longer 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.

Facts Available

1. Application of Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party: 
(A) Withholds information requested by the Department; (B) fails to 
provide such information by the deadline, or in the form or manner 
requested; (C) significantly impedes a proceeding; or (D) provides 
information that cannot be verified, the Department shall use, subject 
to sections 782(d) and (e) of the Act, facts otherwise available in 
reaching the applicable determination.
    Pursuant to section 782(e) of the Act, the Department shall not 
decline to consider submitted information if all of the following 
requirements are met: (1) The information is submitted by the 
established deadline; (2) the information can be verified; (3) the 
information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and, 
(5) the information can be used without undue difficulties.
    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse 
inference, if the Department finds that an interested party failed to 
cooperate by not acting to the best of its ability to comply with the 
request for information. Furthermore, section 776(b) of the Act states 
that an adverse inference may include reliance on information derived 
from the petition. See also Statement of Administrative Action (SAA) 
accompanying the URAA, H.R. Rep. No. 103-316 at 870 (1994).
    In accordance with section 776(a)(2), 776(b), and 782(d) and (e) of 
the Act, for the reasons briefly explained below, we preliminarily 
determine that the use of total adverse facts available is warranted 
with respect to Kao Hsing and Ton Yi.
    As noted above, Kao Hsing and Ton Yi failed to provide, within the 
applicable deadlines, responses to the Department's questionnaire. 
Despite the Department's attempts to obtain Kao Hsing and Ton Yi's U.S. 
and home market information, both companies failed to reply. Because 
the requested information is crucial for purposes of preliminary 
dumping calculations, the Department must resort to facts otherwise 
available in reaching its preliminary determination, pursuant to 
section 776(a)(2)(A), (B) and (C).
    We also find that the application of an adverse inference in this 
case is appropriate, pursuant to section 776(b) of the Act. As 
discussed above, both Kao Hsing and Ton Yi failed to provide the 
critical data requested, despite the Department's clear directions in 
the original questionnaire. Furthermore, neither Kao Hsing nor Ton Yi 
made any effort to provide an explanation or propose an alternate form 
of submitting the required data. In fact, neither company has responded 
to the Department's letter of January 4, 2002, in which the Department 
reminded both companies that it had not received a response to its 
request for information. For these reasons, we find that neither Kao 
Hsing nor Ton Yi has acted to the best of its ability in responding to 
the Department's request for information, and that, consequently, an 
adverse inference is warranted under section 776(b) of the Act. See, 
e.g., Notice of Final Determination of Sales at Less than Fair Value: 
Circular Seamless Stainless Steel Hollow Products from Japan, 65 FR 
42985 (July 12, 2000) (the Department applied total adverse facts 
available where respondent failed to respond to the antidumping 
questionnaires).
    Accordingly, in selecting adverse facts available with respect to 
Kao Hsing and Ton Yi, the Department determined to apply a margin rate 
of 16.80 percent, the highest margin alleged for Taiwan in the 
petitioners' September 28, 2001 petition. (For a more detailed analysis 
of the particulars and application of facts available, see the 
Application of Facts Available for Kao Hsing and Ton Yi memorandum 
dated April 26, 2002.)

2. Corroboration of Information

    Section 776(b) of the Act states that an adverse inference may 
include reliance

[[Page 31257]]

on information derived from the petition. See also SAA at 829-831. 
Section 776(c) of the Act provides that, when the Department relies on 
secondary information (such as the petition) in using the facts 
otherwise available, it must, to the extent practicable, corroborate 
that information from independent sources that are reasonably at its 
disposal.
    The SAA clarifies that ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value (see SAA at 870). The SAA also states that independent 
sources used to corroborate such evidence may include, for example, 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation (see SAA at 870).
    To determine the probative value of the margins in the petition for 
use as adverse facts available for purposes of this determination, we 
examined evidence supporting the calculations in the petition. In 
accordance with section 776(c) of the Act, to the extent practicable, 
we examined the key elements of the export price (EP) and normal value 
(NV) calculations on which the margins in the petition were based. Our 
review of the EP and NV calculations indicated that the information in 
the petition has probative value, as certain information included in 
the margin calculations in the petition is from public sources 
concurrent, for the most part, with the relevant POI. For purposes of 
the preliminary determination, we attempted to further corroborate the 
information in the petition. We re-examined the EP and NV data which 
formed the basis for the highest margin in the petition in light of 
information obtained during the investigation and, to the extent 
practicable, found that it has probative value (see the April 26, 2002, 
memorandum to the file regarding Application of Facts Available for Kao 
Hsing Chang Iron & Steel Corporation and Ton Yi Industrial 
Corporation).
    Accordingly, in selecting adverse facts available with respect to 
Kao Hsing and Ton Yi, the Department determined to apply a margin rate 
of 16.80 percent, the highest margin alleged for Taiwan in the 
petition.

