[Federal Register Volume 69, Number 152 (Monday, August 9, 2004)]
[Notices]
[Pages 48212-48222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18153]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-831]


Stainless Steel Sheet and Strip in Coils From Taiwan: Preliminary 
Results and Partial Rescission of Antidumping Duty Administrative 
Review

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

ACTION: Notice of preliminary results and partial rescission of 
antidumping duty administrative review of stainless steel sheet and 
strip in coils from Taiwan.

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EFFECTIVE DATE: August 9, 2004.
SUMMARY: In response to a request from petitioners \1\ and one 
Taiwanese manufacturer/exporter, Chia Far Industrial Factory Co., Ltd. 
(``Chia Far''), the Department of Commerce (``the Department'') is 
conducting an administrative review of the antidumping duty order on 
stainless steel sheet and strip in coils (``SSSS'') from Taiwan. The 
period of review (``POR'') is July 1, 2002 through June 30, 2003.
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    \1\ The petitioners in this administrative review are Allegheny 
Ludlum, AK Steel Corporation, Butler Armco Independent Union, J&L 
Specialty Steel, Inc., United Steelworkers of America, AFL-CIO/CLC, 
and Zanesville Armco Independent Organization.
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    This administrative review covers the following thirteen 
manufacturers/exporters of subject merchandise: Ta Chen Stainless Pipe 
Co., Ltd. (``Ta Chen''), Tung Mung Development Co. Ltd. (``Tung 
Mung''), China Steel Corporation (``China Steel''), Yieh Mau Corp. 
(``Yieh Mau''), Chain Chon Industrial Co., Ltd. (``Chain Chon''), Goang 
Jau Shing Enterprise Co., Ltd. (``Goang Jau Shing''), PFP Taiwan Co., 
Ltd. (``PFP Taiwan''), Yieh Loong Enterprise Company, Ltd. (``Yieh 
Loong''), Tang Eng Iron Works Company, Ltd. (``Tang Eng''), Yieh 
Trading Corporation (``Yieh Trading''), Chien Shing Stainless Steel 
Company Ltd. (``Chien Shing''), Chia Far, and Yieh United Steel 
Corporation (``YUSCO''). The Department is preliminarily rescinding 
this review with respect to Tung Mung, China Steel, Chain Chon and Ta 
Chen because information from U.S. Customs and Border Protection 
(``CBP'') supports their claims that they did not sell or ship subject 
merchandise to the United States during the POR. The Department is 
basing the preliminary results for the following six companies on total 
adverse facts available (``AFA'') because they failed to provide any 
response to the Department's requests for information: Tang Eng, PFP 
Taiwan, Yieh Loong, Yieh Trading, Goang Jau Shing, and Chien Shing. 
Additionally, the Department is basing the preliminary results for Yieh 
Mau on total AFA because CBP data call into question Yieh Mau's claim 
that it did not sell subject merchandise to the United States during 
the POR. The Department has preliminarily determined that Chia Far sold 
subject merchandise at less than normal value (``NV'') during the POR 
and that no dumping margin exists for YUSCO for this period. If these 
preliminary results are adopted in our final results of administrative 
review, we will instruct CBP to assess antidumping duties on all 
appropriate entries. Interested parties are invited to comment on these 
preliminary results of review. We will issue the final results of 
review no later than 120 days from the date of publication of this 
notice.

FOR FURTHER INFORMATION CONTACT: Melissa Blackledge or Karine Gziryan; 
Antidumping and Countervailing Duty Enforcement Office 4, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone (202) 482-3518 and (202) 482-4081, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 21, 1999, the Department issued an antidumping duty order 
on SSSS from Taiwan. See Notice of Antidumping Duty Order; Stainless 
Steel Sheet and Strip in Coils From United Kingdom, Taiwan and South 
Korea, 64 FR 40555 (July 27, 1999). On July 2, 2003, the Department 
published a notice of opportunity to request the fourth administrative 
review of this order. See Antidumping or Countervailing Duty Order, 
Finding, or

[[Page 48213]]

Suspended Investigation; Opportunity to Request Administrative Review, 
68 FR 39511 (July 2, 2003). On July 24, 2003, respondent Chia Far 
requested that the Department conduct an administrative review of its 
sales of subject merchandise. On July 30, 2003, in accordance with 19 
CFR 351.213(b), petitioners requested an administrative review of 
thirteen manufacturers/exporters of SSSS from Taiwan: Chia Far, YUSCO, 
Tung Mung, Goang Jau Shing, PFP Taiwan, Yieh Loong, Tang Eng, Yieh 
Trading, Chien Shing, Ta Chen, China Steel, Yieh Mau, and Chain Chon. 
On August 22, 2003, the Department published a notice of initiation of 
the instant administrative review, covering twelve of the thirteen 
respondents cited above for the period July 1, 2002 through June 30, 
2003. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 68 FR 50750 
(August 22, 2003). On September 30, 2003, the Department published a 
notice initiating the instant administrative review of Chia Far for the 
period July 1, 2002 through June 30, 2003 (Chia Far was inadvertently 
omitted from the earlier notice of initiation). See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, Request for 
Revocation in Part and Deferral of Administrative Review, 68 FR 56262 
(September 30, 2003).
    On September 11, 2003, the Department issued its antidumping 
questionnaire to each of the thirteen manufacturers/exporters listed 
above. In October 2003, Ta Chen, Chain Chon, and China Steel responded 
to the Department's antidumping questionnaire by noting that they did 
not sell or ship subject merchandise to the United States during the 
POR.\2\ In October and November 2003, Chia Far and YUSCO responded to 
the Department's antidumping questionnaire. Subsequently, the 
Department issued supplemental questionnaires to Chia Far and YUSCO. 
Chia Far and YUSCO responded to all of the Department's questionnaires 
in a timely manner. Throughout this administrative review, petitioners 
have submitted comments regarding the respondents' questionnaire 
responses.
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    \2\ On October 9, 2003, the Department notified China Steel that 
its questionnaire response was improperly filed.
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    On February 5, 2004, the Department extended the deadline for 
issuing the preliminary results in this administrative review until May 
31, 2004. See Stainless Steel Sheet and Strip in Coils From Taiwan: 
Extension of Time Limits for Preliminary Results of Antidumping Duty 
Administrative Review, 69 FR 5497 (February 5, 2004).
    On February 24, 2004, the Department notified the following 
companies that failure to respond to the Department's requests for 
information by March 9, 2004, would possibly result in the use of AFA 
in determining their dumping margins: Tang Eng, Goang Jau Shing, Chien 
Shing, China Steel, PFP Taiwan, Yieh Trading, Yieh Mau, and Yieh Loong. 
Yieh Mau responded by stating that it did not sell subject merchandise 
in the United States during the POR. In addition, on March 9, 2004, the 
Department placed on the record China Steel's October 2, 2003 
questionnaire response indicating that it did not sell subject 
merchandise to the United States during the POR. On June 7, 2004, the 
Department notified Tung Mung that it must report, by June 15, 2004, 
whether it sold or shipped subject merchandise to the United States 
during the POR, otherwise the Department may use AFA in determining the 
company's dumping margin. Tung Mung responded by letter on June 15, 
2004, stating that it had no shipments of subject merchandise during 
the POR.
    On December 18, 2003, petitioners submitted comments alleging that 
there has been a substantial shift in U.S. imports of merchandise from 
Taiwan away from the Harmonized Tariff Schedule (HTS) subheadings for 
stainless steel ``coiled sheet'' to HTS subheadings for ``other'' flat-
rolled stainless steel products, a subheading that may include both 
subject coiled and non-subject non-coiled products. Accordingly, 
petitioners requested that the Department obtain information regarding 
imports under certain ``other'' HTS subheadings for flat-rolled 
stainless steel products. The Department subsequently requested 
information from CBP regarding selected entries under various ``other'' 
HTS subheadings for flat-rolled stainless steel products. See 
Memorandum from Edward Yang to Michael S. Craig, U.S. Customs and 
Border Protection, Request for U.S. Entry Documents, dated April 9, 
2004 (April 9, 2004 Data Request). On April 20, 2004, petitioners asked 
the Department to obtain and place on the record additional information 
regarding entries under certain ``other'' HTS subheadings for flat-
rolled stainless steel products. On June 14, 2004, the Department 
placed certain CBP data on the record of this proceeding. See 
Memorandum From Melissa Blackledge To The File, U.S. Customs and Border 
Protection Data Query Results, dated June 14, 2004. The documents 
obtained from CBP for selected entries under various ``other'' HTS 
subheadings for flat-rolled stainless steel products do not indicate 
that the merchandise entering the United States is subject merchandise. 
See Memorandum from Karine Gziryan to the File regarding documentation 
provided by CBP, dated July 30, 2004.
    On March 31, 2004, the Department again extended the deadline for 
issuing the preliminary results in this administrative review until 
July 30, 2004. See Stainless Steel Sheet and Strip in Coils From 
Taiwan: Extension of Time Limits for Preliminary Results of Antidumping 
Duty Administrative Review, 69 FR 18053 (April 6, 2004).

