[Federal Register Volume 69, Number 176 (Monday, September 13, 2004)]
[Notices]
[Pages 55138-55143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2166]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-822]


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

AGENCY: Import Administration, International Trade Administration, U.S. 
Department of Commerce.
SUMMARY: In response to timely requests, the U.S. Department of 
Commerce (the Department) is conducting an administrative review of the 
antidumping duty order on certain corrosion-resistant carbon steel flat 
products (CORE) from Canada for the period August 1, 2002, through July 
31, 2003. The Department preliminarily determines that sales were made 
to the United States at less than normal value (NV) by Stelco Inc. 
(``Stelco''). If these preliminary results are adopted in our final 
results of this administrative review, we will instruct U.S. Customs 
and Border Protection (CBP) to assess antidumping duties on entries of 
Stelco merchandise during the period of review. The Department 
preliminarily determines that sales were not made to the United States 
at less than NV by Dofasco Inc. and Sorevco and Company, Ltd. 
(collectively ``Dofasco''). If these preliminary results are adopted in 
our final results of this administrative review, we will instruct CBP 
to liquidate without regard to antidumping duties entries of Dofasco 
merchandise during the period of review. The preliminary results are 
listed in the section titled ``Preliminary Results of Review,'' infra.

EFFECTIVE DATE: September 13, 2004.

FOR FURTHER INFORMATION CONTACT: Javier Barrientos (Dofasco) or 
Jaqueline Arrowsmith (Stelco), Office VI, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th & 
Constitution Avenue, NW., Washington, DC 20230; telephone: 202-482-2243 
and 202-482-5255, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published the antidumping duty order on CORE from 
Canada on August 19, 1993 (58 FR 44162). On August 1, 2003, the 
Department published in the Federal Register a notice of ``Opportunity 
to Request Administrative Review'' of the antidumping duty order on 
CORE from Canada for the period August 1, 2002, through July 30, 2003. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 68 FR 
45218 (August 1, 2003). Based on timely requests, in accordance with 
section 751(a) of the Act, on September 30, 2003, the Department 
initiated an administrative review of the antidumping duty order on 
corrosion-resistant carbon steel flat products from Canada, covering 
the period August 1, 2002, through July 31, 2003. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, Request for 
Revocation in Part and Deferral of Administrative Reviews, 68 FR 56262 
(September 30, 2003). This administrative review was initiated on the 
following exporters: Continuous Colour Coat, Ltd. (``CCC''), Dofasco 
Inc. (``Dofasco''), Ideal Roofing Company, Ltd. (``Ideal Roofing''), 
Impact Steel Canada, Ltd. (``Impact Steel''), Russel Metals Export 
(``Russel Metals''), Sorevco and Company, Ltd. (``Sorevco''), and 
Stelco Inc. (``Stelco''). On December 19, 2003, the Department 
published a rescission, in part, of its administrative review with 
respect to CCC, Impact Steel, and Ideal Roofing. See Corrosion-
Resistant Carbon Steel Flat Products From Canada: Rescission, in Part, 
of Antidumping Duty Administrative Review, 68 FR 70764 (December 19, 
2003). On March 30, 2004, the Department published a rescission, in 
part, of its administrative review with respect to Russell Metals. See 
Notice of Rescission, in Part, of Antidumping Duty Administrative 
Review: Corrosion-Resistant Carbon Steel Flat Products From Canada, 69 
FR 16521 (March 30, 2004).
    On April 29, 2004, the Department extended the deadline for the 
preliminary results of this antidumping duty administrative review from 
May 2, 2004, until no later than August 30, 2004. See Notice of 
Extension of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review: Corrosion-Resistant Carbon Steel Flat Products 
From Canada, 69 FR 23495 (April 29, 2004).

Period of Review

    The period of review (POR) is August 1, 2002, through July 31, 
2003.

Scope of the Antidumping Duty Order

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

[[Page 55139]]

product clad on both sides with stainless steel in a 20%-60%-20% ratio.

