[Federal Register Volume 70, Number 151 (Monday, August 8, 2005)]
[Notices]
[Pages 45668-45675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15639]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-427-814]


Preliminary Results of Antidumping Duty Administrative Review: 
Stainless Steel Sheet and Strip in Coils from France

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

SUMMARY: In response to requests from Ugine and ALZ France S.A. (U&A 
France) (the Respondent), and Allegheny Ludlum Corporation, AK Steel, 
Inc., North American Stainless, United Steelworkers of America, AFL-
CIO/CLC, Butler Armco Independent Union, and Zanesville Armco 
Independent Organization (collectively, the Petitioners), the U.S. 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on stainless steel sheet and strip 
in coils (SSSS) from France for the period July 1, 2003, through June 
30, 2004 (POR). The Department preliminarily finds that U&A France's 
sales of SSSS in the United States were made at less than normal value 
(NV). If these preliminary results are adopted in the final results of 
this administrative review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties on entries of U&A 
France's merchandise during the period of review. The preliminary 
results are listed in the section titled ``Preliminary Results of 
Review,'' below.

EFFECTIVE DATE: August 8, 2005.

FOR FURTHER INFORMATION CONTACT: Sean Carey, AD/CVD Operations, Office 
6, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 1401 Constitution

[[Page 45669]]

Avenue, NW., Washington, DC 20230; (202) 482-3964.

Background

    On July 27, 1999, the Department published the amended final 
determination and antidumping duty order on SSSS from France. See 
Notice of Amended Final Determination of Sales at Less Than Fair Value 
and Antidumping Duty Order; Stainless Steel Sheet and Strip in Coils 
from France, 64 FR 40562 (July 27, 1999). On July 1, 2004, the 
Department published a notice of ``Opportunity to Request 
Administrative Review'' of the antidumping duty order on SSSS from 
France for the period July 1, 2003, through June 30, 2004. See Notice 
of Opportunity to Request Administrative Review of Antidumping Duty or 
Countervailing Duty Order, Finding, or Suspended Investigation, 69 FR 
39903 (July 1, 2004). On July 30, 2004, the Petitioners and U&A France, 
a producer and exporter of subject merchandise, requested that the 
Department conduct a review of U&A France's sales or entries of 
merchandise subject to the Department's antidumping duty order on SSSS 
from France. On August 30, 2004, in accordance with section 751(a) of 
the Act, the Department published a notice of initiation of this 
antidumping duty administrative review for the period July 1, 2003, 
through June 30, 2004. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews and Requests for Revocation in Part, 69 FR 
52857 (August 30, 2004).
    On September 16, 2004, the Department issued a questionnaire to U&A 
France. On November 19, 2004, U&A France filed its response to Section 
A through E. On December 1, 2004, U&A France submitted a revised 
version of the computer file format table, which was submitted in the 
November 19, 2004 response.
    On January 25, 2005, the Petitioners submitted comments on U&A 
France's response to Section A of the Department's questionnaire. On 
January 27, 2005, the Petitioners submitted comments on U&A France's 
response to section D and E of the Department's questionnaire. On 
February 4, 2005, the Petitioners submitted their comments on U&A 
France's response to section B and C of the Department's questionnaire.
    On February 15, 2005, the Department issued a supplemental 
questionnaire for section A to U&A France. On February 25, 2005, the 
Department issued supplemental questionnaires for section B and C to 
U&A France.
    On March 7, 2004, the Department extended the time limit for the 
preliminary results of the antidumping duty administrative review. See 
Notice of Extension of Time Limit for the Preliminary Results of 
Antidumping Duty Administrative Review: Stainless Steel Sheet and Strip 
in Coils from France, 70 FR 10985 (March 7, 2005).
    On March 22, 2005, U&A France filed its response to the section A 
supplemental questionnaire. On April 1, 2005, U&A France filed its 
response to section B and C supplemental questionnaire. On May 3, 2005, 
the Department issued a section D and E supplemental questionnaire to 
U&A France. On May 27, 2005, U&A France filed its response to the 
section D and E supplemental questionnaire. On June 15, 2005, the 
Department issued a second supplemental section D questionnaire to U&A 
France. On June 24, 2005, U&A France filed its response to the second 
supplemental section D questionnaire.
    On June 27, 2005 the Petitioners filed comments on the section A-C 
supplemental questionnaire responses for U&A France. On July 8, 2005, 
the Department issued a third supplemental section D questionnaire to 
U&A France. On the same date, U&A France filed its sales reconciliation 
with the Department. On July 15, 2005, U&A France filed its response to 
the third supplemental section D questionnaire.
    On July 28, 2005, U&A France responded to Petitioners' comments 
dated June 27, 2005. On July 29, 2005, the Department issued a second 
supplemental questionnaire regarding sections A, B, and C to clarify a 
number of issues raised by the Petitioners. U&A France's response is 
due after the issuance of the preliminary results of this review. In 
accordance with 19 CFR 351.301(c), parties will have 10 days to comment 
on the new information. Any decision reached by the Department 
concerning these issues will be reflected in the final results of this 
review.