Scope of the Review

    The products covered by the order on SSSS from Taiwan are certain 
stainless steel sheet and strip 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 sheet and strip is a flat-rolled product in coils that is 
greater than 9.5 mm in width and less than 4.75 mm in thickness, and 
that is annealed or otherwise heat treated and pickled or otherwise de-
scaled. The subject sheet and strip may also be further processed 
(e.g., cold-rolled, polished, aluminized, coated, etc.) provided that 
it maintains the specific dimensions of sheet and strip following such 
processing.
    The merchandise subject to this order is currently classifiable in 
the HTS at subheadings: 7219.13.00.31, 7219.13.00.51, 7219.13.00.71, 
7219.13.00.81, 7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 
7219.32.00.05, 7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 
7219.32.00.36, 7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 
7219.33.00.05, 7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 
7219.33.00.36, 7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 
7219.34.00.05, 7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 
7219.34.00.35, 7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 
7219.35.00.35, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 
7219.90.00.60, 7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 
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, 7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 
7220.20.70.60, 7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 
7220.20.90.60, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and

[[Page 48214]]

7220.90.00.80. Although the HTS subheadings are provided for 
convenience and customs purposes, the Department's written description 
of the merchandise covered by this order is dispositive.
    Excluded from the scope of this order are the following: (1) Sheet 
and strip that is not annealed or otherwise heat treated and pickled or 
otherwise de-scaled, (2) sheet and strip that is cut to length, (3) 
plate (i.e., flat-rolled stainless steel products of a thickness of 
4.75 mm or more), (4) flat wire (i.e., cold-rolled sections, with a 
prepared edge, rectangular in shape, of a width of not more than 9.5 
mm), and (5) razor blade steel. Razor blade steel is a flat-rolled 
product of stainless steel, not further worked than cold-rolled (cold-
reduced), in coils, of a width of not more than 23 mm and a thickness 
of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent 
chromium, and certified at the time of entry to be used in the 
manufacture of razor blades. See Chapter 72 of the HTS, ``Additional 
U.S. Note'' 1(d).
    In response to comments by interested parties, the Department also 
determined that certain specialty stainless steel products were 
excluded from the scope of the investigation and the subsequent order. 
These excluded products are described below.
    Flapper valve steel is defined as stainless steel strip in coils 
containing, by weight, between 0.37 and 0.43 percent carbon, between 
1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent 
manganese. This steel also contains, by weight, phosphorus of 0.025 
percent or less, silicon of between 0.20 and 0.50 percent, and sulfur 
of 0.020 percent or less. The product is manufactured by means of 
vacuum arc remelting, with inclusion controls for sulphide of no more 
than 0.04 percent and for oxide of no more than 0.05 percent. Flapper 
valve steel has a tensile strength of between 210 and 300 ksi, yield 
strength of between 170 and 270 ksi, plus or minus 8 ksi, and a 
hardness (Hv) of between 460 and 590. Flapper valve steel is most 
commonly used to produce specialty flapper valves in compressors.
    Also excluded is a product referred to as suspension foil, a 
specialty steel product used in the manufacture of suspension 
assemblies for computer disk drives. Suspension foil is described as 
302/304 grade or 202 grade stainless steel of a thickness between 14 
and 127 microns, with a thickness tolerance of plus-or-minus 2.01 
microns, and surface glossiness of 200 to 700 percent Gs. Suspension 
foil must be supplied in coil widths of not more than 407 mm, and with 
a mass of 225 kg or less. Roll marks may only be visible on one side, 
with no scratches of measurable depth. The material must exhibit 
residual stresses of 2 mm maximum deflection and flatness of 1.6 mm 
over 685 mm length.
    Certain stainless steel foil for automotive catalytic converters is 
also excluded from the scope of the order. This stainless steel strip 
in coils is a specialty foil with a thickness of between 20 and 110 
microns used to produce a metallic substrate with a honeycomb structure 
for use in automotive catalytic converters. The steel contains, by 
weight, carbon of no more than 0.030 percent, silicon of no more than 
1.0 percent, manganese of no more than 1.0 percent, chromium of between 
19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of 
no more than 0.045 percent, sulfur of no more than 0.03 percent, 
lanthanum of less than 0.002 or greater than 0.05 percent, and total 
rare earth elements of more than 0.06 percent, with the balance iron. 
Permanent magnet iron-chromium-cobalt alloy stainless strip is also 
excluded from the scope of this order. This ductile stainless steel 
strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 
percent cobalt, with the remainder of iron, in widths 228.6 mm or less, 
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic 
remanence between 9,000 and 12,000 gauss, and a coercivity of between 
50 and 300 oersteds. This product is most commonly used in electronic 
sensors and is currently available under proprietary trade names such 
as ``Arnokrome III.'' ``Arnokrome III'' is a trademark of the Arnold 
Engineering Company.
    Certain electrical resistance alloy steel is also excluded from the 
scope of this order. This product is defined as a non-magnetic 
stainless steel manufactured to American Society of Testing and 
Materials (``ASTM'') specification B344 and containing, by weight, 36 
percent nickel, 18 percent chromium, and 46 percent iron, and is most 
notable for its resistance to high temperature corrosion. It has a 
melting point of 1390 degrees Celsius and displays a creep rupture 
limit of 4 kilograms per square millimeter at 1000 degrees Celsius. 
This steel is most commonly used in the production of heating ribbons 
for circuit breakers and industrial furnaces, and in rheostats for 
railway locomotives. The product is currently available under 
proprietary trade names such as ``Gilphy 36.'' ``Gilphy 36'' is a 
trademark of Imphy, S.A.
    Certain martensitic precipitation-hardenable stainless steel is 
also excluded from the scope of this order. This high-strength, ductile 
stainless steel product is designated under the Unified Numbering 
System (``UNS'') as S45500-grade steel, and contains, by weight, 11 to 
13 percent chromium, and 7 to 10 percent nickel. Carbon, manganese, 
silicon and molybdenum each comprise, by weight, 0.05 percent or less, 
with phosphorus and sulfur each comprising, by weight, 0.03 percent or 
less. This steel has copper, niobium, and titanium added to achieve 
aging, and will exhibit yield strengths as high as 1700 Mpa and 
ultimate tensile strengths as high as 1750 Mpa after aging, with 
elongation percentages of 3 percent or less in 50 mm. It is generally 
provided in thicknesses between 0.635 and 0.787 mm, and in widths of 
25.4 mm. This product is most commonly used in the manufacture of 
television tubes and is currently available under proprietary trade 
names such as ``Durphynox 17.'' ``Durphynox 17'' is a trademark of 
Imphy, S.A.
    Finally, three specialty stainless steels typically used in certain 
industrial blades and surgical and medical instruments are also 
excluded from the scope of the order. These include stainless steel 
strip in coils used in the production of textile cutting tools (e.g., 
carpet knives). This steel is similar to AISI grade 420, but 
containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also 
contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 
0.020 percent or less, and includes between 0.20 and 0.30 percent 
copper and between 0.20 and 0.50 percent cobalt. This steel is sold 
under proprietary names such as ``GIN4 Mo.'' The second excluded 
stainless steel strip in coils is similar to AISI 420-J2 and contains, 
by weight, carbon of between 0.62 and 0.70 percent, silicon of between 
0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, 
phosphorus of no more than 0.025 percent and sulfur of no more than 
0.020 percent. This steel has a carbide density on average of 100 
carbide particles per 100 square microns. An example of this product is 
``GIN5'' steel. The third specialty steel has a chemical composition 
similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, 
molybdenum of between 1.15 and 1.35 percent, but lower manganese of 
between 0.20 and 0.80 percent, phosphorus of no more than 0.025 
percent, silicon of between 0.20 and 0.50 percent, and sulfur of no 
more than 0.020 percent. This product is supplied with a hardness of 
more than Hv 500 guaranteed after customer processing, and is supplied 
as, for example, ``GIN6.'' This list of uses is

