[Federal Register Volume 69, Number 112 (Thursday, June 10, 2004)]
[Notices]
[Pages 32501-32508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13069]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-423-808]


Stainless Steel Plate in Coils From Belgium: Preliminary Results 
of Antidumping Duty Administrative Review

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

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on stainless steel 
plate in coils (SSPC) from Belgium in response to a request by 
petitioners, Allegheny Ludlum, AK Steel Corporation, Butler Armco 
Independent Union, United Steelworkers of America, AFL-CIO/CLC, and 
Zanesville Armco Independent Organization (collectively, petitioners). 
This review covers sales of subject merchandise to the United States 
during the period of May 1, 2002, through April 30, 2003.
    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,

[[Page 32502]]

we will instruct U.S. Customs and Border Protection (CBP) to assess 
antidumping duties based on the difference between the 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.

DATES: Effective Date: June 10, 2004.

FOR FURTHER INFORMATION CONTACT: Scot Fullerton 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) 482-1386 or (202) 482-0197, respectively.

Background

    The Department published the antidumping duty order on SSPC from 
Belgium in the Federal Register on May 21, 1999 (64 FR 27756). On May 
1, 2003, the Department published a notice of opportunity to request 
administrative review of the antidumping duty order on SSPC from 
Belgium (68 FR 23281). On May 30, 2003, the Department received a 
timely request for an administrative review of this order from 
petitioners. On July 1, 2003, we published a notice initiating an 
administrative review of SSPC for ALZ, N.V. (ALZ) and its affiliate 
Arcelor International America, Inc.\1\ See Initiation of Antidumping 
and Countervailing Duty Administrative Reviews and Requests for 
Revocation in Part, 68 FR 39055 (July 1, 2003).
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    \1\ Petitioners requested a review of ALZ and its affiliate 
Arcelor International America, Inc. U&A Belgium claims to be the 
successor of ALZ N.V. We are making a determination as to whether 
U&A Belgium is the successor for ALZ N.V. in this review.
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    On December 30, 2003, the Department extended the deadline for the 
preliminary results of this antidumping duty administrative review from 
January 30, 2004, until no later than 365 days from the last day of the 
anniversary month of the order. Since this date falls on a weekend and 
the next business day is a holiday, the due date is June 1, 2004. See 
Notice of Extension of Time Limit for Preliminary Results of the 
Antidumping Duty Administrative Review: Stainless Steel Plate in Coils 
from Belgium, 68 FR 75212 (December 30, 2003). Due to the unexpected 
emergency closure of the main Commerce building on Tuesday, June 1, 
2004, the Department has tolled the deadline for these preliminary/
final results by one day to June 2, 2004. On May 10, 2004, petitioners 
submitted comments on U&A Belgium's original and first supplemental 
questionnaire responses. Because these comments were not submitted in 
time to fully consider them for these preliminary results, we will 
continue to consider these comments for the final results of this 
review.

Scope of the Antidumping Duty Order

    Effective March 11, 2003, in accordance with Allegheny Ludlum Corp. 
v. United States, 287 F.3d 1365 (Fed. Cir. 2002) remanded to CIT No. 
99-06-00361, slip op. 2002-147 (CIT Dec. 12, 2002), and Notice of 
Amended Antidumping Duty Orders: Certain Stainless Steel Plate in Coils 
from Belgium, Canada, Italy, the Republic of Korea, South Africa, and 
Taiwan, 68 FR 11520 (March 11, 2003), the scope of this order was 
amended. Therefore, for purposes of this review, there were separate 
scopes in effect. These scopes are set forth below. Respondent has 
appropriately reported only those U.S. sales during the relevant period 
covered by each scope.