Scope of the Order

    The products covered by this order are certain stainless steel 
sheet and strip in coils. Stainless steel is an alloy steel containing, 
by weight, 1.2 percent or less of carbon and 10.5 percent or more of 
chromium, with or without other elements. The subject sheet and strip 
is a flat-rolled product in coils that is greater than 9.5 mm in width 
and less than 4.75 mm in thickness, and that is annealed or otherwise 
heat treated and pickled or otherwise descaled. The subject sheet and 
strip may also be further processed (e.g., cold-rolled, polished, 
aluminized, coated, etc.) provided that is maintains the specific 
dimensions of sheet and strip following such processing.
    The merchandise subject to this order is currently classifiable in 
the Harmonized Tariff Schedule of the United States (HTSUS) at 
subheadings: 7219.13.0031, 7219.13.0051, 7219.13.0071, 7219.1300.81\1\, 
7219.14.0030, 7219.14.0065, 7219.14.0090, 7219.32.0005, 7219.32.0020, 
7219.32.0025, 7219.32.0035, 7219.32.0036, 7219.32.0038, 7219.32.0042, 
7219.32.0044, 7219.33.0005, 7219.33.0020, 7219.33.0025, 7219.33.0035, 
7219.33.0036, 7219.33.0038, 7219.33.0042, 7219.33.0044, 7219.34.0005, 
7219.34.0020, 7219.34.0025, 7219.34.0030, 7219.34.0035, 7219.35.0005, 
7219.35.0015, 7219.35.0030, 7219.35.0035, 7219.90.0010, 7219.90.0020, 
7219.90.0025, 7219.90.0060, 7219.90.0080, 7220.12.1000, 7220.12.5000, 
7220.20.1010, 7220.20.1015, 7220.20.1060, 7220.20.1080, 7220.20.6005, 
7220.20.6010, 7220.20.6015, 7220.20.6060, 7220.20.6080, 7220.20.7005, 
7220.20.7010, 7220.20.7015, 7220.20.7060, 7220.20.7080, 7220.20.8000, 
7220.20.9030, 7220.20.9060, 7220.90.0010, 7220.90.0015, 7220.90.7060, 
and 7220.90.0080. Although the HTSUS subheadings are provided for 
convenience and customs' purposes, the Department's written description 
of the merchandise under the order is dispositive.
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    \1\ Due to changes to HTSUS numbers in 2001, 7219.13.0030, 
7219.13.0050, 7219.13.0070, and 7219.13.0080 are now 7219.13.0031, 
7219.13.0051, 7219.13.0071, and 7219.13.0081, respectively.
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    Excluded from the order are the following: (1) Sheet and strip that 
is not annealed or otherwise heat treated and pickled or otherwise 
descaled, (2) sheet and strip that is cut to length, (3) plate (i.e., 
flat-rolled stainless sheet products of a thickness of 4.75 mm or 
more); (4) flat wire (i.e., cold-rolled sections, with a prepared edge, 
rectangular in shape, of a width of not more than 9.5 mm), and (5) 
razor blade steel. Razor blade steel is a flat-rolled product of 
stainless steel, not further worked than cold-rolled (cold-reduced), in 
coils, of a width of not more than 23 mm and a thickness of 0.266 mm or 
less, containing, by weight, 12.5 to 14.5 percent chromium, and 
certified at the time of entry to be used in the manufacture of razor 
blades. See Chapter 72 of the HTSUS, ``Additional U.S. Note'' 1(d).
    Flapper valve steel is also excluded from the scope of the order. 
This

[[Page 45670]]

