[Federal Register Volume 69, Number 232 (Friday, December 3, 2004)]
[Notices]
[Pages 70226-70233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3459]



[[Page 70226]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-421-807]


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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests from Nucor Corporation, International 
Steel Group Inc. (ISG) and United States Steel Corporation 
(collectively, petitioners), the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on certain hot-rolled carbon steel flat products (hot-rolled 
steel) from the Netherlands (A-421-807). This administrative review 
covers imports of subject merchandise from Corus Staal BV (Corus 
Staal). The period of review is November 1, 2002 through October 31, 
2003.
    We preliminarily determine that sales of hot-rolled steel from the 
Netherlands in the United States have been made below normal value 
(NV). If these preliminary results are adopted in our final results of 
administrative review, we will instruct U.S. Customs and Border 
Protection (Customs) to assess antidumping duties based on the 
difference between the export price (EP) or constructed export price 
(CEP) and NV. Interested parties are invited to comment on these 
preliminary results. Parties who submit argument in this proceeding are 
requested to submit with the argument: (1) A statement of the issues, 
(2) a brief summary of the argument, and (3) a table of authorities.

DATES: Effective Date: December 3, 2004.

FOR FURTHER INFORMATION CONTACT: David Cordell or Robert James, 
Antidumping and Countervailing Duty Operations, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230, telephone: 
(202) 482-0408 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 29, 2001, the Department published the antidumping duty 
order on hot-rolled steel flat products from the Netherlands. See 
Antidumping Duty Order: Certain Hot-Rolled Carbon Steel Flat Products 
from the Netherlands, 66 FR 59565 (November 29, 2001). On November 3, 
2003, the Department published the opportunity to request 
administrative review of, inter alia, hot-rolled steel from the 
Netherlands for the period November 1, 2002 through October 31, 2003. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 68 FR 
62279 (November 3, 2003).
    In accordance with 19 CFR 351.213(b)(1), on November 26 and 28, 
2003,\1\ petitioners requested that we conduct an administrative review 
of sales of the subject merchandise made by Corus Staal. On December 
24, 2003, the Department published in the Federal Register a notice of 
initiation of this antidumping duty administrative review covering the 
period November 1, 2002 through October 31, 2003. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 68 FR 74550 
(December 24, 2003).
---------------------------------------------------------------------------

    \1\ Nucor and (ISG) filed their requests for administrative 
reviews on November 26, 2003, while United States Steel Corporation 
filed its request for review on November 28, 2003.
---------------------------------------------------------------------------

    On December 29, 2003, the Department issued its antidumping duty 
questionnaire to Corus Staal. Corus Staal submitted its response to 
sections A B, C, D, and E of the questionnaire on February 18, 2004.
    On January 23, 2004, petitioner, United States Steel Corporation, 
requested the Department determine whether antidumping duties have been 
absorbed during the period of review by the respondent Corus Staal. On 
February 19, 2004, the Department issued a letter inviting Corus Staal 
to submit on the record evidence that unaffiliated purchasers will pay 
the antidumping duties that may be assessed on entries during the 
period of review. On March 5, 2004, Corus Staal submitted its response 
to the Department's letter.
    On February 18, 2004, Corus Staal requested the Department to 
excuse certain affiliates, Corus Service Center Maastricht (Feijen), 
Corus Vlietjonge BV, Ijzerleeuw BV and Geertsema Staal BV, from 
reporting home market sales. On April 2, 2004, the Department responded 
affirmatively to the request not to report downstream home market sales 
by these four companies.
    On March 18, 2004, the Department issued a supplemental section A 
questionnaire, to which Corus Staal responded on April 1, 2004. On 
April 2, 2004, the Department issued a supplemental section B and C 
questionnaire. Corus Staal submitted its supplemental section B and C 
response on April 21, 2004. On May 4, 2004, the Department issued a 
second section A supplemental questionnaire, to which Corus Staal 
responded on May 13, 2004. On May 18, 2004, the Department issued a 
verification agenda for a verification visit to Corus Steel USA Inc.'s 
(CSUSA) offices in Schaumberg, Illinois USA. On May 24, 2004, the 
Department issued a section D and E supplemental questionnaire, to 
which Corus Staal filed a response on June 21, 2004. On May 26, 2004, 
Corus Staal filed quantity and value reconciliations as requested in 
section A of the questionnaire.
    On May 27, 2004, petitioners filed comments concerning the 
verification of CSUSA, which was conducted in Schaumburg, Illinois from 
June 2 to June 3, 2004. The verification report was issued on July 13, 
2004. On June 10, 2004, the Department issued a second supplemental 
section C questionnaire, to which Corus Staal filed a response on June 
24, 2004. On July 6, 2004, United States Steel Corporation filed 
comments concerning the preliminary results, to which Corus Staal 
responded on July 16, 2004.
    Because it was not practicable to complete this review within the 
normal time frame, on July 15, 2004, we published in the Federal 
Register our notice of extension of time limit for this review. See 
Certain Hot-Rolled Carbon Steel Flat Products from the Netherlands; 
Antidumping Duty Administrative Review; Extension of Time Limit, July 
15, 2004 (69 FR 42418-42419). This extension established the deadline 
for these preliminary results as November 29, 2004.

