[Federal Register Volume 68, Number 235 (Monday, December 8, 2003)]
[Notices]
[Pages 68341-68348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30391]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-421-807]


Certain Hot-Rolled Carbon Steel Flat Products from the 
Netherlands; Preliminary Results of Antidumping Duty Administrative 
Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to requests from Nucor Corporation and Bethlehem 
Steel Corporation, National Steel Corporation,

[[Page 68342]]

and United States Steel Corporation (collectively, petitioners), the 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on certain hot-rolled carbon steel 
flat products (hot-rolled steel) from the Netherlands (A-421-807). This 
administrative review covers imports of subject merchandise from Corus 
Staal BV (Corus Staal). The period of review is May 3, 2001 through 
October 31, 2002.
    We preliminarily determine that sales of hot-rolled steel from the 
Netherlands in the United States have been made below normal value 
(NV). If these preliminary results are adopted in our final results of 
administrative review, we will instruct U.S. Customs and Border 
Protection (Customs) to assess antidumping duties based on the 
difference between the export price (EP) or constructed export price 
(CEP) and NV. Interested parties are invited to comment on these 
preliminary results. Parties who submit argument in this proceeding are 
requested to submit with the argument: (1) A statement of the issues, 
(2) a brief summary of the argument, and (3) a table of authorities.

EFFECTIVE DATE: December 8, 2003.

FOR FURTHER INFORMATION CONTACT: Deborah Scott or Robert James, 
Antidumping and Countervailing Duty Enforcement Group III, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230, telephone: (202) 482-2657 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 29, 2001, the Department published the antidumping duty 
order on certain hot-rolled carbon steel flat products from the 
Netherlands. See Antidumping Duty Order: Certain Hot-Rolled Carbon 
Steel Flat Products from the Netherlands, 66 FR 59565 (November 29, 
2001). On November 1, 2002, the Department published the opportunity to 
request administrative review of, inter alia, certain hot-rolled carbon 
steel flat products from the Netherlands for the period May 3, 2001 
through October 31, 2002. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 67 FR 66612 (November 1, 2002).
    In accordance with 19 CFR 351.213(b)(1), on November 26 and 27, 
2002,\1\ petitioners requested that we conduct an administrative review 
of sales of the subject merchandise made by Corus Staal. On December 
26, 2002, the Department published in the Federal Register a notice of 
initiation of this antidumping duty administrative review covering the 
period May 3, 2001 through October 31, 2002. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 67 FR 78772 
(December 26, 2002).
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    \1\ Nucor filed its request for administrative review on 
November 26, 2002, while Bethlehem Steel Corporation, National Steel 
Corporation, and United States Steel Corporation filed their request 
for review on November 27, 2002.
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    On January 9, 2003, the Department issued its antidumping duty 
questionnaire to Corus Staal. Corus Staal submitted its response to 
section A of the questionnaire on January 30, 2003, and its response to 
sections B, C, D, and E of the questionnaire on March 4, 2003. On March 
10, 2003, the Department issued a supplemental questionnaire for 
section A, to which Corus Staal responded on March 28, 2003. On March 
31, 2003, the Department issued a supplemental questionnaire for 
sections D and E of the questionnaire; Corus Staal submitted its 
response on April 21, 2003. On April 23, 2003, the Department issued a 
supplemental questionnaire for sections B and C of the questionnaire. 
Corus Staal filed its response to the supplemental questionnaire for 
sections B and C on May 19, 2003. We verified Corus Staal's submitted 
data as discussed below in the ``Verification'' section of this notice. 
Finally, on October 3, 2003, we issued a supplemental questionnaire 
requesting Corus Staal to report entered value data. Corus Staal 
responded to this request on October 17, 2003.
    Because it was not practicable to complete this review within the 
normal time frame, on June 19, 2003, we published in the Federal 
Register our notice of extension of time limit for this review. See 
Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands; 
Antidumping Duty Administrative Review; Extension of Time Limit, June 
19, 2003 (68 FR 36769). This extension established the deadline for 
these preliminary results as December 1, 2003.

Period of Review

    The POR is May 3, 2001, through October 31, 2002.