Verification

    International Steel Group (``ISG''), a domestic producer and 
interested party in this administrative review, requested verification 
of Stelco's questionnaire responses in its January 8, 2004 letter to 
the Department. Pursuant to 351.307(b)(1)(v) of the Department's 
regulations, the Secretary will verify factual information in a review 
if:
    (A) A domestic interested party, not later than 100 days after the 
date of publication of the notice of initiation of review, submits a 
written request for verification; and (B) The Secretary conducted no 
verification under this paragraph during either of the two immediately 
preceding administrative reviews.
    The Department did not verify Stelco during either of the two 
immediately preceding reviews, and the request from ISG was within the 
100-day time limit. Therefore, in accordance with 351.307(b)(1)(v) of 
the Department's regulations, the Department conducted verification of 
certain sales and cost information provided by Stelco using standard 
verification procedures, on-site inspection of the manufacturer's 
facilities, and the examination of relevant sales and financial 
records. Our verification results are outlined in the public and 
proprietary versions of the Memorandum to File: Report on the Sales 
Verification of Stelco Inc. in the Tenth Antidumping Duty 
Administrative Review for Certain Corrosion-Resistant Carbon Steel Flat 
Products from Canada, dated August 18, 2004 (``Sales Verification 
Report''), and the Memorandum to File: Report on the Cost Verification 
of Stelco Inc. in the Tenth Antidumping Duty Administrative Review for 
Certain Corrosion-Resistant Carbon Steel Flat Products from Canada, 
forthcoming, which are on file in the Central Records Unit, room B-099 
of the main Commerce Building.
    Pursuant to section 351.307(b)(1)(iv) of the Department's 
regulations, which allows for verification if the Department determines 
that ``good cause'' exists, petitioner submitted requests for 
verification of Dofasco's sales and cost responses on: May 6, 2004; 
June 24, 2004; and, July 30, 2004. Petitioner argues that Dofasco's 
original and supplemental questionnaire responses contained many errors 
and that Dofasco's alleged errors and contradictions in its model-match 
submissions give good cause for the Department to conduct verification. 
See Model-match Criteria section below. To date, the Department has not 
verified Dofasco's sales or cost information.

ANALYSIS

Affiliation and Collapsing

    For purposes of this review, we have collapsed Dofasco, Sorevco, 
and Do Sol Galva Ltd. (DSG) and treated them as a single respondent, as 
we have done in prior segments of the proceeding. See Final 
Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat 
Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and 
Certain Cut-to-Length Carbon Steel Plate From Canada, 58 FR 37099, 
37107 (July 9, 1993), for our analysis regarding collapsing Sorevco. 
There have been no changes to the pertinent facts of this decision, 
such as, for example, ownership structure, that warrant reconsideration 
of our decision to collapse Sorevco. For our analysis regarding 
collapsing DSG, see Memorandum from Javier Barrientos (AD/CVD Financial 
Analyst) through Mark E. Hoadley (Acting Program Manager) to the File; 
Certain Corrosion-Resistant Carbon Steel Flat Products from Canada: 
(Collapsing of Dofasco Inc. (Dofasco) and Do Sol Galva (DSG)), August 
30, 2004, which is on file in the Central Records Unit, room B-099 of 
the main Commerce Building. As we are collapsing Dofasco, Sorevco, and 
DSG for purposes of the preliminary results, we will instruct CBP to 
apply Dofasco's rate to merchandise produced, exported, or processed by 
Sorevco or DSG.
    Consistent with our determination in past segments of this 
proceeding, we have not collapsed Dofasco and its toll producer DJ 
Galvanizing Ltd. Partnership (``DJG'') (formerly DNN Galvanizing Ltd. 
Partnership (``DNN'')) in these preliminary results. Therefore, for 
CORE that is processed by DJG before it is exported to the United 
States, we will, for assessment and cash deposit purposes, instruct CBP 
to: 1) apply Dofasco's rate on merchandise supplied by Dofasco or DSG; 
2) apply the company specific rate on merchandise supplied by other 
previously reviewed companies; and, 3) apply the ``all others'' rate 
for merchandise supplied by companies which have not been reviewed in 
the past. The Department recognizes, however, that given the nature of 
their affiliation, an issue could arise with respect to whether there 
is a potential for manipulation of price or production and, if so, 
whether Dofasco and DJG should receive the same antidumping duty rate. 
Therefore, the Department is soliciting comments on this issue for the 
final results of review.