Period of Review

    The POR is November 1, 2002, through October 31, 2003.

Scope of the Review

    For purposes of this order, the products covered are certain hot-
rolled carbon steel flat products of a rectangular shape, of a width of 
0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight lengths, 
of a thickness of less than 4.75 millimeters (mm) and of a width 
measuring at least 10 times the thickness. Universal mill plate (i.e., 
flat-rolled products rolled on four faces or in a closed box pass, of a 
width exceeding 150 mm, but not exceeding 1250 mm, and of a thickness 
of not less than 4.0 mm, not in coils and without

[[Page 70227]]

patterns in relief) of a thickness not less than 4.0 mm is not included 
within the scope of this review. Specifically included within the scope 
of this order are vacuum degassed, fully stabilized (commonly referred 
to as interstitial-free (IF)) steels, high strength low alloy (HSLA) 
steels, and the substrate for motor lamination steels. IF steels are 
recognized as low carbon steels with micro-alloying levels of elements 
such as titanium or niobium (also commonly referred to as columbium), 
or both, added to stabilize carbon and nitrogen elements. HSLA steels 
are recognized as steels with micro-alloying levels of elements such as 
chromium, copper, niobium, vanadium, and molybdenum. The substrate for 
motor lamination steels contains micro-alloying levels of elements such 
silicon and aluminum.
    Steel products to be included in the scope of this order, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTS), are products in which: (i) Iron predominates, by 
weight, over each of the other contained elements; (ii) the carbon 
content is 2 percent or less, by weight; and (iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:

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

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

Verification

    The Department verified the information reported by Corus Staal for 
CSUSA's offices in Schaumberg, Illinois from June 2 through June 3, 
2004. The results of this verification are found in the verification 
report dated July 13, 2004, on file in the Central Records Unit of the 
Department in room B-099 of the main Commerce building.

Affiliated-Party Sales Issues

    During the period of review (POR), Corus Staal sold the foreign 
like product to several affiliated resellers in the home market. These 
include Namascor BV (Namascor), a service center wholly owned by Corus 
Staal, and Laura Metaal BV (Laura), a manufacturer and service center 
in which Corus Staal's parent company, Corus Nederland BV, has a 
shareholder interest. For purposes of our analysis, we used Namascor's 
and Laura's sales to unaffiliated customers, and, where Laura consumed 
the subject merchandise purchased from Corus Staal in its manufacturing 
operations, we used Corus Staal's sales to Laura. In addition, Corus 
Staal sold the foreign like product to Feijen Service Center (Feijen), 
a business unit of Corus Service Center Maastricht, Corus Vlietjonge BV 
(Vlietjonge),\2\ also a service center, Ijzerleeuw BV (Ijzerleeuw) and 
Geertsema Staal BV (Geerstema Staal). Both Feijen and Vlietjonge are 
affiliated with Corus Staal through the former British Steel companies, 
whose parent, British Steel PLC, merged with Koninklijke Hoogovens NV 
(now Corus Nederland BV) in October 1999 to form the Corus Group PLC. 
Vlietjonge has a financial interest in Ijzerleeuw and Geerstema Staal, 
but has no management or operational control over either company. In a 
letter dated February 18, 2004, Corus Staal requested an exemption from 
reporting downstream sales by Feijen, Vlietjonge, Ijzerleeuw and 
Geerstema Staal because of the nature and quantity of the products 
sold. On April 2, 2004, the Department excused Corus Staal from 
reporting downstream sales by Feijen, Vlietjonge, Ijzerleeuw and 
Geerstema Staal because of the reasons set out in the Department's 
letter to Corus Staal, dated April 2, 2004. See Letter from Robert 
James to Corus Staal dated April 2, 2004. Therefore, we have used Corus 
Staal's sales to Feijen, Vlietjonge, Ijzerleeuw and Geerstema Staal to 
perform our analysis.
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    \2\ Namascor also resold some of the foreign like product to 
Vlietjonge.
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    In the U.S. market, Corus Staal sold subject merchandise to Thomas 
Steel, a further manufacturer of battery-quality hot band steel. Thomas 
Steel is wholly owned by Corus USA Inc., which in turn is wholly owned 
by Corus Staal's parent company, Corus Nederland BV. Claiming the 
value-added in the United States by Thomas Steel exceeded substantially 
the value of the subject merchandise as imported, Corus Staal utilized 
the ``simplified reporting'' option for the merchandise further 
processed by Thomas Steel. Pursuant to section 772(e) of the Tariff 
Act, of 1930, as amended (the Act), when the subject merchandise is 
imported by an affiliated person and the value added in the United 
States by the affiliated person is