[[Page 48215]]

illustrative and provided for descriptive purposes only. ``GIN4 Mo,'' 
``GIN5'' and ``GIN6'' are the proprietary grades of Hitachi Metals 
America, Ltd.

Partial Preliminary Rescission of Review

    Five respondents, Ta Chen, Yieh Mau, Chain Chon, Tung Mung, and 
China Steel, certified to the Department that they did not ship subject 
merchandise to the United States during the POR. The Department 
subsequently obtained CBP information in order to substantiate the 
respondents' claims. See Memorandum From Melissa Blackledge To The 
File, U.S. Customs and Border Protection Data Query Results, dated June 
14, 2004. On June 21, 2004, petitioners submitted comments on the CBP 
information. During June and July 2004, the Department requested 
additional information from Ta Chen, Yieh Mau, and CBP regarding 
certain U.S. entries during the POR (CBP entry documentation relating 
to Chain Chon had already been requested in the Department's April 9, 
2004 Data Request). See Memoranda from Tom Futtner to William R. Scopa, 
U.S. Customs and Border Protection, Request for U.S. Entry Documents, 
dated June 29, 2004, July 1, 2004, and July 7, 2004 (``CBPRED 
Memoranda''). On July 19, 2004, Yieh Mau submitted a letter stating it 
had reviewed its records and found no sales of subject merchandise to 
the United States during the POR. On July 21, 2004, Ta Chen submitted 
documentation supporting its claim of no sales of subject merchandise 
to the United States during the POR.
    CBP data call into question the no shipment claim of Yieh Mau and 
the company failed to demonstrate that it did not sell subject 
merchandise to the United States during the POR. Therefore, the 
Department has preliminarily determined not to rescind this 
administrative review with respect to Yieh Mau. Rather, as explained 
below, the Department has preliminarily assigned a dumping margin to 
Yieh Mau that is based on total AFA. The Department is awaiting 
additional information from CBP regarding certain entries of Yieh Mau's 
merchandise during the POR. The Department will consider this 
additional information in reaching its final determination with respect 
to Yieh Mau.
    Thus, the evidence on the record does not indicate that Ta Chen, 
Chain Chon, Tung Mung, or China Steel exported subject merchandise to 
the United States during the POR. Therefore, in accordance with 19 CFR 
351.213(d)(3) and consistent with the Department's practice, we are 
preliminarily rescinding our review with respect to Ta Chen, Chain 
Chon, Tung Mung and China Steel. See, e.g., Certain Welded Carbon Steel 
Pipe and Tube From Turkey; Final Results and Partial Rescission of 
Antidumping Administrative Review, 63 FR 35190, 35191 (June 29, 1998); 
Certain Fresh Cut Flowers From Columbia; Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 62 FR 53287, 
53288 (October 14, 1997).

Use of Facts Available

    Section 776(a)(2) of the Tariff Act of 1930, as amended (``the 
Act''), provides that if any interested party: (A) Withholds 
information that has been requested by the Department; (B) fails to 
provide such information by the deadlines for submission of the 
information or in the form or manner requested; (C) significantly 
impedes an antidumping investigation; or (D) provides such information 
but the information cannot be verified, the Department shall, subject 
to section 782(d) of the Act, use facts otherwise available in making 
its determination.
    Section 782(d) of the Act provides that, if the Department 
determines that a response to a request for information does not comply 
with the request, the Department will inform the person submitting the 
response of the nature of the deficiency and shall, to the extent 
practicable, provide that person the opportunity to remedy or explain 
the deficiency. If that person submits further information that 
continues to be unsatisfactory, or this information is not submitted 
within the applicable time limits, the Department may, subject to 
section 782(e) of the Act, disregard all or part of the original and 
subsequent responses, as appropriate.
    The evidence on the record of this review establishes that, 
pursuant to section 776(a)(2)(A) of the Act, the use of total facts 
available is warranted in determining the dumping margin for Tang Eng, 
PFP Taiwan, Yieh Loong, Yieh Trading, Goang Jau Shing, Chien Shing, and 
Yieh Mau because these companies failed to provide requested 
information. Specifically, these companies failed to respond to the 
Department's antidumping questionnaire. OnFebruary 24, 2004, the 
Department informed these companies that failure to respond to its 
requests for information by March 9, 2004, would possibly result in the 
use of AFA in determining their dumping margins. Six of these 
manufacturers/exporters did not respond to the Department's February 
24, 2004 letter. Although Yieh Mau responded to the Department's 
February 24, 2004 letter by claiming not to have sold subject 
merchandise to the United States during the POR, record evidence 
indicates that such sales may have taken place and yet, Yieh Mau did 
not provide any of the requested information that would allow the 
Department to calculate a dumping margin for these sales. See Yieh 
Mau's March 6, 2004 response to the Department's February 24, 2004 
letter and July 13, 2004 response to the Department's supplemental 
questionnaire.
    Because these respondents failed to provide any of the necessary 
information requested by the Department, pursuant to section 
776(a)(2)(A) of the Act, we have based the dumping margins for these 
companies on the facts otherwise available.

Use of Adverse Inferences

    Section 776(b) of the Act states that if the Department ``finds 
that an interested party has failed to cooperate by not acting to the 
best of its ability to comply with a request for information from the 
administering authority or the Commission, the administering authority 
or the Commission * * *, in reaching the applicable determination under 
this title, may use an inference that is adverse to the interests of 
that party in selecting from among the facts otherwise available.'' See 
also Statement of Administrative Action (``SAA'') accompanying the 
Uruguay Round Agreements Act (URAA), H. Rep. No. 103-316 at 870 (1994). 
Section 776(b) of the Act goes on to note that an adverse inference may 
include reliance on information derived from (1) the petition; (2) a 
final determination in the investigation under this title; (3) any 
previous review under section 751 or determination under section 753, 
or (4) any other information on the record.
    Adverse inferences are appropriate ``to ensure that the party does 
not obtain a more favorable result by failing to cooperate than if it 
had cooperated fully.'' See SAA at 870; Borden, Inc. v. United States, 
4 F. Supp. 2d 1221 (CIT 1998); Mannesmannrohren-Werke AG v. United 
States, 77 F. Supp. 2d 1302 (CIT 1999). The Court of Appeals for the 
Federal Circuit (CAFC), in Nippon Steel Corporation v. United States, 
337 F.3d 1373, 1380 (Fed. Cir. 2003), provided an explanation of the 
``failure to act to the best of its ability'' standard, holding that 
the Department need not show intentional conduct existed on the part of 
the respondent, but merely that a ``failure to cooperate to the best of 
a respondent's ability'' existed, i.e., information was not provided 
``under circumstances in which it is reasonable