product is defined as stainless steel strip in coils containing, by 
weight, between 0.37 and 0.43 percent carbon, between 1.15 and 1.35 
percent molybdenum, and between 0.20 and 0.80 percent manganese. This 
steel strip contains, by weight, phosphorus of 0.025 percent or less, 
silicon of between 0.20 and 0.50 percent, and sulfur of 0.020 percent 
or less. The product is manufactured by means of vacuum arc remelting, 
with exclusion controls for sulphide of no more than 0.04 percent and 
for oxide of no more than 0.05 percent. Flapper valve steel has a 
tensile strength of between 210 and 300 ksi, yield strength of between 
170 and 270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between 
460 and 590. Flapper valve steel is most commonly used to produce 
specialty flapper valves in compressors.
    Also excluded is a product referred to as suspension foil, a 
specialty steel product used in the manufacture of suspension 
assemblies for computer disk drives. Suspension foil is described as 
302/304 grade or 202 grade stainless steel of a thickness between 14 
and 127 microns, with a thickness tolerance of plus-or-minus 2.01 
microns, and surface glossiness of 200 to 700 percent Gs. Suspension 
foil must be supplied in coil widths of not more than 407 mm, and with 
a mass of 225 kg or less. Roll marks may only be visible on one side, 
with no scratches of measurable depth. The material must exhibit 
residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm 
over 685 mm length.
    Certain stainless foil for automotive catalytic converters is also 
excluded from the scope of this order. This stainless steel strip in 
coils is a specialty foil with a thickness of between 20 and 110 
microns used to produce a metallic substrate with a honeycomb structure 
for use in automotive catalytic converters. The steel contains, by 
weight, carbon of no more than 0.030 percent, silicon of no more than 
1.0 percent, manganese of no more than 1.0 percent, chromium of between 
19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of 
no more than 0.045 percent, sulfur of no more than 0.03 percent, 
lanthanum of less than 0.002 or greater than 0.05 percent, and total 
rare earth elements of more than 0.06 percent, with the balance iron.
    Permanent magnet iron-chromium-cobalt alloy stainless strip is also 
excluded from the scope of this order. This ductile stainless steel 
strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 
percent cobalt, with the remainder of iron, in widths 228.6 mm or less, 
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic 
remanence between 9,000 and 12,000 gauss, and a coercivity of between 
50 and 300 oersteds. This product is most commonly used in electronic 
sensors and is currently available under proprietary trade names such 
as ``Arnokrome III.'' \2\
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    \2\ ``Arnokrome III'' is a trademark of the Arnold Engineering 
Company.
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    Certain electrical resistance alloy steel is also excluded from the 
scope of this order. This product is defined as a non-magnetic 
stainless steel manufactured to American Society of Testing and 
Materials (ASTM) specification B344 and containing, by weight, 36 
percent nickel, 18 percent chromium, and 46 percent iron, and is most 
notable for its resistance to high temperature corrosion. It has a 
melting point of 1390 degrees Celsius and displays a creep rupture 
limit of 4 kilograms per square millimeter at 1000 degrees Celsius. 
This steel is most commonly used in the production of heating ribbons 
for circuit breakers and industrial furnaces, and in rheostats for 
railway locomotives. The product is currently available under 
proprietary trade names such as ``Gilphy 36.'' \3\
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    \3\ ``Gilphy 36'' is a trademark of Imphy, S.A.
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    Certain martensitic precipitation-hardenable stainless steel is 
also excluded from the scope of this order. This high-strength, ductile 
stainless steel product is designated under the Unified Numbering 
System (UNS) as S45500-grade steel, and contains, by weight, 11 to 13 
percent chromium, and 7 to 10 percent nickel. Carbon, manganese, 
silicon and molybdenum each comprise, by weight, 0.05 percent or less, 
with phosphorus and sulfur each comprising, by weight, 0.03 percent or 
less. This steel has copper, niobium, and titanium added to achieve 
aging, and will exhibit yield strengths as high as 1700 Mpa and 
ultimate tensile strengths as high as 1750 Mpa after aging, with 
elongation percentages of 3 percent or less in 50 mm. It is generally 
provided in thicknesses between 0.635 and 0.787 mm, and in widths of 
25.4 mm. This product is most commonly used in the manufacture of 
television tubes and is currently available under proprietary trade 
names such as ``Durphynox 17.'' \4\
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    \4\ ``Durphynox 17'' is a trademark of Imphy, S.A.
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    Finally, three specialty stainless steels typically used in certain 
industrial blades and surgical and medical instruments are also 
excluded from the scope of this order. These include stainless steel 
strip in coils used in the production of textile cutting tools (e.g., 
carpet knives).\5\ This steel is similar to AISI grade 420 but 
containing, by weight, 0.5 to 0.7 percent of molybedenum. The steel 
also contains, by weight, carbon of between 1.0 and 1.1. percent, 
sulfur of 0.020 percent or less, and includes between 0.20 and 0.30 
percent copper and between 0.20 and 0.50 percent cobalt. This steel is 
sold under proprietary names such as ``GIN4 Mo.'' The second excluded 
stainless steel strip in coils in similar to AISI 420-J2 and contains, 
by weight, carbon of between 0.62 and 0.70 percent, silicon of between 
0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, 
phosphorus of no more than 0.025 percent and sulfur of no more than 
0.020 percent. This steel has a carbide density on average of 100 
carbide particles per 100 square microns. An example of this product is 
``GIN5'' steel. The third specialty steel has a chemical composition 
similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, 
molybdenum of between 1.15 and 1.35 percent, but lower manganese of 
between 0.20 and 0.80 percent, phosphorus of no more than 0.025 
percent, silicon of between 0.20 and 0.50 percent, and sulfur of no 
more than 0.020 percent. This product is supplied with a hardness of 
more than Hv 500 guaranteed after customer processing, and is supplied 
as, for example, ``GIN6.'' \6\
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    \5\ This list of uses is illustrative and provided for 
descriptive purposes only.
    \6\ ``GIN4 Mo,'' ``GIN5'' and ``GIN6'' are the proprietary 
grades of Hitachi Metals America, Ltd.
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Affiliation

    U&A France and Imphy Ugine Precision (IUP) are wholly owned 
subsidiaries of Usinor S.A. (Usinor). See Section A Response of Ugine & 
ALZ France S.A., dated November 19, 2004, at 18 (Section A Response). 
Usinor, Arbed, S.A. (Arbed), and Aceralia Corporacion Siderurgica, S.A. 
(Aceralia) comprise the Arcelor Group. Id. at 1, n.2. In the U.S. 
market, U&A France made sales through one affiliated U.S. company: 
Arcelor Stainless USA, Inc. (AUSA). IUP made sales in the United States 
through two affiliated U.S. companies: Rahns Specialty Metals, Inc. 
(Rahns), which ceased operations in December 2003, and thereafter Hood 
& Co., Inc. (Hood). AUSA also sold to an affiliate, Arcelor Stainless 
Processing, LLC (ASP) and to unaffiliated customers. ASP resold subject 
merchandise to unaffiliated customers both with and without further 
processing. AUSA is wholly owned by Arcelor USA Holding, Inc., which is 
owned by Arcelor Project, Usinor, Matthey Et Cie S.A. Sidarfin and 
Arcelor International. See Section A Response, at 16. These companies 
are

[[Page 45671]]

owned by Arcelor, Usinor, and Aceralia. Id.
    We note that there are no significant changes to the ownership 
structure of these companies since the last review. As a result, the 
Department preliminarily finds, as we have in all previous reviews, 
that U&A France, IUP and its U.S. resellers are affiliated. See 
Stainless Steel Sheet and Strip in Coils from France: Preliminary 
Results of Antidumping Administrative Review, 69 FR 47892 (August 6, 
2004) (Preliminary Results Fourth Review).