[[Page 70228]]

likely to exceed substantially the value of the subject merchandise, we 
will determine the CEP for such merchandise using the price of 
identical or other subject merchandise, if there is a sufficient 
quantity of sales to provide a reasonable basis for comparison and we 
determine that the use of such sales is appropriate. If there is not a 
sufficient quantity of such sales or if we determine that using the 
price of identical or other subject merchandise is not appropriate, we 
may use any other reasonable basis to determine the CEP. See, e.g., 
Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Review: Gray Portland Cement and Clinker From Mexico, 67 
FR 57379, 57381 (September 10, 2002) (unchanged for final results, 68 
FR 1816 (January 14, 2003)). Consistent with the Department's 
regulations, we have determined for these preliminary results that the 
estimated value added in the United States by Thomas Steel accounted 
for at least 65 percent of the price charged to the first unaffiliated 
customer for the merchandise as sold in the United States, and 
therefore, the value added is likely to exceed substantially the value 
of the subject merchandise. We have also preliminarily determined there 
is a sufficient quantity of sales remaining to provide a reasonable 
basis for comparison and that we have no reason to believe another 
methodology would be appropriate. See the memorandum from David Cordell 
and Robert James to Richard Weible, ``Simplified Reporting'' and Value 
Added in the United States by Thomas Steel,'' dated July 28, 2004.

Duty Absorption

    On January 23, 2004, the petitioner, United States Steel 
Corporation, requested that the Department determine whether 
antidumping duties had been absorbed during the POR by the respondent. 
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 Corus Staal BV sold to unaffiliated customers in the 
United States through itself as the importer of record, because it sold 
to affiliated service centers in the United States, and because this 
review was initiated two years after the publication of the order, we 
will make a duty absorption determination in this segment of the 
proceeding within the meaning of section 751(a)(4) of the Act.
    In determining whether the antidumping duties have been absorbed by 
the respondent during the POR, we presume the 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 agreement between the 
affiliated importer and unaffiliated purchaser) that the unaffiliated 
purchaser will pay the full duty ultimately assessed on the subject 
merchandise. On February 19, 2004, the Department requested evidence 
from the respondent to demonstrate that its U.S. purchasers will pay 
any antidumping duties ultimately assessed on entries during the POR. 
In its response, submitted on March 5, 2004, Corus Staal stated a 
number of points which are summarized in the Duty Absorption background 
section of the Analysis Memorandum accompanying this Federal Register 
notice. Corus Staal argues it has presented evidence that shows Corus 
Staal ``has negotiated terms with its customers to permit Corus to set 
its prices at levels to avoid dumping.''
    Although Corus Staal claims that it has negotiated terms with its 
customers to permit Corus Staal to set its prices at levels to avoid 
dumping, it concedes ``these provisions do not allow for the 
retroactive collection of any additional antidumping duties ultimately 
assessed on the subject merchandise.'' (See Corus Staal's response 
dated March 5, 2004 at page 5.) Furthermore, Corus Staal failed to 
provide an agreement between Corus Staal and its unaffiliated purchaser 
stating the unaffiliated purchaser will pay the full duty ultimately 
assessed on the subject merchandise. Therefore, we preliminarily find 
that antidumping duties have been absorbed by Corus Staal on all U.S. 
sales made through its importer of record, namely Corus Staal.

Fair Value Comparisons

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

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent, covered by the descriptions in the 
``Scope of the Review'' section of this notice, to be foreign like 
products for the purpose of determining appropriate product comparisons 
to U.S. sales of hot-rolled steel from the Netherlands.
    We have relied on the following 11 criteria to match U.S. sales of 
subject merchandise to comparison market sales of the foreign like 
product: Whether painted or not, quality, carbon content level, yield 
strength, thickness, width, whether coil or cut-to-length sheet, 
whether temper rolled or not, whether pickled or not, whether mill or 
trimmed edge, and whether the steel is rolled with or without patterns 
in relief.
    Where there were no sales of identical merchandise in the home 
market to compare to U.S. sales, we compared U.S. sales to the next 
most similar foreign like product on the basis of the characteristics 
and reporting instructions listed in the Department's December 29, 2003 
questionnaire.