[[Page 48216]]

to conclude that less than full cooperation has been shown.'' Id.
    The record shows that Tang Eng, PFP Taiwan, Yieh Loong, Yieh 
Trading, Goang Jau Shing, Chien Shing, and Yieh Mau failed to cooperate 
to the best of their abilities, within the meaning of section 776(b) of 
the Act. As noted above, Tang Eng, PFP Taiwan, Yieh Loong, Yieh 
Trading, Goang Jau Shing, and Chien Shing failed to provide any 
response to the Department's requests for information. Yieh Mau 
responded to the Department's requests for information but, 
preliminarily, the Department has determined that it inaccurately 
reported that it did not sell subject merchandise to the United States 
during the POR. As a general matter, it is reasonable for the 
Department to assume that these companies possessed the records 
necessary to participate in this review; however, by not supplying the 
information the Department requested, these companies failed to 
cooperate to the best of their abilities. As these companies have 
failed to cooperate to the best of their abilities, we are applying an 
adverse inference in determining their dumping margin pursuant to 
section 776(b) of the Act. As AFA, we have assigned these companies a 
dumping margin of 21.10 percent, which is the highest appropriate 
dumping margin \3\ from this or any prior segment of the instant 
proceeding. This rate was the highest petition margin and was used as 
AFA in a number of segments of the instant proceeding. See e.g. 
Stainless Steel Sheet and Strip from Taiwan; Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 67 FR 6682 
(February 13, 2002) (1999-2000 AR of SSSS from Taiwan). See also 
Stainless Steel Sheet and Strip in Coils From Taiwan: Notice of Court 
Decision, 67 FR 63887 (October 16, 2002).
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    \3\ Before adding the impact of middlemen dumping for 
merchandise manufactured by YUSCO and sold by Ta Chen.
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    The Department notes that while the highest dumping margin 
calculated during this or any prior segment of the instant proceeding 
is 36.44 percent, as argued by petitioners, this margin represents a 
combined rate applied to a channel transaction in the investigative 
phase of this proceeding and it is based on middleman dumping by Ta 
Chen. See Final Results of Redetermination Pursuant to Court Remand, 
(Nov. 29, 2000) affirmed by 219 F. Supp. 2d 1333, 1345 (CIT 2002), 
aff'd 354 F. 3d 1371, 1382 (Fed. Cir. 2004). Where circumstances 
indicate that a particular dumping margin is not appropriate as AFA, 
the Department will disregard the margin and determine another more 
appropriate one as facts available. See Fresh Cut Flowers From Mexico; 
Final Results of Antidumping Duty Administrative Review, 61 FR 6812, 
6814 (February 22, 1996) (where the Department disregarded the highest 
dumping margin for use as AFA because the margin was based on another 
company's uncharacteristic business expense, resulting in an unusually 
high dumping margin). Because a dumping margin based on middleman 
dumping would be inappropriate, given that the record does not indicate 
that any of Tang Eng's, PFP Taiwan's, Yieh Loong's, Yieh Trading's, 
Goang Jau Shing's, Chien Shing's, or Yieh Mau's exports to the United 
States during the POR involved a middleman, the Department has, 
consistent with previous reviews, continued to use as AFA the highest 
dumping margin from any segment of the proceeding for a producer's 
direct exports to the United States, without middleman dumping, which 
is 21.10 percent.
    Section 776(c) of the Act requires that the Department, to the 
extent practicable, corroborate secondary information from independent 
sources that are reasonably at its disposal. Secondary information is 
defined as ``{i{time} nformation derived from the petition that gave 
rise to the investigation or review, the final determination concerning 
the subject merchandise, or any previous review under section 751 
concerning the subject merchandise.'' See SAA at 870. The SAA clarifies 
that ``corroborate'' means that the Department will satisfy itself that 
the secondary information to be used has probative value. See SAA at 
870. As noted in Tapered Roller Bearings, Four Inches or Less in 
Outside Diameter, and Components Thereof, From Japan; Preliminary 
Results of Antidumping Duty Administrative Reviews and Partial 
Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 
1996), to corroborate secondary information, the Department will, to 
the extent practicable, examine the reliability and relevance of the 
information.
    The rate of 21.10 percent constitutes secondary information. The 
Department corroborated the information used to establish the 21.10 
percent rate in the less than fair value (LTFV) investigation in this 
proceeding, finding the information to be both reliable and relevant. 
See Notice of Final Determination of Sales at Less Than Fair Value: 
Stainless Steel Sheet and Strip in Coils From Taiwan, 64 FR 30592, 
30592 (June 8, 1999) (Final Determination); see also 1999-2000 AR of 
SSSS from Taiwan, 67 FR 6682, 6684 and accompanying Issues and Decision 
Memorandum at Comment 28. Nothing on the record of this instant 
administrative review calls into question the reliability of this rate. 
Furthermore, with respect to the relevancy aspect of corroboration, the 
Department will consider information reasonably at its disposal as to 
whether there are circumstances that would render a margin not 
relevant. As discussed above, in selecting this margin, the Department 
considered whether a margin derived from middleman dumping was relevant 
to Tang Eng's, PFP Taiwan's, Yieh Loong's, Yieh Trading's, Goang Jau 
Shing's, Chien Shing's, or Yieh Mau's commercial experience, and 
determined the use of this margin was inappropriate. The Department has 
determined that there is no evidence on the record of this case, 
however, which would render the 21.10 percent dumping margin 
irrelevant. Thus, we find that the rate of 21.10 percent is 
sufficiently corroborated for purposes of the instant administrative 
review.

Duty Absorption

    On September 22, 2003, petitioners requested that the Department 
determine whether the thirteen respondents absorbed antidumping duties 
during the POR. Section 751(a)(4) of the Act, provides for the 
Department, if requested, to determine, during an administrative review 
initiated two or four years after the publication of the order, whether 
antidumping duties have been absorbed by a foreign producer or 
exporter, if the subject merchandise is sold in the United States 
through an affiliated importer. Because Chia Far is the only respondent 
to report sales of subject merchandise to unaffiliated customers in the 
United States through an affiliated importer, and because this review 
was initiated four years after the publication of the order, we will 
make a duty absorption determination with respect to Chia Far in this 
segment of the proceeding within the meaning of section 751(a)(4) of 
the Act.
    On July 12, 2004, the Department requested that Chia Far provide 
evidence demonstrating that unaffiliated U.S. purchasers will pay any 
antidumping duties ultimately assessed on entries during the POR. In 
its response, submitted to the Department on July 19, 2004, Chia Far 
provided a statement from the unaffiliated customer of its U.S. 
affiliated importer as evidence that it has not absorbed antidumping 
duties. In determining whether Chia Far absorbed antidumping

[[Page 48217]]

duties during the POR, the Department presumes that duties will be 
absorbed for those sales that have been made at less than NV. This 
presumption can be rebutted with evidence (e.g., an enforceable 
agreement between the affiliated importer and unaffiliated purchaser) 
that the unaffiliated purchaser will pay the full duty ultimately 
assessed on the subject merchandise.
    Although Chia Far claims that the unaffiliated U.S. customer paid 
antidumping duties, it did not provide sufficient evidence that the 
unaffiliated U.S. customer always pays antidumping duties nor did Chia 
Far provide an agreement with its unaffiliated purchaser stating that 
the unaffiliated purchaser will pay the full duty ultimately assessed 
on the subject merchandise. Therefore, we preliminarily find that Chia 
Far absorbed antidumping duties on all U.S. sales made through its 
affiliated importer. The Department will notify the International Trade 
Commission (``ITC'') of its finding regarding such duty absorption for 
the ITC to consider in conducting a five-year review of the order on 
SSSS from Taiwan under section 751(c) of the Act.