Collapsing of Affiliated Parties

    In accordance with 19 CFR 351.401, the Department preliminarily 
finds that it is appropriate to treat U&A France and IUP as a single 
entity for purposes of calculating a dumping margin. See Memorandum to 
Maria MacKay, Acting Office Director, through Sean Carey, Program 
Manager, from Sebastian Wright, Analyst, Stainless Steel Sheet and 
Strip in Coils From France; Collapsing of Ugine & Alz, Franc, S.A. and 
Imphy Ugine Precision, (August 1, 2005), on file in the Central Records 
Unit (CRU), Room B-099 of the main Commerce Building.

Normal Value Comparison

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

A. Home Market Viability

    In accordance with section 773(a)(1) of the Act, to determine 
whether there were sufficient sales in the home market to serve as a 
viable basis for calculating NV (i.e., the aggregate volume of home 
market sales of the foreign like product is greater than or equal to 
five percent of the aggregate volume of U.S. sales), we compared U&A 
France's volume of home market sales of the foreign like product to the 
volume of U.S. sales of the subject merchandise. Pursuant to section 
773(a)(1)(B) of the Act, because U&A France's aggregate volume of home 
market sales of the foreign like product during the POR was greater 
than five percent of its aggregate volume of U.S. sales for the subject 
merchandise, we determined that the home market was viable.

B. Arm's-Length Test

    U&A France reported that it made sales in the home market to 
affiliated end users and resellers during the POR. In accordance with 
19 CFR 351.403(c), the Secretary may calculate NV based on sales to an 
affiliated party only if satisfied that the price is comparable to the 
price at which the exporter or producer sold the foreign like product 
to a person who is not affiliated with the seller.
    To test whether U&A France's sales were made at arm's length, we 
compared the starting prices of sales to affiliated and unaffiliated 
customers net of all movement charges, direct selling expenses, 
discounts, and packing. Where identical merchandise was not sold to 
unaffiliated customers, we based the comparisons on sales of the most 
similar merchandise. Where prices to the affiliated party were on 
average between 98 and 102 percent of the price to the unrelated party, 
we determined that sales made to the related party were at arm's 
length. See Antidumping Proceedings: Affiliated Party Sales in the 
Ordinary Course of Trade, 67 FR 69186 (November 15, 2002). We have 
included in our NV calculations U&A France's sales to affiliated 
customers that passed the Department's arm's-length test. Conversely, 
certain sales to affiliated customers that did not pass the arm's-
length test have been excluded from our NV calcuation.
    U&A France's sales to PUM, a reseller, did not pass the arm's-
length test. In accordance with 19 CFR 351.403(d), the Secretary 
normally will not calculate NV based on the downstream sales by an 
affiliated parties if the total sales of the foreign like product by an 
exporter or producer to affiliated parties account for less than five 
percent of the reporter's or producer's sales of the foreign like 
product in the market in question. In the instant case, U&A France's 
sales to affiliates in the home market account for more than five 
percent of the total value of U&A Frances's home market sales. 
Therefore, the department cannot disregard the downstream sales of the 
affiliated party in the calculation of NV. U&A France, however, did not 
provide PUM's downstream sales information.
    Section 776(a)(2) of the Act provides that if an interested party: 
(A) Withholds information that has been requested by the Department; 
(B) fails to provide such information in a timely manner or in the form 
of manner requested, subject to subsections 782(c)(1) and (e) of the 
Act; (C) significantly impedes a determination under the antidumping 
statute; or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination. In its response to the Department's questionnaire, U&A 
France claimed, as it has in prior reviews, that sales by PUM were 
insignificant and would not be used as matches for U.S. sales because 
the product sold by PUM would not match to a sale of merchandise in the 
United States. See Section A Supplemental Questionnaire Response at 24 
(March 22, 2005) (Supplemental Section A Response). U&A France also 
again claimed that it would be difficult to collect all of the 
information requested by the Department. Id. In a subsequent 
questionnaire we asked U&A France why is contended that it should not 
have to report the downstream sales for PUM. Id. U&A France reiterated 
that it would endure an undue burden in providing the downstream sales 
for PUM and asked the Department to rely on the sales by U&A France to 
PUM Id. U&A France did not provide any of the requested downstream 
sales information in the database provided with the submission, not did 
it include that information in any subsequently reported datasets.
    Consistent with sections 776(a)(2)(A) and (B) of the act, because 
U&A France withheld information requested by the department, we are 
applying facts otherwise available. In addition, section 776(b) of the 
Act provides that, if the Department finds that an interested party 
``has failed to cooperate by not acting the best of its ability to 
comply with a requested information,'' the Department may use 
information that is adverse to the interests of that party as facts 
otherwise available. In this case, even after receiving the 
Department's supplemental request, U&A France has refused to provide 
downstream information for PUM, claiming that to do so would be overly 
burdensome given the insignificant volume of this reseller's sales 
compare to the total volume of home market sales and that the product 
sold by this reseller would not be matched to products sold in the 
United States. In the prior administrative review, U&A France also 
refused to provide this information, and the Department applied adverse 
facts available to these downstream sales. See Preliminary Results 
Forth Review at 47896-47897.
    Because U&A France explicitly refused to provide the requested 
downstream sales by PUM, the department preliminarily finds that, in 
accordance with section 776(b) of the

[[Page 45672]]

Act, the application of partial adverse facts available is appropriate. 
As adverse facts available or U&A France's sales to PUM, we will use 
the higher of the price charged to PUM by U&A France (the ``upsteam'' 
price) or the price charged for the most similar product purchased in 
the home market by an unaffiliated customer. In selecting this 
information as adverse facts available, we took into account the small 
volume of sales involved.