Fair Value Comparisons

    To determine whether sales of cold-rolled steel from Taiwan by CSC 
to the United States were made at LTFV, we compared the EP to the 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 weighted-average NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the respondent 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 the 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 product 
comparisons, we matched foreign like products based on the physical 
characteristics reported by the respondents 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.

1. Kick-off pup coil sales

    CSC argues that home market sales of ``kick-off pup coil'' are 
outside the ordinary course of trade. Specifically, CSC argues that no 
physical characteristics are maintained for these products because they 
are the tail and end parts of the coils that are not produced to order 
and are considered to be of a lesser quality than both secondary or 
salvage merchandise. Additionally, sales of this merchandise constitute 
an extremely small portion of CSC's sales and were only made in the 
home market. As such, for the preliminary determination the Department 
has excluded sales of the aforementioned merchandise from its analysis. 
However, the Department intends to verify the accuracy of the 
information submitted on the record as it pertains to sales of kick-off 
pup coils and will revise its position if necessary for purposes of the 
final determination.

2. Carbon Quality

    CSC created an additional field in its sales databases requesting 
that the Department further distinguish grades of commercial quality 
cold-rolled products. Specifically, CSC requested that the Department 
accept three subcategories of commercial steel, ``CQ1,'' ``CQ2,'' and 
``CQS.'' \3\ CSC argued that these three subcategories represent 
``three separate internal standards'' which correspond to distinct sets 
of mechanical and chemical properties. CSC argues that each subcategory 
represents a different hardness level, corresponding to carbon content. 
Additionally, CSC created additional subcategories for other qualities 
of commercial steels that fall under different hardness levels than 
three previously mentioned subcategories.
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    \3\ See Letter to the Department of Commerce from China Steel 
Corporation regarding product characteristics (November 6, 2001); 
see also sections B and C questionnaire response submitted by CSC 
and Yieh Loong at B-6 and B-7 (January 22, 2002).
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    The petitioners argue that it is not the Department's normal 
practice to allow companies to change reporting criteria based on their 
own internal product coding system, and that the differences in 
mechanical and chemical properties are broken out in various other 
fields.\4\ As such, the petitioners argue that the Department should 
reject CSC's suggestion and continue to use the information originally 
requested in the questionnaire.
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    \4\ See Letter to the Department of Commerce from Bethlehem 
Steel Corporation, National Steel Corporation and United States 
Steel Corporation regarding comments on the sales information 
submitted by CSC and Yieh Loong at 6 and 7 (April 8, 2002).
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    For purposes of the preliminary determination, we have not granted 
CSC's request to amend the reporting requirements for the quality 
field. It is the Department's position that the hardness specifications 
can be distinguished through CSC's response to other fields, including 
annealing, temper rolling and yield strength. Therefore, we continue to 
believe that the Department's initial reporting requirements remain 
appropriate.

Export Price

    For the price to the United States, we calculated EP, based on the 
packed prices charged to the first unaffiliated customer in the United 
States, pursuant to section 772(a) of the Act because the subject 
merchandise was either first sold by the exporter or producer outside 
the United States to an unaffiliated purchaser for exportation to the 
United States before the date of importation, or to an unaffiliated 
purchaser for exportation to the United States.
    In accordance with section 772(c)(2) of the Act, we reduced the EP 
by movement expenses, where appropriate.