Affiliation

A. China Steel and Yieh Loong Enterprise Co. Ltd.

    Petitioners contend that YUSCO is affiliated with two other 
companies named as respondents in this review, China Steel (and its 
affiliates), and Yieh Loong, companies that YUSCO did not identify as 
its affiliates. See petitioners' January 6, 2004 submission to the 
Department. In the previous administrative review of SSSS from Taiwan, 
covering the period July 1, 2001 through June 30, 2002, petitioners 
also contended that YUSCO was affiliated with China Steel and Yieh 
Loong. However, the Department determined in that review that these 
companies were not affiliated with YUSCO. See Stainless Steel Sheet and 
Strip in Coils From Taiwan: Final Results and Partial Rescission of 
Antidumping Duty Administrative Review, 69 FR 5960 (February 9, 2004) 
and accompanying Issues and Decision Memorandum at Comment 3. Because 
petitioners have not provided any new evidence indicating a change in 
the relationship between these companies, we continue to find that 
YUSCO is not affiliated with China Steel or Yieh Loong.

B. Home Market Customers

    Petitioners contend that, in the instant administrative review, 
YUSCO failed to acknowledge certain affiliations that it identified in 
the prior two administrative reviews of SSSS from Taiwan. According to 
petitioners, some of the unnamed, potentially affiliated parties appear 
on customer lists provided by YUSCO in the instant administrative 
review. Specifically, petitioners identify three companies that they 
claim are affiliated with YUSCO and urge the Department to find YUSCO's 
sales to these companies to be affiliated-party sales (petitioners note 
that none of these affiliated parties reported downstream sales of 
SSSS). See petitioners' July 15, 2004 submission to the Department at 4 
and 5.
    For these preliminary results, we have not found the three 
companies at issue to be affiliated with YUSCO. As an initial matter, 
there is no evidence on the record that YUSCO sold SSSS to two of the 
companies identified by petitioners as potential affiliates of YUSCO. 
Additionally, in their July 15, 2003 submission, petitioners make 
certain assertions regarding stock ownership by individuals and 
investment companies without providing support for their assertions.

Identifying Home Market Sales

    Section 773 (a)(1)(B) of the Act defines NV as the price at which 
foreign like product is first sold (or, in the absence of a sale, 
offered for sale) for consumption in the exporting country (home 
market), in the usual commercial quantities and in the ordinary course 
of trade and, to the extent practicable, at the same level of trade as 
the export price (``EP'') or constructed export price (``CEP''). In 
implementing this provision, the Court of International Trade (``CIT'') 
has found that sales should be reported as home market sales if the 
producer ``knew or should have known that the merchandise {it 
sold{time}  was * * * for home consumption based upon the particular 
facts and circumstances surrounding the sales.'' See Tung Mung 
Development Co., Ltd. & Yieh United Steel Corp. v. United States and 
Allegheny Ludlum Corp. et al., Slip Op. 01-83 (CIT 2001); citing INA 
Walzlager Schaeffler KG v. United States, 957 F. Supp. 251 (1997). 
Conversely, if the producer knew or should have known the merchandise 
that it sold to home market customers was not for home market 
consumption, it should exclude such sales from its home market sales 
database. Even though a producer may sell merchandise destined for 
exportation by a home market customer, if that merchandise is used to 
produce non-subject merchandise in the home market, it is consumed in 
the home market and such sales will be considered to be home market 
sales. See Final Determination of Sales at Less Than Fair Value: 
Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled 
Carbon Steel Plate Products, Certain Corrosion-Resistant Carbon Steel 
Flat Products, and Certain Cut-to-Length Carbon Steel Plate From Korea, 
58 FR 37176, 37182 (July 9, 1993).
    The issue of whether respondents have properly reported home market 
sales has arisen in each of the prior segments of the instant 
proceeding. It is also an issue in the instant administrative review.
YUSCO
    In its October 31, 2003 response to section B of the Department's 
antidumping questionnaire, YUSCO stated that it included in its home 
market sales database ``all sales that the Department may find relevant 
in light of the Department's final determination in the original 
investigation, and the U.S. Court of International Trade's decision in 
Allegheny Ludlum v. United States, Slip Op. 00-170 (Dec. 28, 2000)'' 
(Allegheny Ludlum).\4\ Specifically, YUSCO included in its home market 
sales database sales that it classified in its books and records as 
domestic sales, indirect export sales, and sales to a home market 
customer's bonded warehouse. YUSCO also reported downstream sales of 
its Taiwanese affiliate.
---------------------------------------------------------------------------

    \4\ In the investigative phase of this proceeding, the 
Department based YUSCO's dumping margin on total adverse facts 
available because the company failed to report its indirect export 
sales as home market sales. In Allegheny Ludlum, YUSCO challenged, 
among other things, the Department's final determination in 
stainless steel plate in coils from Taiwan wherein the Department 
found that (1) certain sales characterized by YUSCO as indirect 
export sales were in fact home market sales and (2) YUSCO's failure 
to report these sales warranted basing YUSCO's dumping margin on 
total adverse facts available. See Notice of Final Determination of 
Sales at Less Than Fair Value: Stainless Steel Plate in Coils From 
Taiwan, 64 FR 15493 (March 31, 1999). The CIT ruled that the 
Department properly considered YUSCO's indirect export sales to be 
home market sales and properly resorted to the use of total adverse 
facts available.
---------------------------------------------------------------------------

    Throughout the instant administrative review, petitioners have 
questioned the accuracy of YUSCO's home market sales database. 
Specifically, petitioners claim that YUSCO has not properly applied the 
knowledge test to each sale at the time of sale and has relied on a 
flawed internal order system in classifying and reporting its sales. As 
a result, petitioners maintain that the Department cannot rely upon the 
sales databases submitted by YUSCO and

[[Page 48218]]

must base the company's dumping margin on total AFA. See petitioners' 
July 15, 2004 submission to the Department at 8 and 9.
    For these preliminary results, we have not rejected YUSCO's sales 
databases in favor of total AFA because we have determined that there 
is information on the record indicating whether YUSCO knew, or should 
have known, the merchandise that it sold was for consumption in the 
home market based upon the particular facts and circumstances 
surrounding the sales. Thus, there is information on the record that 
allows the Department to identify YUSCO's home market sales. 
Specifically, YUSCO reported that it sold SSSS to a certain home market 
customer who was planning to further process the SSSS and then export 
the merchandise. Further, YUSCO delivered the merchandise to this 
customer at a location that had facilities to further process the SSSS. 
See YUSCO's June 10, 2004 supplemental questionnaire response at 9. 
Because the record indicates that YUSCO knew at the time of sale that 
this merchandise would be consumed in the home market, the Department 
has preliminarily considered these ``indirect export'' sales to be home 
market sales. For all other ``indirect export'' sales, YUSCO stated 
``it arranged the vessel and shipped the merchandise to assigned 
foreign seaports and/or shipped the merchandise directly to the dock, 
along side ship and/or to {an associated facility{time} .'' See id. at 
11. Sample sales documentation indicates that YUSCO knew it was to make 
such arrangements at the time of sale. Thus, for the preliminary 
results, the Department has not considered these ``indirect export'' 
sales to be home market sales. YUSCO also reported its Taiwanese 
affiliate's ``indirect export'' sales. The record indicates that most 
of these ``indirect sales'' were delivered to the port, and thus it 
appears that the Taiwanese affiliate knew at the time of sale that 
these sales were not going to be consumed in the home market. 
Therefore, for the preliminary results, the Department has not 
considered these ``indirect export'' sales to be home market sales. 
Lastly, with respect to YUSCO's sales to a home market customer's 
bonded warehouse, as was the case in the prior administrative review of 
this order, YUSCO established that the legal purpose of a bonded 
warehouse is to further process and then export merchandise and there 
is no evidence on the record that the SSSS sold to the bonded warehouse 
was eventually exported as subject merchandise or sold in the home 
market as subject merchandise. Therefore, consistent with the approach 
taken in the prior administrative review of this order, we have 
considered YUSCO's sales to the bonded warehouse of one of its home 
market customers to be home market sales.
Chia Far
    In its April 29, 2004 supplemental questionnaire response, Chia Far 
stated that it has reason to believe that some of the home market 
customers to whom it sold SSSS during the POR may have exported the 
merchandise. Specifically, Chia Far indicated that it normally delivers 
SSSS by loading it onto a truck; however, for certain customers, it 
packed the SSSS in ocean containers which it delivered to a container 
yard or which the customer picked up. See Chia Far's April 29, 2004 
supplemental response at 1 and its October 31, 2003 response to 
sections B through D of the antidumping questionnaire at 2. Also, Chia 
Far noted that many of the customers for whom it packed SSSS in 
containers are end users with production facilities in mainland China. 
Although Chia Far stated that it does not definitively know whether the 
SSSS in question will be exported, the Department has preliminarily 
determined that, based on the circumstances surrounding the sales, Chia 
Far should have known that the SSSS in question was not for consumption 
in the home market. Therefore, the Department has preliminarily 
excluded these sales from Chia Far's home market sales database.