Scope of the Review

    For purposes of this order, the products covered are certain hot-
rolled carbon steel flat products of a rectangular shape, of a width of 
0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight lengths, 
of a thickness of less than 4.75 mm and of a width measuring at least 
10 times the thickness. Universal mill plate (i.e., flat-rolled 
products rolled on four faces or in a closed box pass, of a width 
exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not 
less than 4.0 mm, not in coils and without patterns in relief) of a 
thickness not less than 4.0 mm is not included within the scope of this 
review. Specifically included within the scope of this order are vacuum 
degassed, fully stabilized (commonly referred to as interstitial-free 
(IF)) steels, high strength low alloy (HSLA) steels, and the substrate 
for motor lamination steels. IF steels are recognized as low carbon 
steels with micro-alloying levels of elements such as titanium or 
niobium (also commonly referred to as columbium), or both, added to 
stabilize carbon and nitrogen elements. HSLA steels are recognized as 
steels with micro-alloying levels of elements such as chromium, copper, 
niobium, vanadium, and molybdenum. The substrate for motor lamination 
steels contains micro-alloying levels of elements such silicon and 
aluminum.
    Steel products to be included in the scope of this order, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTS), are products in which: (i) Iron predominates, by 
weight, over each of the other contained elements; (ii) the carbon 
content is 2 percent or less, by weight; and (iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or
2.25 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.15 percent of vanadium, or
0.15 percent of zirconium.

    All products that meet the physical and chemical description 
provided above are within the scope of this order unless otherwise 
excluded. The following products, by way of example, are outside or 
specifically excluded from the scope of this order:

[[Page 68343]]

    [sbull] Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above (including, e.g., ASTM 
specifications A543, A387, A514, A517, A506).
    [sbull] Society of Automotive Engineers (SAE)/American Iron and 
Steel Institute (AISI) grades of series 2300 and higher.
    [sbull] Ball bearings steels, as defined in the HTS.
    [sbull] Tool steels, as defined in the HTS.
    [sbull] Silico-manganese (as defined in the HTS) or silicon 
electrical steel with a silicon level exceeding 2.25 percent.
    [sbull] ASTM specifications A710 and A736.
    [sbull] USS Abrasion-resistant steels (USS AR 400, USS AR 500).
    [sbull] All products (proprietary or otherwise) based on an alloy 
ASTM specification (sample specifications: ASTM A506, A507).
    [sbull] Non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTS.
    The merchandise subject to this order is classified in the HTS at 
subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled flat-rolled carbon 
steel flat products covered by this order, including: vacuum degassed 
fully stabilized; high strength low alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTS 
subheadings are provided for convenience and U.S. Customs purposes, the 
written description of the scope of this order is dispositive.

Verification

    As provided in section 782(i) of the Tariff Act, we verified the 
cost and sales information provided by Corus Staal using standard 
verification procedures, including 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 cost and sales verification reports, 
which are on file in the Central Records Unit of the Department. The 
Department verified Corus Staal's cost responses from May 12, 2003, 
through May 16, 2003, and sales responses from June 16, 2003, through 
June 20, 2003. The Department also verified the value-added information 
reported by Corus Staal for Thomas Steel Strip Corporation (Thomas 
Steel) from August 21, 2003, through August 22, 2003. The results of 
these verifications are found in the cost verification report dated 
October 2, 2003, the Corus Staal sales verification report dated 
September 25, 2003, and the Thomas Steel value-added verification 
report dated October 1, 2003, on file in the Central Records Unit of 
the Department in room B-099 of the main Commerce building.