Scope of Order From May 1, 2002, Through March 10, 2003

    The product covered by this order is certain stainless steel plate 
in coils. Stainless steel is an alloy steel containing, by weight, 1.2 
percent or less of carbon and 10.5 percent or more of chromium, with or 
without other elements. The subject plate products are flat-rolled 
products, 254 mm or over in width and 4.75 mm or more in thickness, in 
coils, and annealed or otherwise heat treated and pickled or otherwise 
descaled. The subject plate may also be further processed (e.g., cold-
rolled, polished, etc.) provided that it maintains the specified 
dimensions of plate following such processing. Excluded from the scope 
of this order are the following: (1) Plate not in coils, (2) plate that 
is not annealed or otherwise heat treated and pickled or otherwise 
descaled, (3) sheet and strip, and (4) flat bars. In addition, certain 
cold-rolled stainless steel plate in coils is also excluded from the 
scope of this order. The excluded cold-rolled stainless steel plate in 
coils is defined as that merchandise which meets the physical 
characteristics described above that has undergone a cold-reduction 
process that reduced the thickness of the steel by 25 percent or more, 
and has been annealed and pickled after this cold reduction process.
    The merchandise subject to this order is currently classifiable in 
the Harmonized Tariff Schedule of the United States (HTS) at 
subheadings: 7219110030, 7219110060, 7219120005, 7219120020, 
7219120025, 7219120050, 7219120055, 7219120065, 7219120070, 7219120080, 
7219310010, 7219900010, 7219900020, 7219900025, 7219900060, 7219900080, 
7220110000, 7220201010, 7220201015, 7220201060, 7220201080, 7220206005, 
7220206010, 7220206015, 7220206060, 7220206080, 7220900010, 7220900015, 
7220900060, and 7220900080. Although the HTS subheadings are provided 
for convenience and Customs purposes, the written description of the 
scope of this order is dispositive.

Scope of Order On or After March 11, 2003

    The product covered by this order is certain stainless steel plate 
in coils. Stainless steel is an alloy steel containing, by weight, 1.2 
percent or less of carbon and 10.5 percent or more of chromium, with or 
without other elements. The subject plate products are flat-rolled 
products, 254 mm or over in width and 4.75 mm or more in thickness, in 
coils, and annealed or otherwise heat treated and pickled or otherwise 
descaled. The subject plate may also be further processed (e.g., cold-
rolled, polished, etc.) provided that it maintains the specified 
dimensions of plate following such processing. Excluded from the scope 
of this order are the following: (1) Plate not in coils, (2) plate that 
is not annealed or otherwise heat treated and pickled or otherwise 
descaled, (3) sheet and strip, and (4) flat bars.
    The merchandise subject to this order is currently classifiable in 
the HTS at subheadings: 7219.11.00.30, 7219.11.00.60, 7219.12.00.06, 
7219.12.00.21, 7219.12.00.26, 7219.12.00.51, 7219.12.00.56, 
7219.12.00.66, 7219.12.00.71, 7219.12.00.81, 7219.31.00.10, 
7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 
7219.90.00.80, 7220.11.00.00, 7220.20.10.10, 7220.20.10.15, 
7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10, 
7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.90.00.10, 
7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTS 
subheadings are provided for convenience and Customs purposes, the 
written description of the merchandise subject to these orders is 
dispositive.

Analysis

Affiliation of Parties

    U&A Belgium reported that ALZ's parent company Arbed S.A. (Arbed) 
was acquired by Arcelor S.A. (Arcelor).

[[Page 32503]]

