[Federal Register Volume 68, Number 174 (Tuesday, September 9, 2003)]
[Notices]
[Pages 53105-53108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22940]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-822]


Certain Corrosion Resistant Carbon Steel Flat Products From 
Canada: Preliminary Results of Antidumping Duty Administrative Review

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

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain 
corrosion resistant carbon steel flat products (CORE) from Canada in 
response to a request by petitioners, Bethlehem Steel Corporation, 
National Steel Corporation, and United States Steel Corporation. This 
review covers shipments of this merchandise to the United States during 
the period of August 1, 2001, through July 31, 2002.
    We have preliminarily determined that U.S. sales have been made 
below normal value (NV). If these preliminary results are adopted in 
our final results, we will instruct the U.S. Bureau of Customs and 
Border Protection (BCBP) to assess antidumping duties based on the 
difference between the export price (EP) or constructed export price 
(CEP) and the NV. Interested parties are invited to comment on these 
preliminary results. See Preliminary Results of Review section of this 
notice.

EFFECTIVE DATE: September 9, 2003.

FOR FURTHER INFORMATION CONTACT: Christian Hughes or Elfi Blum-Page, 
Office of Antidumping/Countervailing Duty Enforcement VII, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone (202) 482-0190 or (202) 482-0197, respectively.

Background

    The Department published the antidumping duty order on CORE from 
Canada on August 19, 1993 (58 FR 44162). On August 6, 2002, the 
Department published a notice of opportunity to request administrative 
review of the antidumping duty order on CORE from Canada (67 FR 50856). 
On August 30, 2002, the Department received a timely request for an 
administrative review of the antidumping duty order on CORE from 
petitioners. On September 25, 2002, we published a notice initiating an 
administrative review of CORE for Dofasco Inc. (Dofasco) and Stelco 
Inc. (Stelco). See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, Requests for Revocation in Part and Deferral of 
Administrative Reviews, 67 FR 60210 (September 25, 2002).
    On February 25, 2003, the Department extended the deadline for the 
preliminary results of this antidumping duty administrative review from 
May 3, 2002, until no later than August 31, 2003. Since the 120-day 
extension falls on a weekend and the next business day is a holiday, 
the due date is September 2, 2003. See Notice of Extension of Time 
Limit for Preliminary Results of the Antidumping Duty Administrative 
Review: Corrosion-Resistant Carbon Steel Flat Products from Canada, 68 
FR 10204 (March 4, 2003).
    On July 3, 2003, the Department rescinded the antidumping duty 
administrative review with respect to Stelco because petitioners 
withdrew their request for the review and no other party had requested 
a review of Stelco. See Certain Corrosion-Resistant Carbon Steel Flat 
Products from Canada: Rescission, in Part, of Antidumping Duty 
Administrative Review, 68 FR 41302 ( July 11, 2003). Therefore, this 
administrative review only covers Dofasco.

Scope of the Antidumping Duty Order

    The product covered by this antidumping duty order is certain 
corrosion-resistant steel, and includes flat-rolled carbon steel 
products, of rectangular shape, either clad, plated, or coated with 
corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, 
nickel- or iron-based alloys, whether or not corrugated or painted, 
varnished or coated with plastics or other nonmetallic substances in 
addition to the metallic coating, in coils

[[Page 53106]]