Model-Match Criteria

    Dofasco and petitioner submitted comments with regard to model-
match criteria on the following dates: January 26, 2004 (Dofasco); May 
5, 2004 (Dofasco); June 2, 2004 (petitioner); June 7, 2004 (Dofasco); 
June 17, 2004 (petitioner); June 21, 2004 (Dofasco); June 24, 2004 
(Petitioner); July 26, 2004 (Dofasco); August 10, 2004 (petitioner); 
and, August 13, 2004 (Dofasco). Dofasco argues that it is proper to 
compare sales of CORE by incorporating a model-match criterion for 
surface characteristic that captures the different applications and 
uses of the products based on that criterion. Dofasco claims that the 
higher cost of CORE for exposed, as opposed to unexposed, applications 
also justifies the inclusion of a new model-match criteria. Petitioner 
argues that this same issue has been brought up in past administrative 
reviews of this proceeding and the Department did not modify the 
criteria. In addition, petitioner states that this is not a new 
technology and that material cost differences are not there as Dofasco 
claims.
    For purposes of the preliminary results, we did not change the 
model-match criteria we use for this antidumping duty order. For 
further discussion, see Memorandum from Javier Barrientos (AD/CVD 
Financial Analyst) through Mark E. Hoadley (Acting Program Manager) to 
Barbara E. Tillman (Director); Preliminary Results: Certain Corrosion-
Resistant Carbon Steel Flat Products from Canada (Model-Match 
Methodology) August 30, 2004.

Product Comparisons

    In accordance with section 771(16) of the Tariff Act of 1930, as 
amended (the Act), we considered all products produced by the 
respondents that are covered by the description in the ``Scope of the 
Antidumping Duty Order'' section, above, and sold in the home market 
during the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the most similar foreign like product 
on the basis of the characteristics listed in Appendix V of the 
Department's November 7, 2003 antidumping questionnaires.

[[Page 55140]]

Normal Value Comparisons

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

Export Price

    In accordance with section 772(a) of the Act, we used EP when the 
subject merchandise was sold, directly or indirectly, to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise warranted by facts on the record. In accordance 
with section 772(b) of the Act, CEP is the price at which 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. As discussed below, based on evidence on 
the record, we conclude that certain sales are made by Dofasco's U.S. 
affiliate, Dofasco U.S.A. (DUSA), and should thus be classified as CEP 
sales. Also as discussed below, we conclude that Dofasco's other sales 
are EP, and that all Stelco sales are EP.
    Dofasco's sales in the United States through DUSA were either 
channel 2 (shipped directly to the U.S. customer) or channel 3 (shipped 
indirectly to the U.S. customer) sales. We find that for channel 2 
sales both parties to the transaction (DUSA and the unaffiliated 
customer) were located in the United States, and that the transfer of 
ownership was executed in the United States. Therefore, consistent with 
our determination in the last review, we are classifying Dofasco's 
Channel 2 sales as CEP sales. See Proprietary Memorandum: 
Classification of Dofasco's sales as either EP or CEP, January 6, 2004.
    For all other sales, while DUSA may be involved in providing some 
sales services, the sales are made by Dofasco. Thus, because these 
sales are made in Canada, we are treating these sales as EP sales. 
Similarly, while Stelco USA is involved in Stelco's U.S. sales, 
evidence on the record indicates that the sales were made by Stelco (in 
Canada), not Stelco USA.
    The Department calculated EP or CEP based on packed prices to 
customers in the United States. We made deductions from the starting 
price (net of discounts and rebates) for movement expenses (foreign and 
U.S. movement, U.S. customs duty and brokerage, and post-sale 
warehousing) in accordance with section 772(c)(2) of the Act and 
section 351.401(e) of the Department's regulations. In addition, for 
CEP sales, in accordance with sections 772(d)(1) and (2) of the Act, we 
deducted from the starting price credit expenses, indirect selling 
expenses, including inventory carrying costs, commissions, royalties, 
and warranty expenses incurred in the United States and Canada 
associated with economic activities in the United States. As in prior 
reviews, certain Dofasco sales have undergone minor further processing 
in the United States as a condition of sale to the customer. The 
Department has deducted the price charged to Dofasco by the 
unaffiliated contractor for this minor further processing from gross 
unit price to determine U.S. price, consistent with Section 772(d)(2) 
of the Act. See Certain Corrosion-Resistant Carbon Steel Flat Products 
and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results 
of Antidumping Duty Administrative Reviews, and Determination Not to 
Revoke in Part, 65 FR 9243 (February 24, 2000) (``Canadian Steel 
5thrdquo;); Certain Corrosion-Resistant Carbon Steel Flat Products and 
Certain Cut-to-Length Carbon Steel Plate from Canada, Preliminary 
Results of Antidumping Duty Administrative Reviews, 64 FR 45228, 45231 
(August 19, 1999); see also Certain Corrosion Resistant Carbon Steel 
Flat Products From Canada: Preliminary Results of Antidumping Duty 
Administrative Review, 68 FR 53105 (September, 9, 2003), for a 
discussion and as finalized, i.e., Certain Corrosion-Resistant Carbon 
Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from 
Canada: Final Results of Antidumping Duty Administrative Review, 69 FR 
2566 (January 16, 2004) (``Canadian Steel 9th'').
    As provided in section 351.401(i) of the Department's regulations, 
we determined the date of sale based on the date on which the exporter 
or producer established the material terms of sale. Dofasco reported 
that, except for long-term contracts and sales of secondary products, 
the date on which all material terms of sale are established is the 
final order acknowledgment or re-acknowledgment date. Therefore, we 
used this reported date as the date of sale. For Dofasco's sales made 
pursuant to long-term contracts, we used date of the contract as date 
of sale. For Dofasco's sales of secondary products for which there is 
no order acknowledgment date, we preliminarily determine that date of 
shipment best reflects the date on which the material terms of sale are 
established. Accordingly, we have relied on the date of shipment as the 
date of sale. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Certain Durum Wheat and Hard Red Spring Wheat from 
Canada, 68 FR 52741 (Sept. 5, 2003) and Accompanying Issues and 
Decision Memorandum at Comment 3 (``Wheat from Canada'').
    Stelco reported that, generally, the date of sale is the date of 
invoice because this is when material terms of sale are fixed. For 
these sales, we used the date of invoice as the date of sale. In those 
instances when the date of shipment occurred prior to the date of 
invoice, Stelco reported the date of shipment as the date of sale. 
Accordingly, for these preliminary results, for these sales we used the 
date of shipment as the date of sale. See, e.g., Wheat from Canada at 
Comment 3.