Pursuant to section 771(33)(E) of the Tariff Act of 1930, as amended 
(the Act), the Department preliminarily finds that Arcelor is 
affiliated with Arbed, by virtue of the merger of those entities and 
Arcelor's acquisition of 99.45 percent of Arbed.\2\ ALZ, a Belgian 
stainless steel producer, and the original respondent in this case, was 
a subsidiary of Arbed. As a result of the merger, the Arcelor Group 
created a new unit that combined Ugine S.A., a French stainless steel 
producer, and ALZ. The new business unit, called Ugine & ALZ, is part 
of Arcelor's stainless steel flat sector. As such, the former ALZ now 
operates as U&A Belgium. See Successorship section, below.\3\ Further, 
effective February 2002, Arcelor also merged with Usinor S.A. (Usinor) 
and Aceralia Corporacion Siderurgica, S.A. (Aceralia), acquiring 97.58 
percent and 95.03 percent of the companies' shares, respectively.\4\
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    \2\ See Section A response of September 11, 2003, at 1 and 
Exhibit A-17B, at 38. For percent ownership refer to the first 
supplemental response of March 22, 2004, Exhibit S1-A-17.
    \3\ See page S1-4 of the first supplemental response.
    \4\ See page A-1 of the section A response, dated September 11, 
2003, and Exhibit A-17B, page 38.
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    According to section 771(33)(E) of the Act, any person directly or 
indirectly owning, controlling, or holding with power to vote, five 
percent or more of the outstanding voting stock or shares of any 
organization and such organization shall be considered affiliated. 
Since Arcelor owns 99.45 percent of Arbed's shares, 97.58 percent of 
Usinor's shares, and 95.03 percent of Aceralia's shares, it directly 
owns more than five percent of the shares of these companies. According 
to section 771(33)(F) of the Act, two or more persons directly or 
indirectly controlling, controlled by, or under common control with, 
any person, shall be considered affiliated. Therefore, the Department 
preliminarily finds that Arbed is affiliated with Usinor and Aceralia 
by virtue of the merger with and common ownership by Arcelor. Moreover, 
we preliminarily find this affiliation between Arbed and Arcelor, 
Usinor, and Aceralia and their subsidiaries to be effective as of 
February 28, 2002.\5\
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    \5\ Id. At 11 and page S1-A4 of the supplemental response.
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Successorship

    U&A Belgium reported that ALZ, which was the respondent in the 
original investigation and subsequent reviews, changed its name on 
December 31, 2001, prior to the period of review, to U&A Belgium. See 
Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Plate in Coils from Belgium (SSPC LTFV Investigation), 
(March 31, 1999) 64 FR 15476; see also Stainless Steel Plate in Coils 
From Belgium; Final Results of Antidumping Duty Administrative Review, 
(SSPC Belgium 00/01) 67 FR 64352 (October 18, 2002). As requested by 
U&A Belgium, we have conducted a successor in interest analysis during 
this administrative review because the sales of SSPC were made under 
the name of U&A Belgium during this POR.
    The Department is making this successorship determination in order 
to apply the appropriate and necessary company-specific assessment and 
cash deposit rates. In determining whether U&A Belgium is the successor 
to ALZ for purposes of applying the antidumping duty law, the 
Department examines a number of factors, including, but not limited to, 
changes in: (1) Management, (2) production facilities, (3) suppliers, 
and (4) customer base. See, e.g., Notice of Final Results of 
Antidumping Duty Administrative Review: Stainless Steel Sheet and Strip 
in Coils From France, 68 FR 69379 (December 12, 2003) (SSSS from 
France); Brass Sheet and Strip from Canada; Final Results of 
Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 1992) 
(Brass from Canada); Industrial Phosphoric Acid From Israel; Final 
Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944 
(February 14, 1994); and Steel Wire Strand for Prestressed Concrete 
from Japan: Final Results of Changed Circumstances Antidumping Duty 
Administrative Review, 55 FR 28796 (July 13, 1990). While examining 
these factors alone will not necessarily provide a dispositive 
indication of succession, the Department will generally consider one 
company to have succeeded another if that company's operations are 
essentially inclusive of the predecessor's operations. See Brass from 
Canada. Thus, if the evidence demonstrates, with respect to the 
production and sale of the subject merchandise, that the new company is 
essentially the same business operation as the former company, the 
Department will assign the new company the cash deposit rate of its 
predecessor.
    The evidence on the record, including U&A Belgium's company 
brochures, customer lists, and lists of suppliers, and the information 
provided in U&A Belgium's March 22, 2004, supplemental response, 
demonstrates that, with respect to the production and sale of the 
subject merchandise, U&A Belgium is the successor to ALZ. Specifically, 
the evidence on the record indicates that, under the Arcelor umbrella, 
U&A Belgium retained the ownership structure of ALZ, and continued to 
be a separate company, incorporated in Belgium. The record further 
indicates that U&A Belgium has the same SSPC production facilities and 
the same customer and supplier base as ALZ had. However, the management 
structure and board of directors experienced some changes due to the 
merger of Arbed into the Arcelor Group.\6\ We reviewed U&A Belgium's 
organizational structure at the time of the merger and after the 
streamlining/centralization of certain administrative and selling 
functions with U&A France \7\, and found that there were only minimal 
changes.\8\ Therefore, we peliminarily find that U&A Belgium is the 
successor to ALZ for purposes of this antidumping proceeding.
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    \6\ See First supplemental response at S1-4 through S1-10, and 
Exhibits S1-A2 through S1-A4.
    \7\ See A-17 of the September 11, 2003, section A response. U&A 
France is owned by Usinor S.A. (67.33 percent) and Valinter (32.37 
percent). Valinter, in turn, is wholly owned by Usinor Industeel 
S.A., which is wholly owned by Usinor S.A.
    \8\ See pages A-8 through A-10 and Exhibits A-2 through A-3 of 
the September 11, 2003, secton A response.
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Start-Up Adjustment