(whether or not in successively superimposed layers) and of a width of 
0.5 inch or greater, or in straight lengths which, if of a thickness 
less than 4.75 millimeters, are of a width of 0.5 inch or greater and 
which measures at least 10 times the thickness or if of a thickness of 
4.75 millimeters or more are of a width which exceeds 150 millimeters 
and measures at least twice the thickness, as currently classifiable in 
the Harmonized Tariff Schedule (HTS) under item numbers 7210.30.0030, 
7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.61.0000, 
7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 
7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 
7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 
7212.60.0000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 
7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, 
and 7217.90.5090. Included in this review are corrosion-resistant, 
flat-rolled products of non-rectangular cross-section where such cross-
section is achieved subsequent to the rolling process (i.e., products 
which have been ``worked after rolling'')--for example, products which 
have been beveled or rounded at the edges. Excluded from this review 
are flat-rolled steel products either plated or coated with tin, lead, 
chromium, chromium oxides, both tin and lead (``terne plate''), or both 
chromium and chromium oxides (``tin-free steel''), whether or not 
painted, varnished or coated with plastics or other nonmetallic 
substances in addition to the metallic coating. Also excluded from this 
review are clad products in straight lengths of 0.1875 inch or more in 
composite thickness and of a width which exceeds 150 millimeters and 
measures at least twice the thickness. Also excluded from this review 
are certain clad stainless flat-rolled products, which are three-
layered corrosion-resistant carbon steel flat-rolled products less than 
4.75 millimeters in composite thickness that consist of a carbon steel 
flat-rolled product clad on both sides with stainless steel in a 20%-
60%-20% ratio.

Verification

    Although verification in this administrative review was not 
required under section 351.307(b)(1)(v) of the Department's 
regulations, the Department conducted verification of certain sales 
information provided by Dofasco using standard verification procedures, 
on-site inspection of the manufacturer's facilities, and the 
examination of relevant sales and financial records. Our verification 
results are outlined in the public and proprietary versions of the 
Memorandum to File: Report on the Verification of Dofasco Inc. in the 
Ninth (01/02) Antidumping Duty Administrative Review for Certain 
Corrosion-Resistant Carbon Steel Flat Products from Canada, dated 
August 27, 2003 (Verification Report), which are on file in the Central 
Records Unit, room B-099 of the main Commerce Building.

Analysis

Collapsing of Dofasco and Sorevco, Inc.

    For purposes of this review, we have collapsed Dofasco and Sorevco 
Inc. (Sorevco) and have treated them as a single respondent, as we have 
done in prior segments of the proceeding. See e.g., Certain Corrosion-
Resistant Carbon Steel Flat Products from Canada: Final Determination 
of Sales at Less than Fair Value, 58 FR 37099 (1993); see also Certain 
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate from Canada: Final Results of Antidumping 
Duty Administrative Reviews, and Determination Not to Revoke in Part, 
65 FR 9243 (February 24, 2000) (Canadian Steel 5th). No new information 
or evidence of changed circumstances has been obtained in this review 
to warrant reconsideration of our decision to collapse these two 
companies.

Product Comparisons

    In accordance with section 771(16) of the Tariff Act of 1930, as 
amended (the Act), we considered all products produced by the 
respondent that are covered by the description in the Scope of 
Antidumping Duty Order section, above, and sold in the home market 
during the period of review (POR), to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
Where there were no sales of identical merchandise in the home market 
to compare to U.S. sales, we compared U.S. sales to the most similar 
foreign like product on the basis of the characteristics listed in 
Appendix V of the Department's October 25, 2002 antidumping 
questionnaire.

Normal Value Comparisons

    To determine whether sales of subject merchandise to the United 
States were made at less than NV, we compared the EP or the CEP to NV, 
as described in the Export Price and Normal Value sections of this 
notice. In accordance with section 777A(d)(2) of the Act, we calculated 
monthly weighted-average prices for NV and compared these to individual 
U.S. transaction prices.