Normal Value

A. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is five percent or more of the aggregate volume of U.S. sales), we 
compared the volume of each respondent's home market sales of the 
foreign like product to the volume of U.S. sales of subject 
merchandise. See section 773(a)(1)(C) of the Act. Based on this 
comparison, we determined that Dofasco's and Stelco's quantity of sales 
in their home market each exceeded five percent of their sales to the 
United States of CORE. See 19 CFR 351.404(b). Moreover, there is no 
evidence on the record supporting a particular market situation in the 
exporting companies' country that would not permit a proper comparison 
of home market and U.S. prices. Therefore, in accordance with section 
773(a)(1)(B)(i) of the Act, we have based NV on the price at which the 
foreign like product was first sold for consumption in the home market, 
in the usual commercial quantities in the ordinary course of trade and, 
to the extent practicable, at the same level of trade (LOT) as the EP 
or CEP. See `` Level of Trade'' section below.

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

    We used sales to affiliated customers in the home market only where 
we determined such sales were made at

[[Page 55141]]

arm's-length prices (i.e., at prices comparable to the prices at which 
the respondent sold identical merchandise to unaffiliated customers). 
To test whether the sales to affiliates were made at arm's-length 
prices, we compared the unit 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 
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). Where the affiliated party 
transactions did not pass the arm's-length test, all sales to that 
affiliated party have been excluded from the NV calculation. In 
addition, because the aggregate volume of sales to these affiliates is 
less than 5 percent of total home market sales, we did not request 
downstream sales. See 19 CFR 351.403(d); see also Antidumping 
Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 
FR 69186 (November 15, 2002).

C. Cost of Production Analysis

    The Department disregarded certain Dofasco sales that failed the 
cost test in its last completed review. See Canadian Steel 9th. The 
Department disregarded certain Stelco sales that failed the cost test 
in its last completed review. See Canadian Steel 5th. 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 the cost of production (COP). Thus, pursuant 
to section 773(b)(1) of the Act, we examined whether Dofasco's and 
Stelco'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 in 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 a packed condition and ready for shipment. In our sales-below-cost 
analysis, we used home market sales and COP information provided by 
Dofasco and Stelco in their questionnaire responses.
    We compared the weighted-average COPs to home market sales of the 
foreign like product, as required under section 773(b) of the Act, in 
order to determine whether these sales had been made at prices below 
the COP. In determining whether to disregard home market sales made at 
prices below the COP, we examined whether such sales were made (1) 
within an extended period of time in substantial quantities, and (2) at 
prices which permitted the recovery of all costs within a reasonable 
period of time in the normal course of trade, in accordance with 
section 773(b)(1)(A) and (B) of the Act. On a product-specific basis, 
we compared the COP to home market prices, less any movement charges, 
discounts, and direct and indirect selling expenses.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given model were at prices less 
than the COP, we did not disregard any below-cost sales of that model 
because the below-cost sales were not made in substantial quantities 
within an extended period of time. Where 20 percent or more of a 
respondent's sales of a given model were at prices less than the 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)(B) and (C) of the Act. Because we compared 
prices to average costs in the POR, we also determined that the below-
cost prices did not permit the recovery of costs within a reasonable 
period of time, in accordance with section 773(b)(1)(B) of the Act.