Normal Value Comparisons

    To determine whether YUSCO and Chia Far's sales of subject 
merchandise to the United States were made at less than NV, we compared 
the EP and CEP, as appropriate, to NV, as described in the ``Export 
Price and Constructed Export Price'' and ``Normal Value'' sections of 
this notice, below. In accordance with section 777A of the Act, we 
calculated monthly weighted-average prices for NV and compared these to 
individual EP and CEP transactions.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products covered by the description in the ``Scope of the Review'' 
section of this notice, supra, and sold by YUSCO and Chia Far in the 
comparison market during the POR to be foreign like product for the 
purpose of determining appropriate product comparisons to SSSS sold in 
the United States. In determining which sales of foreign like product 
to compare to U.S. sales of subject merchandise, we relied on the 
following nine product characteristics, listed in order of importance: 
grade, hot or cold-rolled, gauge, surface finish, metallic coating, 
non-metallic coating, width, temper, and edge. We first attempted to 
compare contemporaneous U.S. and comparison-market sales of products 
that are identical with respect to the product characteristics listed 
above. Where we were unable to compare sales of identical merchandise, 
we compared U.S. sales of product to the most similar foreign like 
product based on the above characteristics and the reporting 
instructions in the September 11, 2003 antidumping questionnaire. Where 
there were no appropriate sales of foreign like product to compare to a 
U.S. sale, we compared the price of the U.S. sale to constructed value 
(``CV'').

Export Price and Constructed Export Price

    In accordance with section 772(a) of the Act, EP is 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 in the United States or to an unaffiliated purchaser for 
exportation to the United States. 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.
YUSCO
    For purposes of the instant administrative review, YUSCO classified 
its U.S. sales as EP sales, stating that it sold SSSS to unaffiliated 
customers in the United States during the POR. We based U.S. price on 
EP as defined in section 772(a) of the Act because the merchandise was 
sold, prior to importation, outside the United States by YUSCO to an 
unaffiliated purchaser in the United States. We calculated EP using 
packed prices to unaffiliated purchasers in the United States. We made 
deductions from the starting price for inland freight (from YUSCO's 
plant to the port of exportation), international freight, brokerage and 
handling charges, container handling fees, certification fees, 
fumigation fees, and marine

[[Page 48219]]

insurance expenses in accordance with section 772(c) of the Act. We 
made no changes or corrections to the U.S. sales information reported 
by YUSCO in calculating YUSCO's dumping margin.
Chia Far
    For purposes of the instant administrative review, Chia Far 
classified its sales as either EP or CEP sales. We based U.S. price on 
EP, as defined in section 772(a) of the Act, for sales of subject 
merchandise that were sold, prior to importation, outside the United 
States by Chia Far to an unaffiliated purchaser in the United States. 
We calculated EP using packed prices to unaffiliated purchasers in the 
United States. We made deductions from the starting price for movement 
expenses including: foreign inland freight expense (from Chia Far's 
plant to the port of exportation), brokerage and handling expense, 
international ocean freight expense, marine insurance expense, 
container handling charges, and harbor construction fees. Additionally, 
we added to the starting price an amount for duty drawback pursuant to 
section 772(c)(1)(B) of the Act.
    We based U.S. price on CEP, as defined in section 772(a) of the 
Act, for sales of subject merchandise that were sold, after 
importation, by Lucky Medsup, Chia Far's affiliated reseller, to 
unaffiliated purchasers in the United States. We calculated CEP using 
packed prices to the first unaffiliated purchaser in the United States. 
We made deductions from the starting price for movement expenses 
including: foreign inland freight expense (from Chia Far's plant to the 
port of exportation), brokerage and handling expense, international 
ocean freight expense, marine and inland insurance expense, container 
handling charges, harbor construction fees, other U.S. transportation 
expenses and U.S. duty. Additionally, we added to the starting price an 
amount for duty drawback pursuant to section 772(c)(1)(B) of the Act. 
In accordance with section 772(d)(1) of the Act, we deducted from the 
starting price selling expenses associated with economic activities 
occurring in the United States, including direct and indirect selling 
expenses.
    We deducted from the starting price the profit allocated to 
expenses deducted under sections 772(d)(1) and (d)(2) of the Act in 
accordance with sections 772(d)(3) and 772(f) of the Act. In accordance 
with section 772(f) of the Act, we computed profit based on total 
revenue realized on sales in both the U.S. and home markets, less all 
expenses associated with those sales. We then allocated profit to 
expenses incurred with respect to U.S. economic activity, based on the 
ratio of total U.S. expenses to total expenses for both the U.S. and 
home market.

Normal Value

    After testing home market viability, whether home market sales to 
affiliates were at arm's-length prices, and whether home market sales 
were at below-cost prices, we calculated NV as noted in the ``Price-to-
Price Comparisons'' and ``Price-to-CV Comparisons'' sections of this 
notice.
1. Home Market Viability
    In accordance with section 773(a)(1)(B) 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 (i.e., the aggregate volume 
of home market sales of the foreign like product is greater than or 
equal to five percent of the aggregate volume of U.S. sales), we 
separately compared the aggregate volume of YUSCO's and Chia Far's home 
market sales of the foreign like product to the aggregate volume of 
their U.S. sales of subject merchandise. Because the aggregate volume 
of YUSCO's and Chia Far's home market sales of the foreign like product 
is greater than five percent of the aggregate volume of their U.S. 
sales of subject merchandise, we determined that the home market is 
viable for each of these respondents and have used the home market as 
the comparison-market.
2. Arm's-Length Test
    YUSCO reported that it made sales in the home market to affiliated 
and unaffiliated end users and distributors/retailers. The Department 
may calculate NV based on sales to an affiliated party only if it is 
satisfied that the prices charged to the affiliated party are 
comparable to the prices at which sales were made to parties not 
affiliated with the producer, i.e., sales at arm's-length. See section 
773(f)(2) of the Act and 19 CFR 351.403(c). Where the home market 
prices charged to an affiliated customer were, on average, found not to 
be arm's-length prices, sales to the affiliated customer were excluded 
from our analysis. To test whether YUSCO's sales to affiliates were 
made at arm's-length prices, the Department compared the starting 
prices of sales to affiliated and unaffiliated customers net of all 
movement charges, direct selling expenses, and packing. Pursuant to 19 
CFR 351.403(c), and in accordance with the Department's practice, when 
the prices charged to affiliated parties were, on average, between 98 
and 102 percent of the prices charged to unaffiliated parties for 
merchandise comparable to that sold to the affiliated party, we 
determine that the sales to the affiliated party were at arm's-length 
prices. See Antidumping Proceedings: Affiliated Party Sales in the 
Ordinary Course of Trade, 67 FR 69186 (November 15, 2002). YUSCO's 
affiliated home market customer did not pass the arm's-length test. 
Therefore, we have considered the downstream sales from this affiliate 
to the first unaffiliated customer.
3. Cost of Production (``COP'') Analysis
    In the previous administrative review in this proceeding, the 
Department determined that YUSCO and Chia Far sold foreign like product 
in the home market at prices below the cost of producing the 
merchandise and excluded such sales from the calculation of NV. Based 
on the results of the previous administrative review, the Department 
has determined that there are reasonable grounds to believe or suspect 
that during the instant POR, YUSCO and Chia Far sold foreign like 
product in the home market at prices below the cost of producing the 
merchandise. See section 773(b)(2)(A)(ii) of the Act. As a result, the 
Department initiated a cost of production inquiry for both YUSCO and 
Chia Far.