Export Price

    We used EP when the subject merchandise was sold, directly or 
indirectly, to the first unaffiliated purchaser in the United States 
prior to importation, and CEP was not otherwise warranted by facts on 
the record. Based on evidence on the record, we conclude that the long-
term contract sales are made by Dofasco's U.S. affiliate, Dofasco 
U.S.A. (DUSA), and should be classified as CEP sales.
    Dofasco makes certain sales in the United States through DUSA. The 
sales involving DUSA are either made through long-term contracts or are 
spot sales. Evidence on the record indicates that, for spot sales, 
while DUSA is involved, the sales are made by Dofasco. We are treating 
these sales as EP sales. However, based on evidence on the record, we 
conclude that the long-term contract sales made by DUSA should be 
classified as CEP sales. See Memorandum to File: Analysis of Dofasco, 
Inc. and Sorevco, Inc. (Dofasco) for the Preliminary Results of the 
Ninth Administrative Review of Corrosion-Resistant Carbon Steel Flat 
Products from Canada, dated September 2, 2003. (Dofasco Analysis Memo).
    The Department calculated EP and CEP for Dofasco based on packed 
prices to customers in the United States. We made deductions from the 
starting price, net of discounts and rebates, for movement expenses 
(foreign and U.S. movement, U.S. Customs duty and brokerage, and post-
sale warehousing) in accordance with section 772(c)(2) of the Act and 
section 351.401(e) of the Department's regulations. In addition, for 
CEP sales, in accordance with sections 772(d)(1) and (2) of the Act, we 
deducted from the starting price credit expenses, indirect selling 
expenses, including inventory carrying costs, commissions, royalties, 
and warranty expenses incurred in the United States and Canada 
associated with economic activities in the United States. As in prior 
reviews, certain Dofasco sales have undergone minor further processing 
in the United States as a condition of sale to the customer. The 
Department has deducted the price charged to Dofasco by the 
unaffiliated contractor for this minor further processing from gross 
unit price to determine U.S. price. See Canadian Steel 5th Review.
    As provided in section 351.401(i) of the Department's regulations, 
we determined the date of sale based on the date on which the exporter 
or producer

[[Page 53107]]

established the material terms of sale. Dofasco reported that, except 
for long-term contracts and sales of secondary products, the date on 
which all material terms of sale are established is the final order 
acknowledgment date. Therefore, we used this reported date as the date 
of sale. For Dofasco's sales made pursuant to long-term contracts, we 
used date of the contract as date of sale. We used shipment date as the 
date of sale for sales of secondary products for which there is no 
order acknowledgment.