[[Page 31258]]

Normal Value

A. Home Market Viability

    To determine whether there is a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV, 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. Arm's-Length Test

    Sales to affiliated customers for consumption in the home market 
which were determined not to be at arm's length were excluded from our 
analysis. To test whether these sales were made at arm's length, we 
compared the prices of comparison products to affiliated and 
unaffiliated customers, net of all movement charges, direct selling 
expenses, discounts and packing pursuant to section 773(a)(6) of the 
Act. Pursuant to 19 CFR 351.403(c) and in accordance with our practice, 
where the prices to the affiliated party were on average less than 99.5 
percent of the prices to unaffiliated parties, we determine that the 
sales made to the affiliated party were not at arm's length. See e.g., 
Notice of Final Results and Partial Rescission of Antidumping Duty 
Administrative Review: Roller Chain, Other Than Bicycle, From Japan, 62 
FR 60472, 60478 (November 10, 1997), and Antidumping Duties; 
Countervailing Duties: Final Rule (Antidumping Duties), 62 FR 27295, 
27355-56 (May 19, 1997). We included in our NV calculations those sales 
to affiliated customers that passed the arm's-length test in our 
analysis. See 19 CFR 351.403; Antidumping Duties, 62 FR 27355-56.

C. Cost of Production Analysis

    Based on our analysis of an allegation filed by the petitioners,\5\ 
we found that there were reasonable grounds to believe or suspect that 
sales of cold-rolled steel in the home market were made at prices below 
their cost of production (COP). Accordingly, pursuant to section 773(b) 
of the Act, we initiated a company-specific sales-below-cost 
investigation to determine whether sales were made at prices below 
their respective COPs (see memo from Nancy Decker and Martin Claessens 
to Gary Taverman (February 21, 2002)).
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    \5\ See Letter from the petitioners to the Department (February 
8, 2002).
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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 selling, general and 
administrative expenses (SG&A), including interest expenses, and home 
market packing costs (see Test of Home Market Sales Prices section 
below for treatment of home market selling expenses). We relied on the 
COP data submitted by CSC, except as noted below.
    a. During the period of investigation, Yieh Loong purchased from an 
affiliate slabs used in the production of subject merchandise. In 
accordance with section 773(f)(2), we adjusted the reported transfer 
price to reflect the market price of the slabs.
    b. We revised CSC's SG&A rate calculation to exclude the following 
non-operating revenue items: rent revenue/income, gain on long-term 
investment, gain on physical inventory, revenue from sale of scrap, and 
revenue from sale of fines. We also included the ``depreciation from 
manage other assets'' which was listed as a non-operating expense item 
and disallowed the ``loss for market price decline inventory'' which 
appears as a reduction in non-operating expenses.
    c. We revised Yieh Loong's SG&A rate calculation to exclude rental 
income and exchange gain.
    See Memorandum from Laurens van Houten to Neal Halper, Director, 
Office of Accounting, regarding the Cost of Production and Constructed 
Value Calculation Adjustments for the Preliminary Determination (April 
26, 2002).
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, and direct and 
indirect selling 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 the 
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 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 CSC'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, if any, as the basis for determining NV, in 
accordance with section 773(b)(1) of the Act.

D. Calculation of Normal Value Based on Home Market Prices

    We based home market prices on packed prices to unaffiliated 
purchasers in Taiwan. We adjusted, where applicable, the starting price 
for discounts and rebates. We made adjustments for any differences in 
packing and deducted home market movement expenses and domestic 
brokerage and handling, pursuant to sections 773(a)(6)(A) and 
773(a)(6)(B)(ii) of the Act. We also made circumstance of sale (COS) 
adjustments, where applicable, by deducting direct selling expenses 
incurred for home market sales (e.g., credit expenses, inventory 
maintenance, warranty expenses and technical services). 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.

E. Calculation of Normal Value Based on Constructed Value

    Section 773(a)(4) of the Act provides that, where NV cannot be 
based on comparison-market sales, NV may be based on constructed value 
(CV). Accordingly, for those models of cold-rolled steel for which we 
could not

[[Page 31259]]

determine the NV based on comparison-market sales, either because there 
were no sales of a comparable product or all sales of the comparison 
products failed the COP test, we based NV on CV.
    Section 773(e)(1) of the Act provides that CV shall be based on the 
sum of the cost of materials and fabrication for the imported 
merchandise plus amounts for selling, general, and administrative 
expenses (SG&A), profit, and U.S. packing expenses. We calculated the 
cost of materials and fabrication based on the methodology described in 
the COP section of this notice. We based CSC's and Yieh Loong's 
respective SG&A and profit on the actual amounts incurred and realized 
by each in connection with the production and sale of the foreign like 
product in the ordinary course of trade, for consumption in the 
comparison market, in accordance with section 773(e)(2)(A) of the Act.
    We made adjustments to CV for differences in the COS in accordance 
with section 773(a)(8) of the Act and 19 CFR 351.410. These involved 
the deduction from CV of direct selling expenses incurred on home 
market sales (e.g., credit expenses, inventory maintenance, warranty 
expenses and technical services).