D. Constructed Value

    In accordance with section 773(a)(4) of the Act, we used 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.
    For those product comparisons for which there were sales at prices 
above the COP, we based NV on home market prices to affiliated (when 
made at prices determined to be arms-length) or unaffiliated parties, 
in accordance with section 351.403 of the Department's regulations. 
Home market starting prices were based on packed prices to affiliated 
or unaffiliated purchasers in the home market net of discounts and 
rebates. We made adjustments, where applicable, for packing and 
movement expenses, in accordance with sections 773(a)(6)(A) and (B) of 
the Act. We also made adjustments for differences in cost attributable 
to differences in physical characteristics of the merchandise, pursuant 
to section 773(a)(6)(C)(ii) of the Act, and for circumstance-of-sales 
(COS) differences, in accordance with 773(a)(6)(C)(iii) of the Act and 
section 351.410 of the Department's regulations. For comparisons to EP, 
we made COS adjustments to NV by deducting home market direct selling 
expenses (e.g., credit, warranties, and royalties) and adding U.S. 
direct selling expenses. For comparison to CEP, we made COS adjustments 
by deducting home market direct selling expenses pursuant to section 
773(a)(6)(C)(iii) of the Act and section 351.410 of the Department's 
regulations. We offset commissions paid on sales to the United States 
by the lesser of U.S. commissions or comparison (home) market indirect 
selling expenses.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determined NV based on sales in the comparison 
market at the same LOT as U.S. sales. 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.
    To determine whether NV sales are at a different LOT than 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 in the home market. 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

[[Page 55142]]

price comparability, we adjust NV under section 773(a)(7)(B) of the Act 
( the CEP offset provision). See Notice of Final Determination of Sales 
at Less than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
South Africa, 62 FR 61731 (November 19, 1997). 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).
    In the current review, as in the previous review, Dofasco claimed 
that sales in both the home market and the United States market were 
made at different LOTs. In the previous review we concluded that 
Dofasco did sell at different LOTs based on the selling functions 
performed. See Canadian Steel 9th. No new information on the record 
exists suggesting that the distribution systems in either the U.S. or 
Canadian markets, including the selling functions, classes of customer, 
and selling expenses for each respondent, have materially changed. 
Therefore, we have preliminarily concluded that Dofasco did sell at 
different LOTs based on the selling functions performed. However, the 
Department did not find that there existed a pattern of consistent 
price differences among the three levels of trade in the home market. 
See Memorandum from Javier Barrientos (AD/CVD Financial Analyst) 
through Mark E. Hoadley (Acting Program Manager) to the File; Certain 
Corrosion-Resistant Carbon Steel Flat Products from Canada: Analysis of 
Dofasco Inc. (Dofasco) and Do Sol Galva (DSG) for the Preliminary 
Results, (August 30, 2004). Therefore, we did not make LOT adjustments 
when comparing sales at different LOTs. Finally, after comparing the 
CEP LOT with the NV LOT (i.e., after excluding the selling functions 
performed by Dofasco's U.S. affiliate from our analysis) we have 
preliminarily determined that the NV LOT is not more remote from the 
factory than the CEP LOT. As indicated by Exhibit I.A.12 of Dofasco's 
Section A response, dated January 26, 2004, as well as other parts of 
Dofasco's response, the vast majority of selling functions for both 
U.S. and home market sales are performed by Dofasco in Canada. 
Therefore, a ``CEP offset'' is not warranted under section 773(a)(7)(B) 
of the Act.
    In the current review, Stelco stated in its response that it was 
not claiming an LOT adjustment. However, Stelco did provide a chart of 
its selling functions, which we reviewed and analyzed. We also 
discussed these sales functions during our verification of the sales 
process. See Sales Verification Report. As a result of our analysis, we 
have preliminarily concluded that Stelco did not sell at different 
LOTs.

Currency Conversion

    For purposes of the preliminary results, in accordance with section 
773A of the Act, we made currency conversions based on the official 
exchange rates in effect on the dates of the U.S. sales as certified by 
the Federal Reserve Bank of New York.