Export Price and Constructed Export Price

    Section 772(a) of the Act defines EP as ``the price at which the 
subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the producer or exporter of the subject 
merchandise outside of the United States to an unaffiliated purchaser 
for exportation to the United States, as adjusted under subsection 
(c).'' Section 772(b) of the Tariff Act defines CEP as ``the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under sections 772(c) and 
(d).''
    In the instant review, Corus Staal sold subject merchandise through 
two affiliated steel service centers which further manufacture flat-
rolled steel products: Rafferty-Brown Steel Co., Inc. of Connecticut 
(RBC) and Rafferty-Brown Steel Co. of North Carolina (RBN). Corus Staal 
reported each of these transactions as CEP transactions, and the 
remainder of its U.S. sales of subject merchandise as EP transactions.
    However, after reviewing the evidence on the record of this review, 
we have preliminarily determined that certain of Corus Staal's reported 
EP transactions are properly classified as CEP sales because these 
sales occurred after importation. This determination is consistent with 
section 772(b) of the Act.
    During the POR, Corus Staal executed all agreements with U.S. 
customers and amendments related to those agreements in the 
Netherlands. See Corus Staal's

[[Page 70229]]

February 18, 2004 questionnaire response (February 18, 2004 QR) at 2, 
footnote 13. In addition, Corus Staal also served as the importer of 
record for subject merchandise entered during the POR.
    However, in the case of ``just in time'' (JIT) sales to one 
unaffiliated customer, the invoice was issued after the goods had 
entered the United States. As the invoice date has been found to be the 
date of sale in this review and the first review of this order, the JIT 
sales fail to meet the criteria for EP sales which arise where the 
``the first sale to an unaffiliated person occurs before the goods are 
imported into the United States.'' See the Department's December 29, 
2003, Questionnaire at I-7.
    In its response to the Department's second supplemental section C 
questionnaire, dated June 10, 2004, Corus Staal argues the definition 
provided in the questionnaire is a short hand definition whereas the 
statutory language defines EP sales as those where the goods are 
``first sold (or agreed to be sold) before the date of importation.'' 
(Section 772 (a) of the Act ). See June 24, 2004 second supplemental 
section C questionnaire response (Second SQR) at 4(b). Corus Staal 
argues the relevant frame agreement between Corus Staal and its 
customer was signed prior to importation by Corus Staal in the 
Netherlands, and therefore, the transactions meet the test for EP 
status articulated by the Federal Circuit in its decision in AK Steel. 
AK Steel, 226 F.3d 1361 (Fed. Cir. 2000).
    Petitioner, United States Steel Corporation (USS), argues in 
comments based on the Notice of Final Determination of Sales at Less 
Than Fair Value: Stainless Steel Bar From Korea (Stainless Steel Bar 
from Korea) 67 FR 3,149 (January 23, 2002) and the accompanying Issues 
and Decisions Memorandum at Comment 5 that ``a `frame agreement' is 
irrelevant to the EP/CEP analysis'' and that ``for purposes of the EP/
CEP analysis, therefore, it is the Department's practice to look solely 
at the date that the material terms of sale become established i.e., 
the date of sale, (in the instant case, the invoice date), rather than 
the date of any prior `frame agreement.' '' See July 6, 2004 Comment on 
behalf of USS at 3.
    Corus Staal responds to petitioner's comments and argues the fact 
pattern in the Stainless Steel Bar from Korea case was different from 
the present case. Corus Staal claims no sales agreements were executed 
after importation, with the only sales document being the frame 
agreement, which was signed by Corus Staal in the Netherlands before 
importation. See Corus Staal's July16, 2004 response at Comment 3.
    Corus Staal states in the investigation Corus Staal had argued that 
``the invoice should be controlling, as no material terms were 
established in the initial sales agreements, the frame agreements.'' It 
states that the Department, over Corus Staal's objections, agreed with 
petitioners in determining ``although Corus Staal initially reaches the 
agreement with the U.S. customer on the estimated overall volume and 
pricing of the merchandise, CSUSA provides the final written 
conformation of the agreement, setting forth the agreed prices and 
quantities to the U.S. customer.'' Corus Staal argues that because of 
this, the Department decided to treat the reported EP sales as CEP. See 
Corus Staal's July 16, 2004 response at Comment 3. Corus Staal claims 
the ``frame agreement, and not the invoice, was controlling on this 
issue'' and is still therefore the law of the case. See id. at 4.
    Corus Staal further argues that in Stainless Steel Bar from Korea, 
the Department looked at the ``totality of circumstances involving the 
sales process'' and in this situation, the facts of this case ``support 
a finding that the JIT sales should be treated as EP transactions,'' as 
the frame agreement is executed in the Netherlands, the frame agreement 
is entered into before importation and Corus Staal retains title to the 
merchandise until it passes to the customer. See id. at 5.
    Corus Staal contends the AK Steel case is not relevant as it did 
not address ``how the statutory phrase `first sold (or agreed to be 
sold) before the date of importation' should be interpreted.'' See id. 
at 5. Corus Staal maintains the fact pattern was different in that AK 
Steel did not involve ``transactions between a producer/exporter in the 
exporting country with an unaffiliated U.S. customer.'' See id. at 6.
    Corus Staal also claims that because the transactions took place 
outside the United States, the Federal Circuit made clear that the 
``locus of the parties at the time of transaction does matter'' and it 
is ``unreasonable to suggest that the Federal Circuit intended to 
prohibit ex quay or delivered transactions made directly by a foreign 
producer from being treated as EP sales.'' At id. 8.
    Corus Staal argues the frame agreement is controlling in this case 
based upon the Department's position in the investigation. However, in 
this review Corus Staal has maintained the invoice date ``better 
reflects the time that the material terms of sale become fixed.'' See 
Corus Staal's April 1, 2004 SQR at 16. Corus Staal further argues that 
``price and other changes up to the time of shipment (and sometimes 
later) are not infrequent'' and the use of ``invoice date most 
accurately reflects commercial reality as to the time that the sale 
took place and at which the material terms of sale become final and 
fixed.'' Id. at 16. This is confirmed in its April 21, 2004 response, 
in which Corus Staal states ``until the time of invoicing/shipment, 
Corus Staal and/or the customer can change the quantity, price and/or 
the specific product to be shipped.''
    In Corus Staal's own words, the invoice date is the date used to 
determine the date of sale as changes often do occur between the frame 
agreement and the date of invoice. If this is the case, it is hard to 
argue that the frame agreement is the governing document in determining 
when a sale is agreed upon or when it is executed. Accordingly, if the 
Department accepts in this review the date of invoice as the date of 
sale, it should also accept such reasoning in determining the relevant 
date for the EP/CEP analysis. The statue clearly defines EP sales as 
those where the goods are ``first sold (or agreed to be sold) before 
the date of importation'' and as the date of invoice is the governing 
date, it is clear that in the case of the JIT sales, the sales do not 
meet the criterion of having being sold before importation. As Corus 
Staal itself acknowledges, the AK Steel case did not address ``how the 
statutory phrase 'first sold (or agreed to be sold) before the date of 
importation' should be interpreted'' or what should happen in cases 
where there are ``transactions between a producer/exporter in the 
exporting country with an unaffiliated U.S. customer.'' See Corus 
Staal's July 16, 2004 response at Comments 5 and 6.
    As such, the Department has preliminarily determined the sales 
classified as JIT sales should be reclassified as CEP sales for the 
purposes of this review. It is clear that based upon invoice date as 
the date of sale, such invoicing is taking place after importation, and 
therefore, the sales do not meet the criteria for EP sales as any sale 
or agreement to sell is not set until the invoice is actually issued. 
Furthermore, the goods are physically in the United States when the 
invoice is issued. The Department determines such sales are CEP because 
section 772 (b) of the Act defines CEP as ``the price at which the 
subject merchandise is first sold (or agreed to be sold) in the United 
States before or after the date of importation by or for the account of 
the producer or exporter of such merchandise or by a seller affiliated 
with the producer or exporter, to a