F. Level of Trade

    In accordance with section 773(a)(1)(B)(i) 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 or CEP transaction. 
The NV LOT 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. LOT is also the level of 
the starting-price sale, which is usually from exporter to importer. 
For CEP transactions, it is the level of the constructed sale from the 
exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or CEP 
transactions, we examine stages in the marketing process and selling 
functions along the distribution chain between the producer and the 
unaffiliated customer. If the comparison market sales are at a 
different LOT 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 LOT of 
the export transaction, we make a level-of-trade adjustment under 
section 773(a)(7)(A) of the Act. For CEP sales, if the NV level is more 
remote from the factory than the CEP level and there is no basis for 
determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (i.e, the CEP-offset provision). See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731, 61733, 61746 
(November 19, 1997).
    In implementing these principles in this investigation, we obtained 
information from CSC about the marketing stages involved in the 
reported U.S. and home market sales, including a description of the 
selling activities performed by CSC 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.
    The respondents reported two separate channels of distribution in 
the home market, sales through an unaffiliated coil center, and sales 
directly to an end-user. While CSC claimed two home market channels of 
distribution, we preliminarily determine that it is more appropriate to 
consider their home market sales to have been made via a single channel 
of distribution, i.e., direct from the factory, albeit to two different 
customer categories (coil center and end-user). Nevertheless, 
regardless of the channel of distribution or customer category, all 
home market transactions received inventory maintenance, warranty 
services, technical advice, delivery arrangement services and sales 
support. Therefore, we have determined that there is a single LOT for 
all sales in the home market.
    For sales to the United States, CSC's EP sales were made through 
one channel of distribution, sales to an unaffiliated trading company 
or U.S. importer. CSC provided delivery arrangements and warranty 
service arrangements to its U.S. customer. Our examination of the 
selling functions, selling expenses and customer categories involved in 
home market and U.S. sales indicates that home market sales were made 
at a level more remote from the factory than the level of the EP 
transactions. However, because there was a single home market LOT, 
there is no information available with which to determine a pattern of 
consistent price differences between the sales on which normal value is 
based and home market sales at the LOT of the export transactions. 
Further, we do not have information that would allow us to examine 
pricing patterns based on the respondent's sales of other products, and 
there are no other respondents or other record information on which 
such an analysis could be based. Therefore, all available home market 
sales have been considered in making our product matches and no LOT 
adjustment has been made.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act based on daily exchange rates as certified by the Federal Reserve 
Bank.

Critical Circumstances

    Of the petitioners, Nucor Corporation, Steel Dynamics, Inc., WCI 
Steel, Inc., and Weirton Steel Corporation filed an allegation of 
critical circumstances with respect to imports of cold-rolled steel 
from Taiwan on December 7, 2001. Inasmuch as the petitioners submitted 
critical circumstances allegations more than 20 days before the 
scheduled date of the preliminary determination, section 
351.206(c)(2)(i) of the Department's regulations provides that we must 
issue our preliminary critical circumstances determinations not later 
than the date of the preliminary determination.
    If critical circumstances are alleged, section 733(e)(1) of the Act 
directs the Department to examine whether there is a reasonable basis 
to believe or suspect that: (A)(i) {t}here is a history of dumping and 
material injury by reason of dumped imports in the United States or 
elsewhere of the subject merchandise, or (ii) the person by whom, or 
for whose account, the merchandise was imported knew or should have 
known that the exporter was selling the subject merchandise at less 
than its fair value and there was likely to be material injury by 
reason of such sales, and (B) there have been massive imports of the 
subject merchandise over a relatively short period.
    In order to demonstrate a history of dumping and material injury 
with respect to Taiwan, the petitioners cite to the September 10, 2001, 
final dumping determination issued by the Canada Customs and Revenue 
Agency (CCRA), where the CCRA found that Taiwanese steel had been 
dumped in Canada at an average margin of 28.71 percent. In addition, 
the petitioners cite to a newspaper that claims that the Thai steel 
industry is collecting information on possible dumping by companies 
from several countries, including Taiwan. See the Petition at Exhibit 
II-52.
    In evaluating the evidence supplied by the petitioners, we note 
that on October 9, 2001, the Canadian International Trade Tribunal 
(CITT) issued a final injury determination which found that imports of 
cold-rolled