Preliminary Results of Review

    As a result of this review, we preliminarily find that the 
following weighted-average dumping margins exist:

       Corrosion-Resistant Carbon Steel Flat Products from Canada
------------------------------------------------------------------------
                                                       Weighted-Average
           Producer/Manufacturer/Exporter                   Margin
------------------------------------------------------------------------
Dofasco Inc., Sorevco Inc., Do Sol Galva Ltd........               0.00%
Stelco Inc..........................................               0.02%
------------------------------------------------------------------------

Cash Deposit Requirements

    If the preliminary results are adopted in the final results of 
review, the following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided in section 751(a)(1) 
of the Act: 1) the cash deposit rate for Dofasco, Sorevco, and DSG will 
be that established in the final results of this review for Dofasco 
(and entities collapsed with Dofasco); 2) the cash deposit rate for 
Stelco will be that established in the final results of this review 
(currently de minimis); 3) for previously reviewed or investigated 
companies not covered in this review, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; 4) if the exporter is not a firm covered in this review, a 
prior review, or the original less than fair value (LTFV) investigation 
conducted by the Department, the cash deposit rate will be the rate 
established for the most recent period for the manufacturer of the 
merchandise; 5) if neither the exporter nor the manufacturer is a firm 
covered in this or any previous proceeding conducted by the Department, 
the cash deposit rate will continue to be the ``all others'' rate 
established in the LTFV investigation, which is 18.71 percent. See 
Amended Final Determinations of Sales at Less Than Fair Value and 
Antidumping Orders: Certain Corrosion-Resistant Carbon Steel Flat 
Products and Certain Cut-to-Length Carbon Steel Plate From Canada, 60 
FR 49582 (September 26, 1995). For shipments processed by DJG we will, 
1) apply Dofasco's rate on merchandise supplied by Dofasco or DSG; 2) 
apply the company specific rate on merchandise supplied by other 
previously reviewed companies; and, 3) apply the ``all others'' rate 
for merchandise supplied by companies which have not been reviewed in 
the past. These cash deposit requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.

Duty Assessment

    Upon publication of the final results of review, the Department 
shall determine, and CBP shall assess, antidumping duties on all 
appropriate entries. The Department will issue appraisement 
instructions directly to CBP within fifteen days of publication of the 
final results of review. The final results of this review shall be the 
basis for the assessment of antidumping duties on entries of 
merchandise covered by the results and for future deposits of estimated 
duties. For duty assessment purposes, we calculate an importer-specific 
assessment rate by dividing the total dumping margins calculated for 
the U.S. sales of each importer by the respective total entered value 
of these sales. If the preliminary results are adopted in the final 
results of review, this rate will be used for the assessment of 
antidumping duties on all entries of the subject merchandise by that 
importer during the POR.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification will apply to entries of 
subject merchandise during the period of review produced by companies 
included in these final results of review for which the reviewed 
companies did not know their merchandise was destined for the United 
States. In such instances, we will instruct CBP to liquidate unreviewed 
entries at the ``all others'' rate if there is no rate for the 
intermediate company(ies) involved in the transaction. For a full 
discussion of this clarification, see Notice of Policy Concerning 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to any 
party to

[[Page 55143]]

the proceeding the calculations performed in connection with these 
preliminary results, within five days after the date of publication of 
this notice. Pursuant to 19 CFR 351.309, interested parties may submit 
case briefs in response to these preliminary results no later than 30 
days after the date of publication of this notice. Rebuttal briefs, 
limited to issues raised in case briefs, may be filed no later than 5 
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 issue, (2) a brief summary of the argument, and 
(3) a table of authorities. Further, the Department requests that 
parties submitting written comments provide the Department with an 
additional copy of the public version of any such comments on a 
computer diskette. Case and rebuttal briefs must be served on 
interested parties in accordance with section 351.303(f) of the 
Department's regulations. Any interested party may request a hearing 
within 30 days of publication of this notice. Any hearing, if 
requested, will normally be held two days after the date for submission 
of rebuttal briefs. The Department will issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such written comments or at a hearing, within 
120 days after the publication of this notice, unless extended. See 19 
CFR 351.213(h).

Notification to Interested Parties

    This notice serves as a preliminary reminder to improters of their 
responsibility under regulation 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative revidw and notice is published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: August 30, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E4-2166 Filed 9-10-04; 8:45 am]
BILLING CODE 3510-DS-S