[[Page 70230]]

purchaser not affiliated with the producer or exporter.'' EP sales are 
clearly defined as taking place ``before the date of importation'' 
whereas CEP sales are defined as taking place ``before or after the 
date of importation'' and do not preclude sales from the producer to 
the unaffiliated purchaser.
    With respect to the remainder of Corus Staal's reported EP sales 
(i.e., those sales to unaffiliated U.S. customers made between November 
1, 2002 and October 31, 2003), we have continued to classify these as 
EP transactions because the contracts governing these sales were signed 
by Corus Staal in the Netherlands, and because such sales were invoiced 
before importation.
    For those sales which we are classifying as EP transactions, we 
calculated the price of Corus Staal's EP sales in accordance with 
section 772(a) of the Act. We based EP on the packed, delivered, duty 
paid prices for export to end users and service centers in the U.S. 
market. We adjusted gross unit price for billing errors, freight 
revenue, certain minor processing expenses, tolling expenses and early 
payment discounts, where applicable. We also made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act; 
these included, where appropriate, foreign inland freight, foreign 
brokerage and handling, international freight, U.S. customs duties, 
U.S. inland freight, U.S. brokerage expenses, and U.S. warehousing 
expenses.
    For those transactions categorized as CEP sales, we calculated 
price in conformity with section 772(b) of the Act. We based CEP on the 
packed, delivered, duty paid prices to unaffiliated purchasers in the 
United States. Where applicable, we made adjustments to gross unit 
price for billing errors, freight revenue, certain minor processing 
expenses, and early payment discounts. We also made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act; 
these included, where appropriate, foreign inland freight, foreign 
brokerage and handling, international freight, U.S. customs duties, 
U.S. inland freight, U.S. brokerage expenses, and U.S. warehousing 
expenses. In accordance with section 772(d)(1) of the Act, we deducted 
those selling expenses associated with economic activities occurring in 
the United States, including direct selling expenses (imputed credit, 
warranty, etc.), inventory carrying costs, and indirect selling 
expenses. For CEP sales, we also made an adjustment for profit in 
accordance with section 772(d)(3) of the Act. Finally, with respect to 
subject merchandise to which value was added in the United States by 
RBC and RBN prior to sale to unaffiliated customers, we deducted the 
cost of further manufacture in accordance with section 772(d)(2) of the 
Act.