[[Page 31260]]

steel from several countries, including Taiwan, have not caused injury 
or retardation and are not threatening to cause injury to the domestic 
industry. Since the CITT issued a negative final injury determination, 
we find that the Canadian cold-rolled steel antidumping duty 
investigation does not constitute a history of dumping and material 
injury. Furthermore, the newspaper article discussing the Thai steel 
industry's intention of naming Taiwan in a potential antidumping duty 
petition with the Government of Thailand is not evidence of a history 
of dumping and material injury. Because we are not aware of any 
existing or recent antidumping order for Taiwan in the United States or 
any other country, the Department finds that there is no history of 
dumping and material injury for cold-rolled steel imports from Taiwan.
    The Department normally considers margins of 25 percent or more for 
EP sales sufficient to impute importer knowledge of sales at LTFV. We 
have calculated a preliminary margin of 3.15 percent for CSC. With 
regard to Kao Hsing and Ton Yi, we note that the margin relied upon for 
the initiation of this investigation, and assigned to these non-
responding companies as adverse facts available, was 16.80 percent. 
This margin, based on an analysis conducted by the petitioners, was 
conducted with the understanding that cold-rolled steel from Taiwan is 
sold to unaffiliated trading companies for export to the United States. 
Finally, with regard to the ``All Others'' category, it is the 
Department's practice to conduct its critical circumstances analysis of 
companies in this category based on the experience of the investigated 
companies. Therefore, in this case, we have assigned the ``all others'' 
category the same rate as was calculated for CSC. Because the petition 
margin for Taiwan was 16.80 percent, and the calculated rate for CSC is 
3.15 percent, the margins fall below the 25 percent threshold we use to 
impute importer knowledge of sales at LTFV in EP price situations. 
Therefore, the requirements of the provision in section 
733(e)(1)(A)(ii) of the Act are not satisfied.
    Given that Taiwan had no history of dumping and that the threshold 
to impute importer knowledge of sales at LTFV was not met, we 
preliminarily find no critical circumstances for Taiwan in this 
investigation.

Verification

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

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all entries of certain cold-
rolled carbon steel flat products from Taiwan, that are entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of this notice in the Federal Register. We are also 
instructing the Customs Service to require a cash deposit or the 
posting of a bond equal to the weighted-average amount by which the 
normal value exceeds the EP or CEP, as indicated in the chart below. 
These instructions suspending liquidation will remain in effect until 
further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Margin
                    Exporter/producer                      (percentage)
------------------------------------------------------------------------
China Steel Corp./Yieh Loong............................            3.15
Kao Hsing Chang Iron & Steel............................           16.80
Ton Yi Industrial.......................................           16.80
All Others..............................................            3.15
------------------------------------------------------------------------

    With respect to the ``all others'' rate, section 735(c)(5)(A) of 
the Act requires that the ``all others'' rate equal the weighted 
average of the estimated weighted-average rates established for 
exporters and producers individually investigated, excluding any zero 
and de minimis margins and margins based entirely on facts available. 
Because two of the companies have a rate based entirely on facts 
available, we have assigned the calculated rate for CSC as the ``All 
Others'' rate.

Disclosure

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

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary 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

    All parties will be notified of the specific schedule for 
submission of case and rebuttal briefs. In general, 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. Public versions of all comments and rebuttals should be 
provided to the Department and made available 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 this 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. 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.
    We will issue our final determination no later than 135 days after 
the date of publication of this notice in the Federal Register.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: April 26, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-11197 Filed 5-8-02; 8:45 am]
BILLING CODE 3510-DS-P