    U&A Belgium stated that during the review period, it implemented a 
pre-existing plan to expand the melt capacity of its Genk facility, and 
claimed a start-up adjustment for its expansion and renovation. 
Specifically, U&A Belgium reports that it built a new electric-arc 
furnace (EAF), and relined and retooled the existing EAF from being a 
fixed vessel to an exchangeable vessel. U&A Belgium further replaced 
its MRP converter to an AOD converter, and improved its continuous 
casting capabilities by replacing its fixed-width continuous caster 
with a variable-width caster. Specifically, section 773(f)(1)(C)(ii) of 
the Act states that the Department shall make an adjustment for startup 
costs where the following two conditions are met: (1) A producer is 
using new production facilities or producing a new product that 
requires substantial additional investment, and (2) the production 
levels are limited by technical factors associated with the initial 
phase of commercial production. The Statement of Administrative Action 
accompanying the URAA, H.R. Doc. No. 103-316, Vol. I, (1994) at 836 
(SAA), provides further guidance as to what constitutes a new 
production facility or a new product.
    We have examined U&A Belgium's claim and determined that the 
criteria for granting a startup adjustment within the meaning of 
section 773(f)(1)(C) of

[[Page 32504]]

the Act have not been satisfied in this case. The installation of a new 
EAF and the relining and retooling of the existing EAF, from being a 
fixed vessel to an exchangeable vessel; the replacing of an MRP 
converter with an AOD converter; as well as the replacing of a fixed-
width continuous caster with a variable-width caster; does not 
constitute a ``new production facility,'' nor is U&A Belgium producing 
a ``new product'' that required substantial additional investment, 
within the meaning of section 773(f)(1)(C)(ii)(I) of the Act. Rather, 
the addition of a new production line within an already existing 
facility is a ``mere improvement'' that the SAA at 835 states will not 
qualify for a startup adjustment. Likewise, an expansion of the current 
production capacity of a facility will not qualify unless it requires 
the construction of a new facility. Moreover, U&A Belgium has not 
identified the actual costs associated with ``substantially retooling'' 
its existing facility. Section 773(f)(1)(C)(ii) of the Act establishes 
that both prongs of the startup test i.e., (1) a producer is using new 
production facilities or producing a new product, and (2) production 
levels are limited by technical factors, must be met to warrant a 
startup adjustment. Therefore, we are not making an adjustment for 
startup in this case. Based upon our preliminary determination as to 
the first prong of the analysis, we need not address U&A Belgium's 
claims concerning technical factors that limit production levels under 
the second prong of section 773(F)(1)(c)(ii) of the Act, as both prongs 
must be met for granting a startup adjustment. See e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Certain 
Preserved Mushrooms From Chile, 63 FR 41786, 41788 (August 5, 1998).