Section 201 Duties

    The Department notes that merchandise subject to this review is 
subject to duties imposed pursuant to an investigation under section 
201 of the Trade Act of 1974, as amended (section 201 duties). As 
previously determined in the prior review, the Department will not 
deduct section 201 duties from U.S. prices in calculating dumping 
margins because 201 duties are not ``United States import duties'' 
within the meaning of the statute, and to make such a deduction 
effectively would collect the 201 duties a second time. Our examination 
of the safeguards and antidumping statutes and their legislative 
histories indicates Congress plainly considered the two remedies to be 
complementary and, to some extent, interchangeable. Accordingly, to the 
extent that section 201 duties may reduce dumping margins, this is not 
a distortion of any margin to be eliminated, but a legitimate reduction 
in the level of dumping. See Certain Hot-Rolled Carbon Steel Flat 
Products from the Netherlands Final Results of Antidumping Duty 
Administrative Review 69 FR 33630 (June 16, 2004) and accompanying 
Unpublished Decision Memorandum at Comment 3.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same level of trade (LOT) as the EP/CEP transaction. The 
NV LOT is that of the starting price of the comparison sales in the 
home market or, when NV is based on constructed value (CV), that of the 
sales from which we derive selling, general, and administrative (SG&A) 
expenses and profit. For EP, the LOT is also the level of the starting 
price sale, which is usually from the exporter to the importer. For 
CEP, it is the level of the constructed sale from the exporter to the 
importer.
    To determine whether NV sales are at a different LOT than EP/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 differences in the levels between NV and 
CEP sales affect price comparability, we adjust NV under section 
773(a)(7)(B) of the Act (i.e., the CEP offset provision).
    In implementing these principles in the instant review, we obtained 
information from Corus Staal about the marketing stages involved in its 
reported U.S. and home market sales, including a description of the 
selling activities performed by Corus Staal and the level to which each 
selling activity was performed for each channel of distribution. In 
identifying LOTs for U.S. CEP sales, we considered the selling 
functions reflected in the starting price after any adjustments under 
section 772(d) of the Act.
    In the home market, Corus Staal reported two channels of 
distribution (sales by Corus Staal and sales through its affiliated 
service centers Namascor and Laura) and three customer categories (end 
users, steel service centers, and trading companies). See, e.g., Corus 
Staal's February 18, 2004 QR at A-19. For both channels of distribution 
in the home market, Corus Staal performed similar selling functions, 
including strategic and economic planning, advertising, freight and 
delivery arrangements, technical/warranty services, and sales logistics 
support. The remaining selling activities performed did not differ 
significantly by channel of distribution, with the exception of market 
research and research and development activities, which were performed 
only by Corus Staal. See Corus Staal's February 18, 2004 QR at Exhibit 
A-8 and pages A-19 through A-42. One LOT exists for Corus Staal's home 
market sales because channels of distribution do not qualify as 
separate levels of trade when the selling functions performed for each 
channel are sufficiently similar.
    In the U.S. market, Corus Staal reported two channels of 
distribution for its sales of subject merchandise during the POR: EP 
sales made directly to unaffiliated U.S. customers and CEP sales made 
through its affiliated service centers, RBC and RBN. For sales 
classified as EP, Corus Staal reported two customer categories, end 
users and steel service centers. See, e.g., Corus Staal's February 18, 
2004 QR at A-21 and A-22. However, as explained in the

[[Page 70231]]