Normal Value

    The Department determines the viability of the home market and the 
comparison market by comparing the aggregate quantity of home market 
and U.S. sales. We determined that Dofasco's quantity of sales in its 
home market exceeded five percent of its sales to the United States of 
CORE. See section 351.404(b) of the Department's regulations. Moreover, 
there is no evidence on the record supporting a particular market 
situation in the exporting company's country that would not permit a 
proper comparison of home market and U.S. prices. Therefore, in 
accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on 
the price at which the foreign like product was first sold for 
consumption in the home market, in the usual commercial quantities and 
in the ordinary course of trade and, to the extent practicable, at the 
same level of trade (LOT) as the EP or CEP.
    We used sales to affiliated customers only where we determined such 
sales were made at arms-length prices (i.e., at prices comparable to 
the prices at which the respondent sold identical merchandise to 
unaffiliated customers).
    The Department disregarded sales below cost of production (COP) in 
the last completed review. See Notice of Final Results of Antidumping 
Duty Administrative Reviews and Determination Not to Revoke in Part: 
Certain Corrosion-Resistant Carbon Steel Flat Products and Cut-to-
Length Carbon Steel Plate From Canada, 66 FR 3543 (January 16, 2001) 
(Canadian Steel 6th). We therefore have reasonable grounds to believe 
or suspect, pursuant to section 773(b)(2)(A)(ii) of the Act, that sales 
of the foreign like product under consideration for the determination 
of NV in this review may have been made at prices below COP. Thus, 
pursuant to section 773(b)(1) of the Act, we examined whether Dofasco's 
sales in the home market were made at prices below the COP.
    We compared sales of the foreign like product in the home market 
with model-specific COP figures for the POR. In accordance with section 
773(b)(3) of the Act, we calculated COP based on the sum of the costs 
of materials and fabrication employed in producing the foreign like 
product, plus SG&A expenses and all costs and expenses incidental to 
placing the foreign like product in packed condition and ready for 
shipment. In our sales-below-cost analysis, we used home market sales 
and COP information provided by Dofasco in its questionnaire responses.
    We made adjustments to COP and CV to reflect appropriately 
Dofasco's expenses associated with painting services provided by an 
affiliate. We made further adjustments by using Dofasco's fiscal year 
2002 financial statements for general & administrative (G&A) expenses.
    We compared the weighted-average COPs to 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. In determining whether to disregard home market sales made at 
prices below the COP, we examined 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 in the normal course of trade, in accordance with 
section 773(b)(1)(A) and (B) of the Act. On a product-specific basis, 
we compared the COP to home market prices, less any movement charges, 
discounts, and direct and indirect selling expenses.
    Pursuant to section 773(b)(2)(c) of the Act, where less than 20 
percent of a respondent's sales of a given model were at prices less 
than COP, we did not disregard any below-cost sales of that model 
because the below-cost sales were not made in substantial quantities 
within an extended period of time. Where 20 percent or more of a 
respondent's sales of a given model were at prices less than COP, we 
disregarded the below-cost sales because they were made in substantial 
quantities within an extended period of time, in accordance with 
sections 773(b)(B) and (c) of the Act. Because we compared prices to 
POR-average costs, we also determined that the below-cost prices did 
not permit the recovery of costs within a reasonable period of time.
    In accordance with section 773(a)(4) of the Act, we used 
constructed value (CV) as the basis for NV when there were no above-
cost contemporaneous sales of identical or similar merchandise in the 
comparison market. We calculated CV in accordance with section 773(e) 
of the Act. We included the cost of materials and fabrication, selling, 
general and administrative expenses (SG&A), and profit. In accordance 
with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit 
on the amounts incurred and realized by the respondent in connection 
with the production and sale of the foreign like product in the 
ordinary course of trade for consumption in the foreign country. For 
selling expenses, we used the weighted-average home market selling 
expenses.
    In accordance with section 773(a)(1)(B)(i) of the Act, where 
possible, we based NV on sales at the same LOT as the U.S. price. See 
the Level of Trade section below.
    For those product comparisons for which there were sales at prices 
above COP, we based NV on home market prices to affiliated (when made 
at prices determined to be arms-length) or unaffiliated parties, in 
accordance with section 351.403 of the Department's regulations. Home 
market starting prices were based on packed prices to affiliated or 
unaffiliated purchasers in the home market net of discounts and 
rebates. We made adjustments, where applicable, for packing and 
movement expenses, in accordance with sections 773(a)(6)(A) and (B) of 
the Act. We also made adjustments for differences in cost attributable 
to differences in physical characteristics of the merchandise pursuant 
to section 773(a)(6)(C)(ii) of the Act and for circumstance-of-sales 
(COS) differences in accordance with 773(a)(6)(C)(iii) of the Act and 
section 351.410 of the Department's regulations. For comparisons to EP, 
we made COS adjustments to NV by deducting home market direct selling 
expenses (credit, warranties, and royalties) and adding U.S. direct 
selling expenses. For comparison to CEP, we made COS adjustments by 
deducting home market direct selling expenses pursuant to section 
773(a)(6)(C)(iii) of the Act and section 351.410 of the Department's 
regulations. We offset commissions paid on sales to the United States 
by the lesser of U.S. commissions or comparison (home) market indirect 
selling expenses.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determined NV based on sales in the comparison 
market at the same LOT as U.S. sales. The NV LOT is the level of the 
starting-price sale in the comparison market or, when NV is based on 
CV, the level of the sales from which we derive SG&A and profit. For 
EP, the U.S. LOT is also the level of the starting-price sale, which is 
usually

[[Page 53108]]

from exporter to importer. For CEP, 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, 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 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 an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, 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 ( 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 (November 19, 1997); see also 
Preliminary Results of Antidumping Duty Administrative Review: 
Stainless Steel Sheet and Strip in Coils From Italy, 68 FR 47032 
(August 7, 2003).
    In the current review, Dofasco claimed that sales in both the home 
market and the United States market were made at three LOTs. As 
discussed in detail in Dofasco Analysis Memo, to evaluate Dofasco's LOT 
claims, we examined information regarding the distribution systems in 
both the U.S. and Canadian markets, including the selling functions, 
classes of customer, and selling expenses for each respondent. As a 
result of our analysis, we have preliminarily concluded that Dofasco 
did sell at three different LOTs based on the selling functions 
performed. See Dofasco Analysis Memo. However, the Department did not 
find that there existed a pattern of consistent price differences 
between the three levels of trade. Therefore, we did not make LOT 
adjustments when comparing sales at different LOTs. For a detailed 
discussion, see Dofasco Analysis Memo.