Affiliated-Party Sales Issues

    During the POR, Corus Staal sold the foreign like product to 
several affiliated resellers in the home market. These include Namascor 
BV (Namascor), a service center wholly-owned by Corus Staal, and Laura 
Metaal BV (Laura), a manufacturer and service center in which Corus 
Staal's parent company, Corus Nederland BV, has a shareholder interest. 
For purposes of our analysis, we used Namascor's and Laura's sales to 
unaffiliated customers, and, where Laura consumed the subject 
merchandise purchased from Corus Staal in its manufacturing operations, 
we used Corus Staal's sales to Laura. In addition, Corus Staal sold the 
foreign like product to Feijen Service Center, a business unit of Corus 
Service Center Maastricht (Feijen), and to Corus Vlietjonge BV 
(Vlietjonge),\2\ also a service center. Both Feijen and Vlietjonge are 
affiliated with Corus Staal through the former British Steel companies, 
whose parent, British Steel plc, merged with Koninklijke Hoogovens NV 
(now Corus Nederland BV) in October 1999 to form the Corus Group plc. 
In its January 30, 2003, response to the Department's January 9, 2003, 
questionnaire and in a letter dated April 9, 2003, Corus Staal 
requested an exemption from reporting downstream sales by Feijen and 
Vlietjonge because of the nature and quantity of the products sold. On 
April 16, 2003, the Department excused Corus Staal from reporting 
downstream sales by Feijen and Vlietjonge; therefore, we have used 
Corus Staal's sales to Feijen and Vlietjonge to perform our analysis.
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    \2\ Namascor also resold some of the foreign like product to 
Vlietjonge.
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    In the U.S. market, Corus Staal sold subject merchandise to Thomas 
Steel, a further manufacturer of battery-quality hot band steel. Thomas 
Steel is wholly-owned by Corus USA Inc., which in turn is wholly-owned 
by Corus Staal's parent company, Corus Nederland BV. Claiming the 
value-added in the United States by Thomas Steel exceeded substantially 
the value of the subject merchandise as imported, Corus Staal utilized 
the ``simplified reporting'' option for the merchandise further 
processed by Thomas Steel. Pursuant to section 772(e) of the Tariff 
Act, when the subject merchandise is imported by an affiliated person 
and the value added in the United States by the affiliated person is 
likely to exceed substantially the value of the subject merchandise, we 
will determine the constructed export price for such merchandise using 
the price of identical or other subject merchandise if there is a 
sufficient quantity of sales to provide a reasonable basis for 
comparison and we determine that the use of such sales is appropriate. 
If there is not a sufficient quantity of such sales or if we determine 
that using the price of identical or other subject merchandise is not 
appropriate, we may use any other reasonable basis to determine the 
constructed export price. See, e.g., Preliminary Results and Rescission 
in Part of Antidumping Duty Administrative Review: Gray Portland Cement 
and Clinker From Mexico, 67 FR 57379, 57381 (September 10, 2002) 
(unchanged for final results, 68 FR 1816 (January 14, 2003)). 
Consistent with the Department's regulations, we have determined for 
these preliminary results that the estimated value added in the United 
States by Thomas Steel accounted for at least 65 percent of the price 
charged to the first unaffiliated customer for the merchandise as sold 
in the United States, and therefore, the value added is likely to 
exceed substantially the value of the subject merchandise. We have also 
preliminarily determined there is a sufficient quantity of sales 
remaining to provide a reasonable basis for comparison and that we have 
no reason to believe another methodology would be appropriate. See the 
memorandum from Robert James and Richard Weible to Barbara E. Tillman, 
``Simplified

[[Page 68344]]

Reporting' and Value Added in the United States by Thomas Steel,'' 
dated July 3, 2003. See also the Thomas Steel value-added verification 
report at pages 1 to 13, which supports Corus Staal's claim that the 
value-added in the United States by Thomas Steel exceeded substantially 
the value of the subject merchandise as imported.

Fair Value Comparisons

    To determine whether sales of hot-rolled steel from the Netherlands 
to the United States were made at less than fair value, we compared the 
EP or CEP to the NV, as described in the ``Export Price and Constructed 
Export Price'' and ``Normal Value'' sections of this notice, below. In 
accordance with section 777A(d)(2) of the Tariff Act, we compared the 
EPs and CEPs of individual U.S. transactions to monthly weighted-
average NVs.

Product Comparisons

    In accordance with section 771(16) of the Tariff Act, we considered 
all products produced by the respondent, covered by the descriptions in 
the ``Scope of the Review'' section of this notice, to be foreign like 
products for the purpose of determining appropriate product comparisons 
to U.S. sales of hot-rolled steel from the Netherlands.
    We have relied on the following eleven criteria to match U.S. sales 
of subject merchandise to comparison-market sales of the foreign like 
product: whether painted or not, quality, carbon content level, yield 
strength, thickness, width, whether coil or cut-to-length sheet, 
whether temper rolled or not, whether pickled or not, whether mill or 
trimmed edge, and whether the steel is rolled with or without patterns 
in relief.
    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 next 
most similar foreign like product on the basis of the characteristics 
and reporting instructions listed in the Department's January 9, 2003, 
questionnaire.