Country of Origin

    Petitioners argue that SSPC hot-rolled by U&A Belgium's German 
affiliate, and subsequently pickled and annealed in Belgium, is Belgian 
merchandise and should be included in the analysis of U&A Belgium's 
sales for purposes of this review. Petitioners claim that the German 
affiliate cannot be considered the producer, as the hot-rolling by the 
German affiliate is performed pursuant to a tolling arrangement. 
Petitioners claim that the hot-rolling does not change the country of 
origin since the German company neither takes title to the merchandise 
nor controls the relevant sale of the subject merchandise. In support 
of their position, petitioners cite the Department's regulations, at 19 
CFR 351.401(h).\9\
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    \9\ Treatment of subcontractors (``tolling'' operations). The 
Secretary will not consider a toller or subcontractor to be a 
manufacturer or producer where the toller or subcontractor does not 
acquire ownership, and does not control the relevant sale of the 
subject merchandise or foreign like product.
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    Petitioners further state that, in Stainless Steel Bar from India: 
Preliminary Results of New Shipper Antidumping Administrative Review, 
66 FR 13496 (March 6, 2001), the Department determined that an Indian 
company was the producer of merchandise that had been toll-rolled by an 
unaffiliated subcontractor, where the Indian company (1) produced all 
of the inputs, (2) paid the subcontractor a processing fee for the toll 
services, and (3) maintained ownership at all times of the inputs as 
well as of the final product. See Petitioners' December 15, 2003, 
Comments. See also, Petitioners' May 12, 2004, Comments. Petitioners 
state that, in this proceeding, U&A Belgium purchases all the inputs 
used to produce the merchandise, maintains ownership at all times of 
the inputs as well as of the final product, and is invoiced for 
services performed by its German affiliate pursuant to the tolling 
arrangement. Therefore, petitioners claim, the German affiliate cannot 
be considered the producer, and Belgium must be the country of origin.
    U&A Belgium objects to the inclusion of sales of SSPC that have 
been hot-rolled by its German affiliate, as it claims the material is 
of German origin, and therefore outside the scope of this review. U&A 
Belgium states that the material is of German origin, as Germany is 
where substantial transformation of the merchandise occurs. U&A Belgium 
cites Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Sheet and Strip In Coils from the U.K. (SSSS UK), 64 FR 
30688 (June 9, 1999), where the Department determined that British 
slabs hot-rolled in Sweden before being returned to the United Kingdom 
for finishing were excluded from the scope of that review because the 
hot-rolling process constitutes substantial transformation. U&A Belgium 
argues that country of origin for merchandise produced in more than one 
country is not linked to the country in which the producer is located 
but, rather, is always determined by where the last substantial 
transformation occurred. See U&A Belgium April 5, 2004, Supplemental 
Questionnaire Response, pages 3-4.
    U&A Belgium argues that the substantial transformation which 
occurred in Germany, conferring country of origin on Germany, is not 
affected by the fact the hot-rolling was performed pursuant to a 
tolling arrangement with U&A Belgium. It states that the Department has 
already addressed the issue of whether the country of origin of a 
particular product can be transformed through a tolling process in 
Final Scope Ruling on Antidumping Order on Polyvinyl Alcohol from 
Taiwan, December 19, 1996. See U&A Belgium April 5, 2004, Supplemental 
Questionnaire Response, at pages 5-6. U&A Belgium states that in that 
case, a U.S. manufacturer shipped merchandise to a toll processor in 
Taiwan that performed two chemical processes, the second of which 
transformed the product into subject merchandise. U&A Belgium further 
argues that the fact that the merchandise was processed through a 
tolling arrangement did not affect the Department's determination that 
the chemical processes did constitute substantial transformation and, 
therefore, that the merchandise was of Taiwan origin, and within the 
scope of the review. U&A Belgium states that the U.S. manufacturer 
appealed the issue to the U.S. Court of International Trade (CIT), 
which upheld the Department's determination. U&A Belgium states that 
the CIT held that the use of the substantial transformation test to 
determine a product's country of origin was a reasonable interpretation 
of the antidumping statute.
    For purposes of these preliminary results, we have considered the 
record evidence and arguments, submitted by petitioners and respondent, 
addressing the treatment of U&A Belgium's SSPC, which were hot-rolled 
in Germany. As summarized above, petitioners and respondent have 
commented on the treatment of the merchandise hot-rolled in Germany, in 
the context of this order's scope, the Department's tolling regulation, 
and substantial transformation. Considering the specific facts 
surrounding the small quantity of U&A Belgium's sales in the instant 
review of SSPC which was hot-rolled in Germany, we preliminarily find 
that these sales of merchandise that was hot-rolled in Germany and 
returned to Belgium for pickling and annealing and shipment, are 
appropriately classified as merchandise of German origin. Therefore, 
for purposes of the preliminary results, we have not included sales of 
this merchandise in our NV comparisons. However, we will continue to 
analyze the record evidence and arguments on the treatment of U&A 
Belgium sales of SSPC hot-rolled in Germany for purposes of the final 
results.