A. Calculation of COP

    In accordance with section 773(b)(3) of the Act, for each unique 
foreign like product sold by a respondent during the POR, we calculated 
a weighted-average COP based on the sum of the respondent's materials 
and fabrication costs, home market selling general and administrative 
(``SG&A'') expenses, including interest expenses, and packing costs. 
Except as noted below, we relied on the COP data submitted by YUSCO in 
its cost and supplemental cost questionnaire responses. For these 
preliminary results, we revised the COP information submitted by YUSCO 
as follows: We increased the reported cost of major inputs to reflect 
the higher of the transfer price or market price as required by section 
773(f)(2) of the Act. We adjusted YUSCO's reported interest expense 
ratio by subtracting net foreign exchange gains from interest expenses. 
We adjusted YUSCO's reported G&A expense ratio to exclude exchange 
gains incurred on accounts payable and to include employee bonuses and 
director's remuneration. See Analysis Memorandum for the Preliminary 
Results of Review for Stainless Steel Sheet and Strip in Coils From 
Taiwan--Yieh United Steel Corp., Ltd. (July 30,

[[Page 48220]]

2004) (``YUSCO Preliminary Analysis Memorandum'').
    We relied on the COP data submitted by Chia Far in its cost and 
supplemental cost questionnaire responses, and for purposes of these 
preliminary results, we have made no changes to Chia Far's COP data in 
conducting the cost test. See Analysis Memorandum for the Preliminary 
Results of Review for Stainless Steel Sheet and Strip in Coils From 
Taiwan--Chia Far Industrial Factory Co., Ltd. (July 30, 2004) (``Chia 
Far Preliminary Analysis Memorandum'').

B. Test of Home Market Prices

    In order to determine whether sales had been made at prices below 
the COP, on a product-specific basis we compared each respondent's 
weighted-average COPs, adjusted as noted above, to the prices of its 
home market sales of foreign like product, as required under section 
773(b) of the Act. In accordance with section 773(b)(1)(A) and (B) of 
the Act, in determining whether to disregard home market sales made at 
prices less than the COP we examined whether such sales were made: (1) 
In substantial quantities within an extended period of time; and (2) at 
prices which permitted the recovery of all costs within a reasonable 
period of time. We compared the COP to home market sales prices, less 
any applicable movement charges and discounts.

C. Results of the COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were made at prices 
less than the COP, we did not disregard any below-cost sales of that 
product because the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product were made at prices less than the COP during the POR, we 
determined such sales to have been made in ``substantial quantities'' 
and within an extended period of time pursuant to sections 773(b)(2)(B) 
and (C) of the Act. In such cases, because we used POR average costs, 
we also determined, in accordance with section 773(b)(2)(D) of the Act, 
that such sales were not made at prices which would permit recovery of 
all costs within a reasonable period of time.
    Based on this test, we disregarded below-cost sales. Where all 
sales of a specific product were at prices below the COP, we 
disregarded all sales of that product.

Price-to-Price Comparisons

    Where it was appropriate to base NV on prices, we used the prices 
at which the foreign like product was first sold for consumption in 
Taiwan, in the usual commercial quantities, in the ordinary course of 
trade, and, to the extent possible, at the same level of trade 
(``LOT'') as the comparison EP or CEP sale.
    We based NV on the prices of home market sales to unaffiliated 
customers and to affiliated customers to whom sales were made at arm's-
length prices. We made price adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act. In accordance with sections 773(a)(6)(A), 
(B), and (C) of the Act, where appropriate, we deducted from the 
starting price rebates, warranty expenses, movement expenses, home 
market packing costs, credit expenses and other direct selling expenses 
and added U.S. packing costs and, for NVs compared to EPs, credit 
expenses, and other direct selling expenses. In accordance with the 
Department's practice, where all contemporaneous matches to a U.S. sale 
resulted in difference-in-merchandise adjustments exceeding 20 percent 
of the cost of manufacturing the U.S. product, we based NV on CV.

Price-to-CV Comparisons

    In accordance with section 773(a)(4) of the Act, we based NV on CV 
when we were unable to compare the U.S. sale to a home market sale of 
an identical or similar product. For each unique SSSS product sold by 
the respondent in the United States during the POR, we calculated a 
weighted-average CV based on the sum of the respondent's materials and 
fabrication costs, SG&A expenses, including interest expenses, packing 
costs, 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 Taiwan. We based selling expenses on weighted-average actual home 
market direct and indirect selling expenses. In calculating CV, we 
adjusted the reported costs as described in the COP section above.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same LOT as the EP or CEP sales. The NV LOT is that of the 
starting-price sales in the comparison market or, when NV is based on 
CV, that of the sales from which we derive SG&A expenses and profit. 
For EP sales, the U.S. LOT is also the level of the starting price 
sale, which is usually from the exporter to the importer. For CEP 
sales, it is the level of the constructed sale from the exporter to the 
importer. The Department adjusts the CEP, pursuant to section 772(d) of 
the Act, prior to performing the LOT analysis, as articulated by 19 CFR 
351.412. See Micron Technology, Inc. v. United States, 243 F.3d, 1301, 
1315 (Fed. Cir. 2001).
    To determine whether NV sales are at a different LOT than the EP or 
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 Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(A)(7)(B) of 
the Act (the CEP offset provision). See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Carbon Steel Plate from South 
Africa, 62 FR 61731 (November 19, 1997).
    In determining whether separate LOTs exist, we obtained information 
from YUSCO and Chia Far regarding the marketing stages for the reported 
U.S. and home market sales, including a description of the selling 
activities performed by YUSCO and Chia Far for each channel of 
distribution. Generally, if the reported LOTs are the same, the 
functions and activities of the seller at each level should be similar. 
Conversely, if a party reports that LOTs are different for different 
groups of sales, the selling functions and activities of the seller for 
each group should be dissimilar.
    In the present review, neither YUSCO nor Chia Far requested a LOT 
adjustment (in addition, Chia Far did not request a CEP offset). 
However, in order to determine whether an adjustment was necessary, in 
accordance with the principles discussed above, we examined information 
regarding the distribution