Export Price and Constructed Export Price

    Section 772(a) of the Tariff Act defines EP as ``the price at which 
the subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the producer or exporter of the subject 
merchandise outside of the United States to an unaffiliated purchaser 
for exportation to the United States, as adjusted under subsection 
(c).'' Section 772(b) of the Tariff Act defines CEP as the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under sections 772(c) and 
(d).''
    In the instant review Corus Staal sold subject merchandise through 
two affiliated steel service centers which further manufacture flat-
rolled steel products: Rafferty-Brown Steel Co., Inc. of Connecticut 
and Rafferty-Brown Steel Co. of North Carolina (collectively, Rafferty 
Brown). Corus Staal reported each of these transactions as CEP 
transactions, and the remainder of its U.S. sales of subject 
merchandise as EP transactions. However, after reviewing the evidence 
on the record of this review, we have preliminarily determined that 
certain of Corus Staal's reported EP transactions are classified 
properly as CEP sales because these sales occurred in the United 
States. Such a determination is consistent with section 772(b) of the 
Tariff Act and the U.S. Court of Appeals for the Federal Circuit's 
(Federal Circuit's) decision in AK Steel Corp. et. al. v. United 
States, 226 F.3d 1361, 1374 (Fed. Cir. 2000) (AK Steel). In AK Steel, 
the Federal Circuit examined the definitions of EP and CEP, noting 
``the plain meaning of the language enacted by Congress in 1994 focuses 
on where the sale takes place and whether the foreign producer or 
exporter and the U.S. importer are affiliated, making these two factors 
dispositive of the choice between the two classifications.'' AK Steel 
at 1369. It also stated that ``the critical differences between EP and 
CEP sales are whether the sale or transaction takes place inside or 
outside the United States and whether it is made by an affiliate,'' and 
noted the phrase ``outside the United States'' had been added to the 
1994 statutory definition of EP (called ``purchase price'' in the pre-
1994 statute). AK Steel at 1368-70. Referring to the CEP definition, 
the AK Steel Court then defined the term ``seller'' as ``one who 
contracts to sell'' and the term ``sold'' as ``the transfer of 
ownership or title.'' AK Steel at 1371. Thus, the classification of a 
sale as either EP or CEP depends upon where the contract for sale was 
concluded (i.e., in or outside the United States) and whether the 
foreign producer or exporter is affiliated with the U.S. importer.
    During the POR Corus Staal executed all agreements with U.S. 
customers and amendments related to those agreements in the 
Netherlands. See Corus Staal's May 19, 2003, supplemental questionnaire 
response (May 19, 2003, SQR) at 2. Corus Staal also served as the 
importer of record for subject merchandise entered during the POR. See 
Corus Staal's January 30, 2003, questionnaire response (January 30, 
2003, QR) at A-15, footnote 10. However, prior to the start of the POR, 
agreements and amendments were signed by Corus America, Inc. (CAI). May 
19, 2003, SQR at 2. CAI is the entity through whom Corus Steel USA Inc. 
(CSUSA), a subsidiary of Corus Staal's parent company, Corus Nederland 
BV, has a contract to provide administrative and some selling functions 
on Corus Staal's behalf.\3\ See the January 30, 2003, QR at A-18 and 
the March 28, 2003 supplemental questionnaire response (March 28, 2003, 
SQR) at A-6. In these instances when CAI signed the agreements and 
amendments, CAI would draft the document and forward it to Corus Staal 
in the Netherlands for approval. After approving the draft document by 
dating and signing it, Corus Staal would send the document back to CAI, 
who would then sign and issue the final version to the customer. See 
Sales Verification Report at 4-5. Thus, some sales made during the 
second quarter of 2001 (i.e., from May 3 to June 30, 2001) were made 
subject to agreements and/or amendments signed by CAI in the United 
States. May 19, 2003, SQR at 2. Because the contracts for sales made 
during May and June 2001 were concluded in the United States, we find 
these sales to be CEP transactions within the meaning of section 772(b) 
of the Tariff Act.
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    \3\ CSUSA receives an income from Corus Staal for these 
services, which are provided by employees of CAI; CAI, in turn, 
bills CSUSA on a monthly basis. See the March 28, 2003, SQR at A-5 
and A-6.
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    With respect to the remainder of Corus Staal's reported EP sales 
(i.e., those sales to unaffiliated U.S. customers made between July 1, 
2001, and October 30, 2002), we have continued to classify them as EP 
transactions because the contracts governing these sales were signed by 
Corus Staal in the Netherlands and Corus Staal served as the importer 
of record.
    For those sales which we are classifying as EP transactions, we 
calculated the price of Corus Staal's EP sales in accordance with 
section 772(a) of the Tariff Act. We based EP on the packed, delivered, 
duty paid prices for export to end users and service centers in the 
U.S. market. We adjusted gross unit price for billing errors, freight 
revenue, certain minor processing expenses, and early payment 
discounts, where applicable. We also made deductions for movement 
expenses in

[[Page 68345]]

accordance with section 772(c)(2)(A) of the Tariff Act; these included, 
where appropriate, foreign inland freight, foreign brokerage and 
handling, international freight, U.S. customs duties, U.S. inland 
freight, and U.S. warehousing expenses.
    For those transactions categorized as CEP sales, we calculated 
price in conformity with section 772(b) of the Tariff Act. We based CEP 
on the packed, delivered or delivered, duty paid prices to unaffiliated 
purchasers in the United States. Where applicable, we made adjustments 
to gross unit price for billing errors, freight revenue, certain minor 
processing expenses, and early payment discounts. We also made 
deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Tariff Act; these included, where appropriate, 
foreign inland freight, foreign brokerage and handling, international 
freight, U.S. customs duties, U.S. inland freight, and U.S. warehousing 
expenses. In accordance with section 772(d)(1) of the Tariff Act, we 
deducted those selling expenses associated with economic activities 
occurring in the United States, including direct selling expenses 
(imputed credit, warranty expenses, and travel expenses incurred by 
Corus Staal's U.S. sales team), inventory carrying costs, and indirect 
selling expenses. For CEP sales, we also made an adjustment for profit 
in accordance with section 772(d)(3) of the Tariff Act. Finally, with 
respect to subject merchandise to which value was added in the United 
States by Rafferty Brown prior to sale to unaffiliated customers, we 
deducted the cost of further manufacture in accordance with section 
772(d)(2) of the Tariff Act.