[[Page 32505]]

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent that are covered by the 
descriptions in the Scope of Antidumping Duty Order section, above, and 
sold in the home market during the POR, except for merchandise hot-
rolled in Germany, to be the foreign like product 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 
initial antidumping questionnaire we provided to U&A Belgium. See U&A 
Belgium Antidumping Questionnaire, dated July 29, 2003.

Normal Value Comparisons

    To determine whether sales of subject merchandise to the United 
States were made at less than fair value, we compared the CEP to NV, as 
described in the Constructed 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.
Home Market Viability
    In accordance with section 773(a)(1)(C) of the Act, to determine 
whether there was a sufficient volume of sales in the home market to 
serve as a viable basis for calculating NV, we compared U&A Belgium's 
volume of home market sales of the foreign like product to the volume 
of U.S. sales of the subject merchandise. Pursuant to section 
773(a)(1)(B) of the Act, and section 351.404(b) of the Department's 
regulations, because U&A Belgium'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 
determine that the home market was viable. 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.
Arm's Length Test
    U&A Belgium reported that it made sales in the home market to 
affiliated customers, classified into six categories, during the POR. 
U&A Belgium reported that with one exception, it did not have any sales 
of subject merchandise to any affiliates which were resold to 
unaffiliated customers. It reported that one sale to one affiliate was 
resold to an unaffiliated customer. See section A response of September 
11, 2003, at page 5. For purposes of these preliminary results, we did 
not include this sale in our analysis.
    Sales to affiliated customers in the home market not made at arm's 
length were excluded from our analysis. To test whether these sales 
were made at arm's length, we compared the starting prices of sales to 
affiliated and unaffiliated customers net of all movement charges, 
direct selling expenses, discounts and packing. In accordance with the 
Department's current practice, if the prices charged to an affiliated 
party were, on average, between 98 and 102 percent of the prices 
charged to unaffiliated parties for merchandise identical or most 
similar to that sold to the affiliated party, we consider the sales to 
be at arm's length prices. See 19 CFR 351.403(c). Conversely, where the 
affiliated party did not pass the arm's length test, all sales to that 
affiliated party have been have been excluded from the NV calculation. 
See Antidumping Proceedings: Affiliated Party Sales in the Ordinary 
Course of Trade, 67 FR 69186 (Nov. 15, 2002).

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is 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 stated at 19 CFR 351.401(i), the Department will use the 
respondent's invoice date as the date of sale unless another date 
better reflects the date upon which the exporter or producer 
establishes the essential terms of sale. U&A Belgium reported the 
invoice date as the date of sale for both the U.S. market and the home 
market because the date of invoice reflects the date on which the 
material terms of sale were finalized. We used invoice date as the date 
of sale in the investigation and prior review. See SSPC LTFV 
Investigation and SSPC Belgium 00/01.
    For purposes of this review, U&A Belgium classified all of its 
export sales of SSPC as CEP sales. During the POR, U&A Belgium made 
sales to the United States through its U.S. affiliate, TrefilARBED and, 
beginning November 2002, through its affiliate U&A S.A. and its U.S. 
affiliate, Arcelor Stainless USA, which then resold the merchandise to 
unaffiliated customers. According to U&A Belgium, Arcelor Stainless USA 
has served as the exclusive distributor for U&A Belgium's U.S. sales 
since November 2002.\10\
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    \10\ See page A-21 and A-33-34, section A response of September 
11, 2003.
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    The Department calculated CEP for U&A Belgium based on packed 
prices to customers in the United States. We made deductions from the 
starting price, net of discounts, 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, 
because U&A Belgium reported CEP sales, in accordance with sections 
772(d)(1) of the Act, we deducted from the starting price credit 
expenses, commissions, warranty expenses, and indirect selling 
expenses, including inventory carrying costs, incurred in the United 
States and Belgium and associated with economic activities in the 
United States.