Currency Conversion

    We made currency conversions pursuant to section 351.415 of the 
Department's regulations at the rates certified by the Federal Reserve 
Bank.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

------------------------------------------------------------------------
                                                                 Margin
        Manufacturer/Exporter               Time period        (percent)
------------------------------------------------------------------------
Dofasco Inc.........................  08/01/01-07/31/02......       0.62
------------------------------------------------------------------------

Duty Assessment and Cash Deposit Requirements

    The Department shall determine, and the BCBP shall assess, 
antidumping duties on all appropriate entries. The Department will 
issue appropriate appraisement instructions directly to the BCBP within 
15 days of publication of the final results of review. Furthermore, the 
following deposit rates will be effective with respects to all 
shipments of CORE from Canada entered, or withdrawn from warehouse, for 
consumption on or after the publication date of the final results, as 
provided for by section 751(a)(2)(c) of the Act: (1) For Dofasco, the 
cash deposit rate will be the rate established in the final results of 
this review; (2) for previously reviewed or investigated companies not 
listed above, the cash deposit rate will be the company-specific rate 
established for the most recent period; (3) if the exporter is not a 
firm covered in this review, a prior review, or the less-than-fair-
value (LTFV) investigation, but the manufacturer is, the cash deposit 
rate will be the rate established for the most recent period for the 
manufacturer of the subject merchandise; and (4) for all other 
producers and/or exporters of this merchandise, the cash deposit rate 
shall be the all other rate established in the LTFV investigation, 
which is 61.88 percent. See Amended Final Determinations of Sales at 
Less Than Fair Value and Antidumping Orders: Certain Corrosion-
Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon 
Steel Plate From Canada, 60 FR 49582 (September 26, 1995). These 
deposit rates, when imposed, shall remain in effect until publication 
of the final results of the next administrative review.

Public Comment

    Pursuant to 19 section 351.224(b) of the Department's regulations, 
the Department will disclose to parties to the proceeding any 
calculations performed in connection with these preliminary results 
within five days after the date of publication of this notice. Pursuant 
to section 351.309 of the Department's regulations, interested parties 
may submit written comments in response to these preliminary results. 
Case briefs are to be submitted within 30 days after the date of 
publication of this notice, and rebuttal briefs, limited to arguments 
raised in case briefs, are to be submitted no later than five days 
after the time limit for filing case briefs. Parties who submit 
arguments in this proceeding are requested to submit with the argument: 
(1) a statement of the issues, and (2) a brief summary of the argument. 
Case and rebuttal briefs must be served on interested parties in 
accordance with section 351.303(f) of the Department's regulations.
    Also, pursuant to section 351.310 of the Department's regulations, 
within 30 days of the date of publication of this notice, interested 
parties may request a public hearing on arguments to be raised in the 
case and rebuttal briefs. Unless the Secretary specifies otherwise, the 
hearing, if requested, will be held two days after the date for 
submission of rebuttal briefs. Parties will be notified of the time and 
location. The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any case or rebuttal brief, not later than 120 days after 
publication of these preliminary results, unless extended.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f) of the Department's regulations 
to file a certificate regarding the reimbursement of antidumping duties 
prior to liquidation of the relevant entries during this review period. 
Failure to comply with this requirement could result in the Secretary's 
presumption that reimbursement of antidumping duties occurred and the 
subsequent assessment of double antidumping duties.
    This administrative review and notice are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: September 2, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-22940 Filed 9-8-03; 8:45 am]
BILLING CODE 3510-DS-P