[[Page 48221]]

systems in both the United States and home markets, including the 
selling functions, classes of customer, and selling expenses.
YUSCO
    YUSCO reported that it sold foreign like product in the home market 
through one channel of distribution and at one LOT. See YUSCO's October 
31, 2003 Questionnaire Response at B-29. In this channel of 
distribution, YUSCO provided the following selling functions: inland 
freight, invoicing, packing, warranty services, and technical advice. 
Because there is only one sales channel in the home market involving 
similar functions for all sales, we preliminarily determine that there 
is one LOT in the home market.
    In addition, YUSCO reported that it sold subject merchandise to 
customers in the United States through one channel of distribution and 
at one LOT. See YUSCO's October 21, 2003 Questionnaire Response at A-
12. In this channel of distribution, YUSCO provided the following 
selling functions: arranging freight and delivery, invoicing, and 
packing. YUSCO did not incur any expenses in the United States for its 
U.S. sales. Because there is only one sales channel in the United 
States involving similar functions for all sales, we preliminarily 
determine that there is one LOT in the United States.
    Based upon our analysis of the selling functions performed by 
YUSCO, we preliminarily determine that YUSCO sold foreign like product 
and subject merchandise at the same LOT. Despite the fact that YUSCO 
provided technical advice and warranty services in the home market, but 
not the U.S. market, these services were rarely provided in the home 
market and thus, there is no significant difference between the selling 
functions performed in the home and U.S. markets. Therefore, we 
preliminarily determine that a LOT adjustment is not warranted.
Chia Far
    Chia Far reported in its responses that, during the POR, it sold 
subject merchandise in the home market directly to two types of 
customers, distributors and end users, through one channel of 
distribution. Chia Far provided the same selling functions for home 
market sales, such as providing technical advice, making freight and 
delivery arrangements, processing orders, providing after-sale 
warehousing, providing after-sale packing services, performing warranty 
services, and post-sale processing. See Chia Far's Section A 
Questionnaire Response (AQR) at Exhibit A-6 (October 1, 2003). Based on 
the similarity of the selling functions and the fact that one channel 
of distribution serviced the two types of customers, we determine that 
the respondent's home market sales constitute one LOT.
    For the U.S. market, Chia Far reported that they made sales to 
unaffiliated distributors directly and through its U.S. affiliate, 
Lucky Medsup. Since the Department bases the LOT of CEP sales on the 
price in the United States after making CEP deductions under section 
772(d) of the Act, we based the LOT of Chia Far's CEP sales on the 
price after deducting selling expenses.
    Chia Far performed the same selling functions, such as arranging 
freight and delivery, providing after-sale packing services, processing 
orders, providing technical advice, and performing warranty services 
for all U.S. customers, including Lucky Medsup. See AQR at Exhibit A-6. 
Therefore, based on the similarity of selling functions to the same 
customer type, we preliminarily determine that Chia Far's U.S. sales 
constitute one LOT.
    Because there is only one LOT in the home market, any difference in 
the NV and U.S. LOTs cannot be quantified. Therefore, a LOT adjustment 
is not possible.
    Because a LOT adjustment is not possible, the Department examined 
whether to adjust NV pursuant to section 773(a)(7)(B) of the Act (the 
CEP offset provision). In order to determine whether NV is at a more 
advanced LOT than the CEP transactions, the Department compared home 
market selling activities with those for CEP transactions after 
deducting the expenses identified in section 772(d) of the Act. The 
expenses identified in section 772(d) of the Act are associated with 
selling activities occurring in the United States. After making these 
deductions, the Department determined that the differences between the 
home and U.S. market selling activities do not support a finding that 
Chia Far's sales in the home market were made at a more advanced LOT 
than the CEP sales. Specifically, Chia Far engaged in the following 
selling activities in both the home and U.S. markets: Providing 
technical advice, warranty services, freight and delivery arrangements, 
packing, and order processing. See AQR at Exhibit A-6 and A-7. In the 
U.S. market, Chia Far arranged international freight and delivery and 
marine insurance, a function it did not perform in the home market. 
Additionally, because of the additional activity required to ship 
subject merchandise to U.S. customers and to Lucky Medsup, Chia Far 
engaged in arranging freight and delivery of subject merchandise to the 
U.S. market at a greater level of intensity than it did in the home 
market. On the other hand, Chia Far engaged in post-sale processing and 
post-sale warehousing in the home market, but not the U.S. market. 
While Chia Far may have engaged in certain selling activities in the 
home market that it did not perform in the U.S. market, according to 
Chia Far the significance of these activities is minimal. Chia Far 
stated in its questionnaire response that it was not requesting a CEP 
offset. See AQR at A-12. Given the similarities in selling functions 
between the home and U.S. markets and the minimal difference in the 
level at which Chia Far performed certain selling functions unique to 
the home market, the Department preliminarily finds that there is not 
sufficient evidence on the record indicating that home market sales 
were made at a more advanced LOT than U.S. sales. Thus, the Department 
has not granted Chia Far a CEP offset.

Currency Conversion

    Pursuant to section 773A(a) of the Act, we converted amounts 
expressed in foreign currencies into U.S. dollar amounts based on the 
exchange rates in effect on the dates of the U.S. sales, as certified 
by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margins exist for the period July 1, 
2002 through June 30, 2003:

------------------------------------------------------------------------
                                                       Weighted-average
           Manufacturer/exporter/reseller                   margin
                                                         (percentage)
------------------------------------------------------------------------
Yieh United Steel Corporation (YUSCO)...............                0.00
Chia Far Industrial Factory Co., Ltd. (Chia Far)....                1.03
Yieh Mau Corporation................................               21.10
Goang Jau Shing Enterprise Co., Ltd.................               21.10

[[Page 48222]]

 
PFP Taiwan Co., Ltd.................................               21.10
Yieh Loong Enterprise Company Ltd...................               21.10
Tang Eng Iron Works Company, Ltd....................               21.10
Yieh Trading Corporation............................               21.10
Chien Shing Stainless Steel Company Ltd.............               21.10
------------------------------------------------------------------------

Duty Assessments

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. According to 19 CFR 351.212(b)(1), 
where possible, the Department calculated an importer-specific 
assessment rate for merchandise subject to this review. Where the 
importer-specific assessment rate is above de minimis, we will instruct 
CBP to assess the importer-specific rate uniformly on the entered 
customs value of all entries of subject merchandise made by the 
importer during the POR. For the respondents receiving dumping margins 
based upon AFA, the Department will instruct CBP to liquidate entries 
according to the AFA ad valorem rate. For the respondents for whom the 
review was rescinded, the Department will instruct CBP to assess 
antidumping duties at the cash deposit rate in effect on the date of 
the entry. The Department will issue appropriate appraisement 
instructions directly to CBP within 15 days of publication of the final 
results of review.

Cash Deposit Rates

    The following cash deposit requirements will be effective 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 Act: (1) The cash deposit rate for each of the 
reviewed companies will be the rate listed in the final results of this 
review (except if the rate for a particular company is de minimis, 
i.e., less than 0.5 percent, no cash deposit will be required for that 
company); (2) for previously reviewed or investigated companies not 
listed above, the cash deposit rate will continue to be the company-
specific rate published for the most recent review 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) the 
cash deposit rate for all other manufacturers or exporters will 
continue to be 12.61 percent, the ``all others'' rate established in 
the LTFV investigation. See Final Determination 64 FR 30592. These 
required cash deposit rates, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.

Public Comment

    According to 19 CFR 351.224(b), the Department will disclose any 
calculations performed in connection with the preliminary results of 
review within 10 days of publicly announcing the preliminary results of 
review. Any interested party may request a hearing within 30 days of 
publication of this notice. See 19 CFR 351.310(c). If requested, a 
hearing will be held 44 days after the date of publication of this 
notice, or the first workday thereafter. Interested parties are invited 
to comment on the preliminary results. The Department will consider 
case briefs filed by interested parties within 30 days after the date 
of publication of this notice. Also, interested parties may file 
rebuttal briefs, limited to issues raised in case briefs. The 
Department will consider rebuttal briefs filed not later than five days 
after the time limit for filing case briefs. Parties who submit 
arguments are requested to submit with each argument (1) a statement of 
the issue, (2) a brief summary of the argument, and (3) a table of 
authorities. Further, we request that parties submitting written 
comments provide the Department with a diskette containing the public 
version of those comments. Unless the deadline is extended pursuant to 
section 751(a)(3)(A) of the Act, the Department will issue the final 
results of this administrative review, including the results of our 
analysis of the issues raised by the parties in their comments, within 
120 days of publication of the preliminary results. The assessment of 
antidumping duties on entries of merchandise covered by this review and 
future deposits of estimated duties shall be based on the final results 
of this review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) 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 Act.

    Dated: July 30, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-18153 Filed 8-6-04; 8:45 am]
BILLING CODE 3510-DS-P