Section 201 Duties

    The Department notes that merchandise subject to this review is 
subject to duties imposed under section 201 of the Trade Act of 1974, 
as amended (section 201 duties). Because the Department has not 
previously addressed the appropriateness of deducting section 201 
duties from EP and CEP, on September 9, 2003, the Department published 
a request for public comments on this issue (68 FR 53104). Comments 
were received by October 9, 2003, and rebuttal comments were received 
by November 7, 2003. Since the Department has not made a determination 
on this issue at this time, for purposes of these preliminary results, 
no adjustment has been made to EP and CEP.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Tariff Act, to 
the extent practicable, we determine NV based on sales in the 
comparison market at the same level of trade (LOT) as the CEP 
transaction. The NV LOT is that of the starting price of the comparison 
sales in the home market or, when NV is based on constructed value 
(CV), that of the sales from which we derive selling, general, and 
administrative (SG&A) expenses and profit. For EP, the LOT is also the 
level of the starting price sale, which is usually from the exporter to 
the 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 CEP 
sales, 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 a LOT adjustment under section 
773(a)(7)(A) of the Tariff 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 differences in the levels between NV 
and CEP sales affect price comparability, we adjust NV under section 
773(a)(7)(B) of the Tariff Act (i.e., the CEP offset provision).
    In implementing these principles in the instant review, we obtained 
information from Corus Staal about the marketing stages involved in its 
reported U.S. and home market sales, including a description of the 
selling activities performed by Corus Staal and the level to which each 
selling activity was performed for each channel of distribution. In 
identifying LOTs for U.S. CEP sales we considered the selling functions 
reflected in the starting price after any adjustments under section 
772(d) of the Tariff Act.
    In the home market, Corus Staal reported two channels of 
distribution (sales by Corus Staal and sales through its affiliated 
service centers Namascor and Laura) and three customer categories (end 
users, steel service centers, and trading companies). See, e.g., Corus 
Staal's January 30, 2003, QR at A-14. For both channels of distribution 
in the home market, Corus Staal performed similar selling functions, 
including strategic and economic planning, advertising, freight and 
delivery arrangements, technical/warranty services, and sales logistics 
support. The remaining selling activities performed did not differ 
significantly by channel of distribution, with the exception of market 
research and research and development activities, which were performed 
only by Corus Staal. See Corus Staal's January 30, 2003, QR at Exhibit 
A-8 and pages A-20 through A-34. Because channels of distribution do 
not qualify as separate levels of trade when the selling functions 
performed for each channel are sufficiently similar, we have determined 
that one LOT exists for Corus Staal's home market sales. In addition, 
we note that while Corus Staal initially claimed there were differences 
in LOT between home market direct sales and sales through home market 
affiliated service centers and, therefore, it was entitled to a LOT 
adjustment for U.S. sales compared to sales made by home market 
affiliated service centers, it later withdrew its claim. See Corus 
Staal's January 30, 2003, QR at A-17 and its May 19, 2003 SQR at 16.
    In the U.S. market, Corus Staal reported two channels of 
distribution for its sales of subject merchandise during the POR: EP 
sales made directly to unaffiliated U.S. customers and CEP sales made 
through its affiliated service centers, RBC and RBN. For sales 
classified as EP, Corus Staal reported two customer categories, end 
users and steel service centers. See, e.g., Corus Staal's January 30, 
2003, QR at A-15 and A-16. However, as explained in the ``Export Price 
and Constructed Export Price'' section of this notice, we have 
preliminary determined that certain of Corus Staal's reported EP 
transactions (i.e., sales from May 3, 2001, to June 30, 2001) are 
classified properly as CEP sales.
    With regard to CEP sales made through RBC and RBN, Corus Staal 
claimed that a CEP offset is appropriate because RBC's and RBN's sales 
are made at a point in the distribution process that is less advanced 
than Corus Staal's home market sales. See Corus Staal's January 30, 
2003, QR at A-17. As noted above, we determine the U.S. LOT on the 
basis of the CEP starting price minus the expenses and profit deducted 
pursuant to section 772(d) of the Tariff Act. In analyzing respondent's 
request for a CEP offset, we reviewed information provided in section A 
of Corus Staal's response regarding selling activities performed and 
services offered in the U.S. and foreign markets. We found there to be 
few differences in the selling functions performed by Corus Staal on 
its sales to affiliated service centers in the United States and those