``Export Price and Constructed Export Price'' section of this notice, 
we have preliminarily determined that certain of Corus Staal's reported 
EP transactions (i.e., sales where invoicing took place after date of 
entry) are properly classified as CEP sales.
    With regard to CEP sales made through RBC and RBN, Corus Staal 
claims ``the home market and U.S. sales made by the affiliated steel 
service centers do constitute a different LOT from the EP and direct 
home market sales made by CSBV.'' See id. at 22. Corus Staal however, 
goes on to say ``it is not claiming a LOT (or CEP offset) in this 
review''as ``the Department had found a single level of trade for all 
of Corus's sales in prior determinations.'' See id. at 23.
    As noted above, we determine the U.S. LOT on the basis of the CEP 
starting price minus the expenses and profit deducted pursuant to 
section 772(d) of the Act. In analyzing whether a CEP offset is 
warranted, we reviewed information provided in section A of Corus 
Staal's questionnaire response regarding selling activities performed 
and services offered in the U.S. and foreign markets. We found there to 
be few differences in the selling functions performed by Corus Staal on 
its sales to affiliated service centers in the United States and those 
performed on its sales to home market customers. For example, Corus 
Staal provided similar freight and delivery services, technical/
warranty assistance, and sales logistics support on its sales to home 
market customers and on its sales to RBC and RBN. See, e.g., Corus 
Staal's February 18, 2004 QR at pages A-19 through A-60. Therefore, the 
Department has preliminarily determined the record does not support a 
finding that Corus Staal's home market sales are at a different, more 
advanced LOT than its CEP sales to RBC and RBN. Accordingly, no CEP 
offset adjustment to NV is warranted for Corus Staal's reported CEP 
sales.
    As to Corus Staal's sales to unaffiliated customers in the United 
States, which we have reclassified as CEP transactions, we considered 
whether a LOT adjustment may be appropriate. As noted above, we have 
preliminarily determined that one LOT exists in the home market, and 
therefore, there is no basis upon which to determine whether there is a 
pattern of consistent price differences between LOTs. Thus, we examined 
whether Corus Staal's home market sales were at a different, more 
advanced LOT than its sales to U.S. unaffiliated customers to determine 
whether a CEP offset was necessary. Comparing the selling activities 
performed and services offered by Corus Staal on its sales to 
unaffiliated customers in the United States to those activities 
performed on its home market sales, we found there to be few 
differences in the selling functions performed by Corus Staal on its 
sales to unaffiliated customers in the United States and those 
performed for sales in the home market. For example, on sales to both 
home market customers and to unaffiliated U.S. customers, Corus Staal 
provided similar strategic and economic planning, freight and delivery 
services, technical/warranty assistance, research and development, and 
sales logistics support. See, e.g., Corus Staal's February 18, 2004 QR 
at pages A-19 through A-60. As a result, we preliminarily find that 
there is not a significant difference in selling functions performed in 
the U.S. and foreign markets on these sales. Thus, we find that Corus 
Staal's home market sales and sales to unaffiliated customers in the 
United States were made at the same LOT; accordingly, no CEP offset 
adjustment is warranted.
    Finally, for those sales which we are continuing to classify as EP, 
we considered whether a LOT adjustment is warranted. Again, comparing 
the selling activities performed and services offered by Corus Staal on 
its sales to unaffiliated customers in the United States to those 
activities performed on its home market sales, we found there to be few 
differences in the selling functions performed by Corus Staal. Thus, we 
find that Corus Staal's home market sales and sales to unaffiliated 
customers in the United States were made at the same LOT, and 
therefore, no LOT adjustment is necessary.

Normal Value

A. Selection of Comparison Market

    To determine whether there is a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV (i.e., the 
aggregate volume of home market sales of the foreign like product is 
greater than five percent of the aggregate volume of U.S. sales), we 
compared the respondent's volume of home market sales of the foreign 
like product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(B) of the Act. Because the 
respondent's aggregate volume of home market sales of the foreign like 
product was greater than five percent of its aggregate volume of U.S. 
sales for the subject merchandise, we determined the home market was 
viable. See, e.g., Corus Staal's February 18, 2004 QR at Attachment A-
2.

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

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

C. Cost of Production Analysis

    Because we disregarded sales of certain products made at prices 
below the cost of production (COP) in the most recently completed 
segment of the proceeding at the time of initiation, i.e., the 
investigation of hot-rolled steel from the Netherlands (see Notice of 
Final Determination of Sales at Less Than Fair Value; Certain Hot-
Rolled Carbon Steel Flat Products From The Netherlands, 66 FR 50408 
(October 3, 2001), as amended, Notice of Amended Final Determination of 
Sales at Less Than Fair Value; Certain Hot-Rolled Carbon Steel Flat 
Products From The Netherlands, 66 FR 55637 (November 2, 2001)), we have 
reasonable grounds to believe or suspect that Corus Staal made sales of 
the foreign like product at prices below the COP, as provided by 
section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by 
Corus Staal.
    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP for each model based on the sum of Corus Staal's 
material and

[[Page 70232]]

fabrication costs for the foreign like product, plus amounts for SG&A 
and packing costs. The Department relied on the COP data reported by 
Corus Staal, except as noted below:
--We excluded interest income from RBC's general and administrative 
(G&A) expense rate calculation.
--We recalculated RBN's G&A expense rate based on RBN's fiscal year 
2003 financial statements.
    For further details regarding these adjustments, see the 
Department's ``Cost of Production, Constructed Value and Further 
Manufacturing Cost Calculation Adjustments for the Preliminary 
Results--Corus Staal BV'' (COP Analysis Memorandum), dated November 29, 
2004.
    Corus Staal reported separate COP databases, one of which 
distinguished between identical control numbers (CONNUMS) produced in 
both its conventional hot-rolling mill and direct sheet plant. For 
purposes of our analysis, however, we are not distinguishing between 
products produced at the two facilities because the type of facility 
used to produce the subject merchandise is not one of the criteria used 
to match U.S. sales of subject merchandise to sales of the foreign like 
product. For a list of the product characteristics considered in our 
analysis, see the section ``Product Comparisons'' above. Thus, we used 
the COP database that did not distinguish between the two production 
methods. We compared the weighted-average COP figures to the home 
market sales prices of the foreign like product as required under 
section 773(b) of the Act, to determine whether these sales had been 
made at prices below COP. On a product-specific basis, we compared the 
COP to home market prices net of billing adjustments, freight revenue, 
certain minor processing expenses, discounts and rebates, and any 
applicable movement charges.
    In determining whether to disregard home market sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) of the Act: whether, within an extended period of 
time, such sales were made in substantial quantities; and whether such 
sales were made at prices which permitted the recovery of all costs 
within a reasonable period of time in the normal course of trade. 
Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent 
of the respondent's home market sales of a given model were at prices 
below the COP, we did not disregard any below-cost sales of that model 
because we determined that the below-cost sales were not made within an 
extended period of time and in ``substantial quantities.'' Where 20 
percent or more of the respondent's home market sales of a given model 
were at prices less than COP, we disregarded the below-cost sales 
because: (1) They were made within an extended period of time in 
``substantial quantities,'' in accordance with sections 773(b)(2)(B) 
and (C) of the Act, and (2) based on our comparison of prices to the 
weighted-average COPs for the POR, they were at prices which would not 
permit the recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(2)(D) of the Act.
    Our cost test for Corus Staal revealed that for home market sales 
of certain models, less than 20 percent of the sales of those models 
were at prices below the COP. We therefore retained all such sales in 
our analysis and used them as the basis for determining NV. Our cost 
test also indicated that for certain models, more than 20 percent of 
the home market sales of those models were sold at prices below COP 
within an extended period of time and were at prices which would not 
permit the recovery of all costs within a reasonable period of time. 
Thus, in accordance with section 773(b)(1) of the Act, we excluded 
these below-cost sales from our analysis and used the remaining above-
cost sales as the basis for determining NV.