Normal Value

    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. In addition, because the NV level 
of trade (LOT) is more remote from the factory than the CEP LOT, and 
available data provide no appropriate basis to determine an LOT 
adjustment between NV and CEP, we made a CEP offset pursuant to section 
773(a)(7)(B) of the Act (see Level of Trade section, below).
    As stated at 19 CFR 351.401(i), the Department will use the 
respondent's invoice date as the date of sale unless another date 
better reflects the date upon which the exporter or producer 
establishes the essential terms of sale. U&A Belgium reported the 
invoice date as the date of sale for both the U.S. market and the home 
market because the date of invoice reflects the date on which the 
material terms of sale were finalized.
    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).

Cost of Production

    The Department disregarded sales below cost of production (COP) in 
the last completed review. See SSPC Belgium 00/01, which incorporated 
Stainless Steel Plate in Coils From Belgium: Preliminary Results of

[[Page 32506]]

Antidumping Administrative Review, 67 FR 39354, 39355 (June 7, 2002). 
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 U&A Belgium'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 selling, general and administrative (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 relied on home market sales and COP information provided 
by U&A Belgium in its questionnaire responses. We made adjustments to 
COP and CV to reflect appropriately U&A Belgium's expenses associated 
with scrap and hot band purchases from affiliates and U&A Belgium's 
general and administrative 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 did not permit 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 the respondent's sales of a given product were at prices 
less than COP, we did not disregard any below-cost sales of that 
product because the below-cost sales were not made in substantial 
quantities within an extended period of time. Where 20 percent or more 
of the respondent's sales of a given product 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)(2)(A) and (C) of the Act. Because we compared 
prices to POR-average costs, we determined that the below-cost prices 
did not permit the recovery of costs within a reasonable period of 
time, in accordance with section 773(b)(1)(B) of the Act. Therefore, we 
disregarded the below-cost sales and used the remaining sales, if any, 
as the basis for NV, in accordance with section 773(b)(1) of the Act.

CEP to NV Comparison

    For those sales at prices above COP, we based NV on home market 
prices to affiliated (when made at prices determined to be arm's-
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. 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 costs 
attributable to differences in physical characteristics of the 
merchandise pursuant to section 773(a)(6)(C)(ii) of the Act. For 
comparison to CEP, we deducted home market direct selling expenses 
pursuant to section 773(a)(6)(C)(iii) of the Act and section 351.410(c) 
of the Department's regulations.
    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, 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.

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 the U.S. sales. See 19 CFR 351.412. 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 from exporter to importer. For 
CEP, it is the level of the constructed sale from the exporter to the 
importer. See 19 CFR 351.412. As noted above, U&A Belgium classified 
all its exported sales of SSPC as CEP sales.
    To determine whether NV sales are at a different LOT than 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. 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 
Final Determination of Sales at Less Than Fair Value: Greenhouse 
Tomatoes From Canada, 67 FR 8781 (February 26, 2002); see also Notice 
of Final Determination of Sales at Less than Fair Value: Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 
19, 1997) and Preliminary Results of Antidumping Duty Administrative 
Review: Stainless Steel Sheet and Strip in Coils From Italy, 68 FR 
47032 (August 7, 2003). For the CEP sales, we consider only the selling 
activities reflected in the price after the deduction of expenses and 
CEP profit under section 772(d) of the Act. See Micron Technology Inc. 
v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). We expect 
that, if claimed LOTs are the same, the functions and activities of the 
seller should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the functions and activities 
of the seller should be dissimilar. See Porcelain-on-Steel Cookware 
from Mexico: Final Results of Administrative Review, 65 FR 30068 (May 
10, 2000).
    In the current review, U&A Belgium reported five customer 
categories and one level of trade in the comparison market. U&A Belgium 
performs a variety of distinct selling functions in each customer 
category. See Appendix SA-8. We examined the selling functions 
performed for the five customer categories and found there were no 
differences in selling functions offered among them. Therefore, we