[[Page 68346]]

performed on its sales to home market customers. For example, Corus 
Staal provided similar freight and delivery services, technical/
warranty assistance, and sales logistics support on its sales to home 
market customers and on its sales to RBC and RBN. See, e.g., Corus 
Staal's January 30, 2003, QR at pages A-20 through A-46. Therefore, the 
Department has preliminarily determined the record does not support 
Corus Staal's claim that home market sales are at a different, more 
advanced LOT than its CEP sales to RBC and RBN. Accordingly, no CEP 
offset adjustment to NV is warranted for Corus Staal's reported CEP 
sales.
    As to Corus Staal's sales to unaffiliated customers in the United 
States which we have reclassified as CEP transactions, we considered 
whether a LOT adjustment may be appropriate. As noted above, we have 
preliminary determined that one LOT exists in the home market, and 
therefore, there is no basis upon which to determine whether there is a 
pattern of consistent price differences between LOTs. Thus, we examined 
whether Corus Staal's home market sales were at a different, more 
advanced LOT than its sales to U.S. unaffiliated customers to determine 
whether a CEP offset was necessary. Comparing the selling activities 
performed and services offered by Corus Staal on its sales to 
unaffiliated customers in the United States to those activities 
performed on its home market sales, we found there to be few 
differences in the selling functions performed by Corus Staal on its 
sales to unaffiliated customers in the United States and those 
performed for sales in the home market. For example, on sales to both 
home market customers and to unaffiliated U.S. customers, Corus Staal 
provided similar strategic and economic planning, freight and delivery 
services, technical/warranty assistance, research and development, and 
sales logistics support. See, e.g., Corus Staal's January 30, 2003, QR 
at pages A-20 through A-46. As a result, we preliminarily find that 
there is not a significant difference in selling functions performed in 
the U.S. and foreign markets on these sales. Thus, we find that Corus 
Staal's home market sales and sales to unaffiliated customers in the 
United States were made at the same LOT; accordingly, no CEP offset 
adjustment is warranted.
    Finally, for those sales which we are continuing to classify as EP, 
we considered whether a LOT adjustment is warranted. Again, comparing 
the selling activities performed and services offered by Corus Staal on 
its sales to unaffiliated customers in the United States to those 
activities performed on its home market sales, we found there to be few 
differences in the selling functions performed by Corus Staal. Thus, we 
find that Corus Staal's home market sales and sales to unaffiliated 
customers in the United States were made at the same LOT, and 
therefore, no LOT adjustment is necessary.

Normal Value

A. Selection of Comparison Market

    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 
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)(B) of the Tariff 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 the home market was 
viable. See, e.g., Corus Staal's January 30, 2003, QR at Attachment A-
2.

B. Affiliated Party Transactions and Arm's-Length Test

    Corus Staal reported that it made sales in the home market to 
affiliated resellers and end-users. Sales to affiliated customers in 
the home market not made at arm's-length prices are excluded from our 
analysis because we consider them to be outside the ordinary course of 
trade. See 19 CFR 351.102(b). Prior to performing the arm's-length 
test, we aggregated multiple customer codes reported for individual 
affiliates in order to treat them as single entities. See Antidumping 
Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 
FR 69186, 69194 (November 15, 2002) (Modification to Affiliated Party 
Sales). To test whether the sales to affiliates were made at arm's 
length prices, we compared on a model-specific basis the starting 
prices of sales to affiliated and unaffiliated customers net of all 
direct selling expenses, discounts and rebates, movement charges, and 
packing. Where prices to the affiliated party were, on average, within 
a range of 98 to 102 percent of the price of identical or comparable 
merchandise to the unaffiliated parties, we determined that the sales 
made to the affiliated party were at arm's length. See Modification to 
Affiliated Party Sales at 69187-88. In accordance with the Department's 
practice, we only included in our margin analysis those sales to 
affiliated parties that were made at arm's length.