C. Date of Sale

    As stated at 19 CFR 351.401(i), the Department normally will use 
the invoice date as the date of sale unless another date better 
reflects the date upon which the exporter or producer establishes the 
essential terms of sale. U&A France reported the invoice date as the 
date of sale for both home market and U.S. sales. In the prior segment 
of this proceeding, we found that invoice date is the correct date of 
sale for U.S. and home-market sales. See Preliminary Results Fourth 
Review at 47897. Nothing has changed in U&A France's sales process or 
channels of distribution since the prior review that would cause the 
Department to revisit its prior decision. Accordingly, the Department 
preliminarily finds that invoice date is the proper date of sale for 
both home market and U.S. sales.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
SSSS products covered by the ``Scope of the Order'' section of this 
notice and sold in the home market during the POR, to be foreign like 
products for the purpose of determining appropriate product comparisons 
to U.S. sales of SSSS products. We relied on nine characteristics to 
match U.S. sales of subject merchandise to comparison sales of the 
foreign like product (listed in order of preference): (1) Grande; (2) 
hot/cold rolled; (3) gauge; (4) surface finish; (5) metallic coating; 
(6) non-metallic coating; (7) width; (8) temper; and (9) edge trim. 
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 questionnaire.

Normal Value

    After testing home market viability and whether home market sales 
were at prices below the cost of production, we calculated NV as noted 
in the ``Price-to-Constructed Value (CV) Comparison'' and ``Price-to-
Price Comparisons'' sections of this notice.

Cost of Production Analysis

    Because we disregarded sales below the cost of production in the 
most recently completed segment of this proceeding, we have reasonable 
grounds to believe or suspect that sales by U&A France in its home 
market were made at prices below the cost of production (COP), pursuant 
to section 773(b)(1) of the Act. See Stainless Steel Sheet and Strip in 
Coils from France: Final Results Fourth Review, 70 FR 7240 (February 
11, 2005). Therefore, pursuant to section 773(b)(1) of the Act, we 
conducted a COP analysis of home market sales by U&A France as 
described below.

A. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of U&A France's cost of materials 
and fabrication for the foreign like product, plus amounts for selling, 
general and administrative expenses (SG&A), including interest 
expenses, and packing costs. We relied on the COP data submitted by U&A 
France in its May 27, 2005, cost questionnaire response. U&A France 
submitted two sets of cost data, one based on monthly costs and the 
other based on the weighted-average cost for the POR.
    U&A France argues that because raw material prices increased 
significantly during the POR, the Department should depart from its 
normal practice of calculating an average COP for each CONNUM and 
instead use average monthly COP. See Section D response dated November 
19, 2004, at page 42. Pursuant to 19 CFR 351.414(d)(3), for purposes of 
these preliminary results, we have relied on the weighted-average cost 
for the POR instead of the monthly costs reported by U&A France because 
fluctuating raw material prices were not significant enough for us to 
depart from our standard practice of using one weighted average COP for 
the POR. See Memorandum to the File: Analysis of Monthly Costs 
Submitted by Ugine & Alz France, S.A. from Christopher J. Zimpo, 
(August 1, 2005).

B. COP test of Home Market Prices

    We compared the weighted-average COP for U&A France to home market 
sales of the foreign like product to determine whether these sales had 
been made at prices below the COP as required under section 773(b) of 
the Act. 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 
sections 773(b)(1)(A) and (B) of the Act. On a product-specific basis, 
we compared the COP to home market prices, less any applicable billing 
adjustments, movement charges, discounts, and direct and indirect 
selling expenses.

C. Results of the COP Test

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

Calculation of Constructed Value

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of U&A France's cost of materials, fabrication, SG&A 
(including interest expenses), U.S. packing costs, and profit. In 
accordance with section 773(e)(2)(A) of the Act, we based SG&A and 
profit on the amounts incurred and realized by U&A France 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.

Export Price and Constructed Export Price

    In accordance with seciton 772(a) of the Act, export price (EP) is 
the price at which the subject merchandise is first sold (or agreed to 
be sold) before the date of importation by the producer or exporter of 
the subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States. In accordance with section 772(b) of 
the Act, constructed export price (CEP) is

[[Page 45673]]