D. Constructed Value

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of the Corus Staal's material and fabrication costs, 
SG&A expenses, profit, and U.S. packing costs. We calculated the COP 
component of CV and weight-averaged the CVs reported for identical 
products produced in both the conventional hot-rolling mill and direct 
sheet plant as described above in the ``Cost of Production Analysis'' 
section of this notice. In accordance with section 773(e)(2)(A) of the 
Act, we based SG&A expenses and profit on the amounts incurred and 
realized by the respondent in connection with the production and sale 
of the foreign like product in the ordinary course of trade, for 
consumption in the foreign country. For selling expenses, we used the 
actual weighted-average home market direct and indirect selling 
expenses.

E. Price-to-Price Comparisons

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

F. Price-to-CV Comparisons

    In accordance with section 773(a)(4) of the Act, we base NV on CV 
if we are unable to find a home market match of such or similar 
merchandise. Where appropriate, we made adjustments to CV in accordance 
with section 773(a)(8) of the Act. Where we compared CV to CEP, we 
deducted from CV the weighted-average home market direct selling 
expenses. However, in this review, we have preliminarily determined 
that all U.S. sales match, and therefore, have not based NV on CV.

Currency Conversion

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

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period November 1, 2002, through October 
31, 2003, to be as follows:

------------------------------------------------------------------------
                                                               Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Corus Staal BV (Corus Staal)..............................         4.61
------------------------------------------------------------------------

    The Department will disclose calculations performed in connection 
with these preliminary results of review within five days of the date 
of publication of this notice in accordance with 19 CFR 351.224(b). 
Interested parties may submit case briefs and/or written comments no 
later than 30 days after the date of publication of these preliminary 
results of review. Rebuttal

[[Page 70233]]

briefs and rebuttals to written comments, limited to issues raised in 
the case briefs and comments, may be filed no later than 35 days after 
the date of publication of this notice. Parties who submit argument in 
these proceedings are requested to submit with the argument: (1) A 
statement of the issue, (2) a brief summary of the argument, and (3) a 
table of authorities. An interested party may request a hearing within 
30 days of publication. See CFR 351.310(c). Any hearing, if requested, 
will be held 37 days after the date of publication, or the first 
business day thereafter, unless the Department alters the date pursuant 
to 19 CFR 351.310(d). The Department will issue the final results of 
these preliminary results, including the results of our analysis of the 
issues raised in any such written comments or at a hearing, within 120 
days of publication of these preliminary results.

Assessment Rates

    Upon completion of this administrative review, the Department will 
determine, and Customs shall assess, antidumping duties on all 
appropriate entries. The Department will issue appropriate assessment 
instructions directly to Customs within 15 days of publication of the 
final results of review.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed 
company will be the rate established in the final results of the 
administrative review (except that no deposit will be required if the 
rate is zero or de minimis, i.e., less than 0.5 percent); (2) if the 
exporter is not a firm covered in this review, or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the most recent period for the manufacturer of the 
merchandise; and (3) if neither the exporter nor the manufacturer is a 
firm covered in this review, any previous reviews, or the LTFV 
investigation, the cash deposit rate will be 2.59 percent, the ``all 
others'' rate established in the LTFV investigation. See Antidumping 
Duty Order: Certain Hot-Rolled Carbon Steel Flat Products from the 
Netherlands, 67 FR 59565 (November 29, 2001).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: November 29, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
 [FR Doc. E4-3459 Filed 12-2-04; 8:45 am]
BILLING CODE 3510-DS-P