C. Cost of Production Analysis

    Because we disregarded sales of certain products made at prices 
below the cost of production (COP) in the investigation of hot-rolled 
steel from the Netherlands (see Notice of Final Determination of Sales 
at Less Than Fair Value; Certain Hot-Rolled Carbon Steel Flat Products 
From The Netherlands, 66 FR 50408 (October 3, 2001), as amended, Notice 
of Amended Final Determination of Sales at Less Than Fair Value; 
Certain Hot-Rolled Carbon Steel Flat Products From The Netherlands, 66 
FR 55637 (November 2, 2001)), we have reasonable grounds to believe or 
suspect that Corus Staal made sales of the foreign like product at 
prices below the COP, as provided by section 773(b)(2)(A)(ii) of the 
Tariff Act. Therefore, pursuant to section 773(b)(1) of the Tariff Act, 
we initiated a COP investigation of sales by Corus Staal.
    In accordance with section 773(b)(3) of the Tariff Act, we 
calculated the weighted-average COP for each model based on the sum of 
Corus Staal's material and fabrication costs for the foreign like 
product, plus amounts for SG&A and packing costs. The Department relied 
on the COP data reported by Corus Staal, except as noted below:
    --For merchandise produced at the direct sheet plant (DSP), Corus 
Staal claimed a start-up adjustment for the entire POR. Having 
determined that the startup period ended on November 30, 2001, we 
decreased Corus Staal's claimed startup adjustment accordingly. In 
addition, for DSP products, we amortized the capital cost (the startup 
adjustment allowed) of the DSP line over a ten-year period and included 
11 months of amortization cost in the total cost of manufacture (TCOM).
    --We adjusted Corus Staal's reported standard cost because 
respondent overstated the amount of general and administrative (G&A) 
expenses that should have been removed from the standard cost.
    --We revised the G&A ratio to exclude the G&A expenses accounted 
for in the standard cost and to include two adjustments identified on 
the first day of the cost verification.
    --We adjusted Corus Staal's TCOM to reflect the unexplained 
difference found in its cost reconciliation at the cost verification.
    For further detail regarding these adjustments, see the 
Department's ``Cost of Production and Constructed Value

[[Page 68347]]

Calculation Adjustments for the Preliminary Results'' (COP Analysis 
Memorandum), dated December 1, 2003.
    Corus Staal reported separate COPs to distinguish between identical 
CONNUMs produced in both its conventional hot-rolling mill and direct 
sheet plant. For purposes of our analysis, however, we are not 
distinguishing between products produced at the two facilities, because 
the type of facility used to produce the subject merchandise is not one 
of the criteria used to match U.S. sales of subject merchandise to 
sales of the foreign like product. For a list of the product 
characteristics considered in our analysis, see the section ``Product 
Comparisons'' above. Thus, we weight-averaged the COPs reported for 
identical products produced in both the conventional hot-rolling mill 
and direct sheet plant.\4\ We then compared the weighted-average COP 
figures to the home market sales prices of the foreign like product as 
required under section 773(b) of the Tariff Act, to determine whether 
these sales had been made at prices below COP. On a product-specific 
basis, we compared the COP to home market prices net of billing 
adjustments, freight revenue, certain minor processing expenses, 
discounts and rebates, and any applicable movement charges.
---------------------------------------------------------------------------

    \4\ We also eliminated the distinction between conventional hot-
rolled mill and direct sheet plant products in Corus Staal's home 
market and U.S. sales databases.
---------------------------------------------------------------------------

    In determining whether to disregard home market sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) of the Tariff Act: whether, within an extended 
period of time, such sales were made in substantial quantities; and 
whether such sales were made at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade. Pursuant to section 773(b)(2)(C) of the Tariff Act, where less 
than 20 percent of the respondent's home market sales of a given model 
were at prices below the COP, we did not disregard any below-cost sales 
of that model because we determined that the below-cost sales were not 
made within an extended period of time and in ``substantial 
quantities.'' Where 20 percent or more of the respondent's home market 
sales of a given model were at prices less than COP, we disregarded the 
below-cost sales because: (1) They were made within an extended period 
of time in ``substantial quantities,'' in accordance with sections 
773(b)(2)(B) and (C) of the Tariff Act, and (2) based on our comparison 
of prices to the weighted-average COPs for the POR, they were at prices 
which would not permit the recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Tariff 
Act.
    Our cost test for Corus Staal revealed that for home market sales 
of certain models, less than 20 percent of the sales of those models 
were at prices below the COP. We therefore retained all such sales in 
our analysis and used them as the basis for determining NV. Our cost 
test also indicated that for certain models, more than 20 percent of 
the home market sales of those models were sold at prices below COP 
within an extended period of time and were at prices which would not 
permit the recovery of all costs within a reasonable period of time. 
Thus, in accordance with section 773(b)(1) of the Tariff Act, we 
excluded these below-cost sales from our analysis and used the 
remaining above-cost sales as the basis for determining NV.

D. Constructed Value

    In accordance with section 773(e) of the Tariff Act, we calculated 
CV based on the sum of the Corus Staal's material and fabrication 
costs, SG&A expenses, profit, and U.S. packing costs. We calculated the 
COP component of CV and weight-averaged the CVs reported for identical 
products produced in both the conventional hot-rolling mill and direct 
sheet plant as described above in the ``Cost of Production Analysis'' 
section of this notice. In accordance with section 773(e)(2)(A) of the 
Tariff 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 
actual weighted-average home market direct and indirect selling 
expenses.