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.
    For purposes of this review, U&A France classified all of its 
reported U.S. sales of SSSS as CEP sales. During the review period U&A 
France made sales to the United States through its U.S. based 
affiliates, AUSA, Rahns, Hood, and ASP, which resold the merchandise to 
unaffiliated customers. Therefore, because U&A France's U.S. sales were 
made by AUSA, Rahns, Hood and ASP after the subject merchandise was 
imported into the United States, it is appropriate to classify these 
sales as CEP sales.
    We calculated the CEP in accordance with section 772(b) of the Act. 
We based CEP on the packed ex-warehouse or delivered prices to 
unaffiliated purchasers in the United States. We also made deductions 
for the following movement expenses, where appropriate, in accordance 
with section 772(c)(2)(A) of the Act: foreign inland freight from plant 
to distribution warehouse, international freight, marine insurance, 
U.S. inland freight from port to warehouse, U.S. inland freight from 
warehouse/plant to the unaffiliated customer, U.S. warehouse expenses, 
other U.S. transportation expense, wharfage expenses, and customs 
duties. In accordance with section 772(d)(1) of the Act, we deducted 
selling expenses associated with economic activities occurring in the 
United States, including direct selling expenses, inventory carrying 
costs, credit, warranty expenses, commissions, and other indirect 
selling expenses.
    For products that were further manufactured by ASP after 
importation, readjusted the starting price for all costs of further 
manufacturing in the United States, in accordance with section 
772(d)(2) of the Act. In calculating the cost of further manufacturing 
for ASP, we relied upon the further manufacturing information provided 
by U&A France.
    We deducted the profit allocated to expenses listed under sections 
772(d)(1) and (d)(2), in accordance with sections 772(d)(3) and 772(f) 
of the Act. In accordance with section 772(f) of the Act, we computed 
profit based on total revenues realized on sales in both the U.S. and 
home markets, less all expenses associated with those sales. We then 
allocated profit to expenses incurred with respect to U.S. economic 
activity (including further manufacturing costs), based on the ratio of 
total U.S. expenses to total expenses for both the U.S. and home market 
in accordance with section 772(f). We also adjusted the starting price 
for billing adjustments, discounts, rebates, other revenues and freight 
revenue.

Price-to-Constructed Value 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 identical or similar 
merchandise that is not disregarded due to the cost test. For these 
preliminary results, we did not use CV for NV because we were able to 
find a home market match of identical or similar merchandise that was 
not disregarded due to the cost test under 19 CFR 351.405(a) for each 
product sold in the United States.

Price-to-Price Comparisons

    For those product comparisons for which there were sales at prices 
above the COP, we based NV on prices to unaffiliated home market 
customers or prices to affiliated customers that were determined to be 
at arm's length. Where appropriate, we deducted discounts, rebates, 
credit expenses, warranty expenses, inland freight, inland insurance, 
and warehousing expense. We also adjusted the starting price for 
billing adjustments, freight revenue, other revenues, and direct 
selling expenses. We also made adjustments, where applicable, for home 
market indirect selling expenses to offset U.S. commissions in CEP 
comparisons. We made adjustments, where appropriate, for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act. Additionally, in accordance with sections 
773(a)(6)(A) and (B), we deducted home market packing costs and added 
U.S. packing costs.
    For reasons discussed in the ``Level of Trade'' section below, we 
allowed a CEP offset for comparisons made at different levels of trade. 
To calculate the CEP offset, we deducted the home market indirect 
selling expenses (less any offset of U.S. commissions) from NV for home 
market sales that were compared to U.S. CEP sales.We limited the home 
market indirect selling expense deduction by the amount of the indirect 
selling expenses deducted in calculating the CEP as required under 
section 772(d)(1)(D) of the Act.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV using sales in the comparison market at 
the same level of trade (LOT) at the U.S. sales. See 19 CFR 351.412. 
The NV LOT is the level of the starting-price sale in the comparison 
market. For CEP sales it is the level of the constructed sales from the 
exporter to the importer. See 19 CFR 351.412. U&A France classified all 
of its U.S. sales as CEP and the Department's analysis found no 
indication that the sales were not CEP sales.
    To determine whether NV sales are at a different LOT than CEP 
sales, we examine selling functions between the producer and the 
unaffiliated or affiliated customer (if the arm's-length test is 
passed) for home market sales, and between the producer and the 
affiliated customer for CEP sales. However, if the selected comparison 
market sales are at a different LOT than the CEP sales, and a 
consistent pattern of price differences is manifested between the sales 
on which NV is based and other home market sales at the same LOT as the 
export transaction, we make a LOT adjustment under section 773(a)(7)(A) 
of the Act. Finally, for CEP sales, if the NV LOT is more remote from 
the factory than the CEP LOT and there is no basis for determining a 
consistent pattern of price differences, we adjust NV under section 
773(a)(7)(B) of the Act (the CEP offset provision). See, e.g., Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 
(November 19, 1997). For CEP sales, we consider only the selling 
activities reflected in the price after the deduction of expenses and 
CEP profit under section 772(d) of the Act. See Micron Technology, Inc. 
v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). We expect 
that, if the claimed LOTs are the same, the functions and activities of 
the seller should be similar. Conversely, if a party claims that the 
LOTs are different for different groups of sales, the functions and 
activities of the seller should be dissimilar. See Porcelain-on-Steel 
Cookware from Mexico: Final Results of Administrative Review, 65 FR 
30068 (May 10, 2000).
    In the home market, U&A France sells directly to the customer and 
through an affiliated service center, U&A FS. IUP sells directly to 
customers. U&A France reported three channels of distribution, two 
customer categories, and one level of trade. We found that, in the home 
market, U&A France preforms a variety of distinct selling functions 
including: Strategy planning and marketing, customer sales contact, 
production planning and order evaluation, advertising, warranty, 
technical service, administrative, and freight and delivery