[[Page 32507]]

preliminarily conclude that U&A Belgium's five customer categories in 
the home market constitute one level of trade.
    U&A Belgium reported two channels of distribution and one level of 
trade in the U.S. market. U&A Belgium's two channels of distribution 
are: sales shipped directly from U&A Belgium to the customer, and sales 
of U&A Belgium merchandise which has been stocked by Arcelor Stainless 
USA. See Appendix SA-8. We examined the selling functions performed for 
both U.S. sales channels and found that there was only one minor 
difference in selling functions offered between them. Arcelor Stainless 
USA performs a variety of functions in both sales channels. U&A Belgium 
and Arcelor Stainless USA also perform several selling functions 
jointly in both sales channels. With the exception of one selling 
function, the selling activities and services do not vary between sales 
channels. In light of the above, we preliminarily conclude that the U&A 
Belgium's two U.S. sales channels constitute one level of trade.
    The home market selling expenses are attributable to selling 
activities performed by U&A Belgium, while all the selling functions 
for the U.S. market are performed by Arcelor Stainless USA, with the 
exception of a few which are shared with U&A Belgium. Thus, very few of 
the selling functions performed for home market sales are performed for 
the constructed sale from the exporter to the U.S. importer. Therefore, 
we conclude that U&A Belgium's home market sales are made at a 
different, and more remote, level of trade than its CEP sales.
    We therefore examined whether an LOT adjustment or CEP offset may 
be appropriate. In this case, U&A Belgium only sold at one LOT in the 
comparison market; therefore, there is no information available to 
determine a pattern of consistent price differences between the sales 
on which NV is based and the comparison market sales at the LOT of the 
export transaction, in accordance with the Department's normal 
methodology as described above. See 19 CFR 351.412(d). Further, we do 
not have record information which would allow us to examine pricing 
patterns based on respondent's sales of other products, and there are 
no other respondents or other record information on which such an 
analysis could be based. Accordingly, because the data available do not 
provide an appropriate basis for making a LOT adjustment, but the LOT 
in the comparison market is at a more advanced stage of distribution 
than the LOT of the CEP transactions, we made a CEP offset adjustment 
in accordance with section 773(a)(7)(B) of the Act and 19 CFR 
351.412(F). This offset is equal to the amount of indirect selling 
expenses incurred in the comparison market not exceeding the amount of 
indirect selling expenses deducted from the U.S. price in accordance 
with section 772(d)(1)(D) of the Act. For a detailed discussion, see 
Analysis for Ugine & ALZ, N.V. Belgium (U&A Belgium) for the 
Preliminary Results of the Fourth Administrative Review of Stainless 
Steel Plate in Coils (SSPC) from Belgium, issued concurrently with this 
notice.

Currency Conversion

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

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:
    Manufacturer/Exporter: U&A Belgium.
    Time Period: 05/01/02-04/30/03.
    Margin: 2.40 percent.

Duty Assessment and Cash Deposit Requirements

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Pursuant to 19 CFR 351.212(b), the 
Department calculates an assessment rate for each importer of the 
subject merchandise for each respondent. The Department will issue 
appropriate assessment instructions directly to CBP within 15 days of 
publication of the final results of review.
    Furthermore, the following deposit rates will be effective with 
respect to all shipments of SSPC from Belgium entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results, as provided for by section 751(a)(1)(c) of the Act: (1) 
For U&A Belgium, 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) 
if neither the exporter nor the manufacturer is a firm covered by this 
review, a prior review, or the LTFV investigation, the cash deposit 
rate shall be the all other rate established in the LTFV investigation, 
which is 9.86 percent. See SSPC LTFV Investigation. These deposit 
rates, when imposed, shall remain in effect until publication of the 
final results of the next administrative review.

Public Comment

    Pursuant to 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. Unless 
extended by the Department, 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(c) 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. See 19 
CFR 351.213(h).

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

[[Page 32508]]

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: June 2, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-13069 Filed 6-9-04; 8:45 am]
BILLING CODE 3510-DS-P