E. Price-to-Price Comparisons

    We calculated NV based on prices to unaffiliated customers or 
prices to affiliated customers we determined to be at arm's length. We 
adjusted gross unit price for billing adjustments, discounts, rebates, 
freight revenue, and certain minor processing expenses, where 
appropriate. We made deductions, where appropriate, for foreign inland 
freight and warehousing, pursuant to section 773(a)(6)(B) of the Tariff 
Act. In addition, we made adjustments for differences in cost 
attributable to differences in physical characteristics of the 
merchandise (i.e., difmer) pursuant to section 773(a)(6)(C)(ii) of the 
Tariff Act and 19 CFR 351.411, as well as for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410. We made COS 
adjustments for imputed credit expenses (offset by interest revenue), 
warranty expenses, and credit insurance. Finally, we deducted home 
market packing costs and added U.S. packing costs in accordance with 
sections 773(a)(6)(A) and (B) of the Tariff Act.

F. Price-to-CV Comparisons

    In accordance with section 773(a)(4) of the Tariff Act, we based NV 
on CV if we were unable to find a home market match of such or similar 
merchandise. Where appropriate, we made adjustments to CV in accordance 
with section 773(a)(8) of the Tariff Act. Where we compared CV to CEP, 
we deducted from CV the weighted-average home market direct selling 
expenses.

Currency Conversion

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

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period May 3, 2001, through October 31, 
2002, to be as follows:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Corus Staal BV (Corus Staal)...............................         5.34
------------------------------------------------------------------------

    The Department will disclose calculations performed in connection 
with these preliminary results of review within five days of the date 
of publication of this notice in accordance with 19 CFR 351.224(b). 
Interested parties may submit case briefs and/or written comments no 
later than 30 days after the date of publication of these preliminary 
results of review. Rebuttal briefs and rebuttals to written comments, 
limited to issues raised in the case briefs and comments, may be filed 
no later than 35 days after the date of publication of this notice. 
Parties who submit argument in these proceedings are requested to 
submit with the argument: (1) A statement of the issue, (2) a brief 
summary of the argument, and (3) a table of authorities. An interested 
party may request a hearing within 30 days of publication. See CFR 
351.310(c). Any hearing, if requested, will be held 37 days after the 
date of

[[Page 68348]]

publication, or the first business day thereafter, unless the 
Department alters the date per 19 CFR 351.310(d). The Department will 
issue the final results of these preliminary results, including the 
results of our analysis of the issues raised in any such written 
comments or at a hearing, within 120 days of publication of these 
preliminary results.

Assessment Rates

    Upon completion of this administrative review, the Department will 
determine, and Customs shall assess, antidumping duties on all 
appropriate entries. As a result of the Court of International Trade's 
decision in Corus Staal BV et al v. United States, Consol. Court No. 
02-00003, Slip Op. 03-127 (CIT September 29, 2003), we will not assess 
duties on merchandise that entered between October 30, 2001 and 
November 28, 2001, inclusive. For more information, see Certain Hot-
Rolled Carbon Steel Flat Products From The Netherlands: Notice of Final 
Court Decision and Suspension of Liquidation, 68 FR 60912 (October 24, 
2003). Thus, in accordance with 19 CFR 351.212(b)(1), we will calculate 
an importer-specific ad valorem assessment rate for merchandise based 
on the ratio of the total amount of antidumping duties calculated for 
the examined sales made during the POR to the total customs value of 
the sales used to calculate those duties less the total customs value 
of the sales of merchandise that entered between October 30, 2001, and 
November 28, 2001, inclusive. This rate will be assessed uniformly on 
all entries of that particular importer made during the periods May 3, 
2001, through October 29, 2001, and November 29, 2001, through October 
31, 2002. The Department will issue appropriate assessment instructions 
directly to Customs within 15 days of publication of the final results 
of review.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Tariff Act: (1) The cash deposit rate for the reviewed 
company will be the rate established in the final results of the 
administrative review (except that no deposit will be required if the 
rate is zero or de minimis, i.e., less than 0.5 percent); (2) if the 
exporter is not a firm covered in this review, or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the most recent period for the manufacturer of the 
merchandise; and (3) if neither the exporter nor the manufacturer is a 
firm covered in this review, any previous reviews, or the LTFV 
investigation, the cash deposit rate will be 2.59 percent, the ``all 
others'' rate established in the LTFV investigation. See Antidumping 
Duty Order: Certain Hot-Rolled Carbon Steel Flat Products from the 
Netherlands, 67 FR 59565 (November 29, 2001).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: December 1, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-30391 Filed 12-5-03; 8:45 am]
BILLING CODE 3510-DS-P