[[Page 45674]]

in both customer categories. See Section A Response of Ugine & ALZ 
France, Vol. 1, Appendix A-8 (November 19, 2004) (Appendix A-8). We 
examined the selling functions performed for the two customer 
categories and found there were no significant differences in selling 
functions performed. Therefore, we preliminarily find that the three 
home market channels of distribution to the two customer categories 
constitute one level of trade.
    U&A France reported four channels of distribution, three customer 
categories, and one level of trade in the U.S. market. U&A France's 
channels of distribution and customer categories within each channel 
are as follows: (1) AUSA sold subject merchandise to unaffiliated end 
users and unaffiliated service centers/processors; (2) AUSA sold 
subject merchandise to ASP with ASP sold to unaffiliated end users. (3) 
AUSA sold subject merchandise imported from U&A France via Arcelor 
Canada to ASP which sold the subject merchandise to unaffiliated end 
users; and (4) IUP sold merchandise to Rahns and Hood which sold to 
unaffiliated end users. See Appendix A-8. As explained in U&A France's 
Section A Response, U&A France performed very few selling activities 
for the U.S. Sales because most selling functions were performed by the 
U.S. sales affiliates (AUSA, Rahns, Hood, and ASP). We examined the 
selling functions performed and found that there were only minor 
differences with respect to the degree to which the U.S. affiliates 
performed those selling function in all channels. We preliminarily find 
that U&A Frances U.S. sales channels constitute one LOT. See Memorandum 
to the File through Sean Carey, Program Manager, from Sebastian Wright, 
Analyst, Concerning Stainless Steel Sheet and Strip in Coils from 
France: Analysis Memorandum, (August 1, 2005) (Analysis Memorandum).
    U&A France and its home market affiliates perform all home market 
selling activities. Selling functions for the U.S. market, as indicated 
above, are performed by ASUSA, Rahns and Hood. We compared the U.S. and 
home market LOTs and determined that, after eliminating from 
consideration selling functions performed by ASUSA (pursuant to section 
772(d) of the Act), U&A France's home market sales are made at a 
different and more remote, LOT than its CEP sales. See Analysis 
Memorandum.
    We examined whether a LOT adjustment of CEP offset may be 
appropriate. In this case, U&A France sold at one LOT in the home 
market. Therefore, there is no information available to determine a 
pattern of consistent price differences between the sales on which NV 
is based and the home market sales at the LOT of the export 
transaction, in accordance with the Department's normal methodology as 
described above. See 19 CFR 351.412(d). We do not have record 
information which would allow us to examine pricing patterns based on 
U&A France's sales of other products, and there are no other 
respondents or other record information on which such as analysis could 
be based. Accordingly, because the data available do not provide an 
appropriate basis for making an LOT adjustment, but the LOT in the home 
market is at a more advanced state of distribution than the LOT of the 
CEP transactions, we made a CEP offset adjustment in accordance with 
section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). This offset is 
equal to the amount of indirect selling expenses incurred in the home 
market not exceeding the amount of indirect selling expenses and 
commissions deducted from the U.S. price in accordance with section 
772(d)(1)(D) of the Act. We note that in all prior administrative 
reviews of this order, where similar situations existed, we also 
granted a CEP offset. See, e.g., Preliminary Results Fourth Review at 
47899; See also Stainless Steel Plate in Coils From Belgium: 
Preliminary Results of Antidumping Duty Administrative Review, 70 FR 
32573, 32576 (June 3, 2005).

Current 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.

Assessment Calculation

    U&A France contends that the Department should include in the 
denominator of the Department's assessment calculation the value of 
subject merchandise entered for consumption into the United States, but 
first sold to customers outside of the United States during the POR. 
Specifically, U&A France proposes that in calculating the assessment 
rate, the Department should divide the total dumping duties calculated 
on U.S. sales by the sum of the entered value of the sales reported in 
the U.S. sales database plus the entered value of the sales entered for 
consumption but first sold to customers outside of the United States. 
According to U&A France, ``{i{time} n cases where a respondent imports 
a product for consumption which is physically within the scope of the 
order at the time of entry and subsequently makes the first sales of 
this product to a customer outside the United States, it is the 
Department's practice to add the entered value associated with these 
sales to the denominator in the calculation of the assessment rate in 
order to avoid collecting antidumping duties on these non-subject 
sales. '' See Section A Supplemental, at page 3. U&A France contends 
that its position is supported by prior Department and court 
decisions.\7\
---------------------------------------------------------------------------

    \7\ See Stainless Steel Sheet & Strip in Coils from Mexico: 
Final Results of Antidumping Administrative Review, 67 FR 6490 
(February 12, 2002) at Comment 15 (Mexinox 2002); Stainless Steel 
Sheet & Strip in Coils from Mexico: Final Results of Antidumping 
Administrative Review, 68 FR 6889 (February 11, 2003) and the 
accompanying Issues and Decision Memorandum at Comment 15 (Mexinox 
2003); Stainless Steel Sheet & Strip in Coils from Mexico: Final 
Results of Antidumping Administrative Review, 69 FR 6259 (February 
10, 2004) and accompanying Issues and Decision Memorandum at Comment 
19 (Mexinox 2004); see also Torrington Co. v. United States, 82 F.3d 
1039, 1047 (Fed. Cir. 1996).
---------------------------------------------------------------------------

    The Petitioners counter that the Department's regulations direct 
the Department to calculate the assessment rate for each importer by 
dividing the dumping margin found on the subject merchandise examined 
by the entered value of such merchandise. See 19 CFR 351.212(b)(1). The 
Petitioners assert that the Department recognized that it would deviate 
from the methodology using the entered value of the U.S. sales made 
during the POR in only unusual situation.\8\ They further contend that 
U&A France has not provided sufficient reason for the Department to 
deviate from the methodology mandated by 19 CFR 351.212(b)(1). The 
Petitioners assert that U&A France has not provided any evidence that 
using the entered value of the U.S. sales during the POR will result in 
a significant distortion of the assessment rate. Moreover, the 
Petitioners contend that the record is not clear as to who was the 
importer of record for the sales entered for consumption into the 
customs territory of the United States, but first sold outside the 
United States. According to the Petitioners, there is no basis for the 
Department to determine which importer's assessment calculation should 
have these sales included in the denominator.
---------------------------------------------------------------------------

    \8\ See Antidumping Duties, Countervailing Duties, Proposed 
Rule: Uruguay Round Agreement Act (URAA): Conformance, 61 FR 7308, 
7316-7317 (February 27, 1996).
---------------------------------------------------------------------------

    Based on the information available to the Department at this time, 
we have preliminarily included the value of these non-U.S., suspended 
sales in the denominator of the assessment

[[Page 45675]]

calculations. As noted by U&A France, the Department has previously 
included the value of merchandise entered for consumption into the 
United States, but first sold outside of the United States, in the 
denominator of the importer specific assessment calculations. See 
Mexinox 2002; Mexinox 2003; and Mexinox 2004. In Mexinox 2002, we 
determined that it is appropriate to include the entered value of 
merchandise entered for consumption into the United States, but 
subsequently first sold outside of the United States into the 
denominator of the Department's importer specific assessment 
calculation to ``facilitate the U.S. Customs Service's collection of 
antidumping duties on subject merchandise.'' See Mexinox 2002 and 
accompanying Issues and Decision Memorandum, at comment 15.
    Finally, we disagree with the Petitioners' assertion that we are 
unable to determine who is the importer of record from the record of 
this case. U&A France specifically states that U&A France is the 
importer of record for the sales entered for consumption, but 
subsequently first sold outside of the United States, at Appendix SA-2 
of the supplemental questionnaire response dated March 22, 2005. 
Accordingly, the Department has preliminarily included the entered 
value of the merchandise which was imported for consumption into the 
United States, but subsequently first sold outside of the United States 
in the denominator of the importer specific assessment calculation. A 
more detailed discussion of this issue and the computer code which 
implements this decision is included in the Department's analysis 
memorandum. See Analysis Memorandum.

Preliminary Results of Review

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

          Stainless Steel Sheet and Strip in Coils From France
------------------------------------------------------------------------
      Producer/manufacturer/exporter           Weighted-average margin
------------------------------------------------------------------------
U&A France................................  11.11 percent.
------------------------------------------------------------------------

Duty Assessment

    Upon issuance 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 
these results and for future deposits of estimated duties. For duty 
assessment purposes, we calculated an importer-specific assessment rate 
by dividing the total dumping margins calculated for the U.S. sales to 
the importer by the sum of total entered value of these sales plus the 
entered value of subject merchandise entered for consumption but first 
sold outside of the United States. If the preliminary results are 
adopted in the final results of review, this rate will be used for 
assessment of antidumping duties on all entries of the subject 
merchandise by that importer during the POR.

Revocation of the Order

    On July 12, 2005, the United States International Trade Commission 
(ITC) informed the Department that the revocation of the antidumping 
duty orders on stainless steel sheet and strip from France would not 
likely lead to continuation of recurrence of material injury to an 
industry in the United States within a reasonably foreseeable time. 
Accordingly, the Department will be revoking this antidumping duty 
order effective, July 27, 2004. Therefore, cash deposits of estimated 
antidumping duties are no longer required.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculation 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 written comments in response to these preliminary 
results. Unless extended by the Department, case briefs are to be 
submitted within 30 days after the date of publication of this notice, 
and rebuttal briefs, limited to arguments raised in case briefs, are to 
be submitted no later than five days after the time limit for filing 
case briefs. Parties who submit arguments in this proceeding are 
requested to submit with the argument: (1) A statement of the issues, 
and (2) a brief summary of the argument. Case and rebuttal briefs must 
be served on interested parties in accordance with 19 CFR 351.303(f).
    Also, pursuant to 19 CFR 351.310(c), within 30 days of the date of 
publication of this notice, interested parties may request a public 
hearing on arguments to be raised in the case and rebuttal briefs. 
Unless the Secretary specifies otherwise, the hearing, if requested, 
will be held two days after the date for submission of rebuttal briefs. 
Parties will be notified of the time and location. The Department will 
publish the final results of this administrative review, including the 
results of its analysis of issues raised in any case or rebuttal brief, 
no later than 120 days after publication of these preliminary results, 
unless extended. See 19 CFR 351.213(h).

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 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 occured and the subsequent 
assessment of double antidumping duties.
    These preliminary results of this administrative review and notice 
are issued and published in accordance with sections 751(a)(1) and 
777(i)(1) of the Act.

    Dated: August 1, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-15639 Filed 8-5-05; 8:45 am]
BILLING CODE 3510-DS-M