[Federal Register Volume 70, Number 173 (Thursday, September 8, 2005)]
[Notices]
[Pages 53333-53339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4889]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-485-803]


Certain Cut-to-Length Carbon Steel Plate From Romania: 
Preliminary Results of the Antidumping Duty Administrative Review and 
Partial Rescission

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

SUMMARY: The Department of Commerce (``the Department'') is conducting 
an administrative review of the antidumping duty order on Certain Cut-
to-Length Carbon Steel Plate from Romania. The period of the period 
August 1, 2003, to July 31, 2004. We preliminarily determine that sales 
of subject merchandise by Ispat Sidex, S.A. (now known as Mittal Steel 
Galati, S.A. (``MS Galati'') \1\) have been made below normal value 
(``NV''). If these preliminary results are adopted in our final 
results, we will instruct U.S. Customs and Border Protection (``CBP'') 
to assess antidumping duties on appropriate entries. Interested parties 
are invited to comment on these preliminary results. Parties that 
submit comments are requested to submit with each argument (1) a 
statement of the issue(s), and (2) a brief summary of the argument(s). 
We will issue the final results no later than 120 days from the 
publication of this notice.
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    \1\ On June 21, 2005, we determined that MS Galati was the 
successor-in-interest to Ispat Sidex, S.A. See Final Results of 
Changed Circumstances Antidumping Duty Administrative Review: 
Certain Cut-to-Length Carbon Steel Plate from Romania, 70 FR 35624 
(June 21, 2005).

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EFFECTIVE DATE: September 8, 2005.

FOR FURTHER INFORMATION CONTACT: Patrick Edwards, John Drury or 
Abdelali Elouaradia at (202) 482-8029, (202) 482-0195, and (202) 482-
1374, respectively; AD/CVD Operations, Office 7, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On August 3, 2004, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
certain cut-to-length carbon steel plate from Romania for the period of 
August 1, 2003, through July 31, 2004. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 69 FR 46496 (August 3, 
2004). On August 31, 2004, the Department received four timely requests 
for an administrative review of this order. The Department received a 
timely request from the International Steel Group, Inc. (``ISG''), a 
domestic interested party, requesting that the Department conduct an 
administrative review of shipments exported to the United States from 
the following Romanian plate producers/exporters: (1) MS Galati, (2) 
Metalexportimport, S.A. (``MEI''), (3) Metanef, S.A. (``Metanef''), and 
(4) Combinatul de Oteluri Speciali Tirgoviste (``COST''). In addition, 
the Department received a timely request from MS Galati and Ispat North 
America Inc. (``INA''), an exporter and U.S. affiliated importer of 
subject merchandise (collectively ``respondents''), requesting that the 
Department conduct an administrative review of subject merchandise 
exported to the United States from producer MS Galati. Also, the 
Department received a timely request on behalf of IPSCO Steel Inc. 
(``IPSCO''), a domestic producer, requesting that the Department 
conduct an administrative review of subject merchandise produced by MS 
Galati and exported from Romania by MEI. Finally, the Department 
received a timely request on behalf of Nucor Corporation, a domestic 
producer, requesting that the Department conduct an administrative 
review of subject merchandise exported by the following Romanian plate 
producers/exporters: (1) MS Galati, (2) MEI, (3) CSR SA Resita 
(``CSR''), and (4) MINMET, S.A. (``MINMET'').
    On September 22, 2004, the Department initiated an administrative 
review of the antidumping duty order on certain cut-to-length carbon 
steel plate from Romania, for the period covering August 1, 2003, 
through July 31, 2004, to determine whether merchandise imported into 
the United States is being sold at less than NV. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Request 
for Revocation in Part, 69 FR 56745 (September 22, 2004) (``Notice of 
Initiation'').
    On September 24, 2004, the Department issued antidumping duty 
questionnaires to the six above-referenced Romanian companies. On 
October 4, 2004, the Department received a letter from Metanef stating 
that it made no shipments of subject merchandise to the United States 
during the POR. On October 8, 2004, MINMET submitted a letter stating 
that it has never shipped subject merchandise to the United States, 
including during the POR. On May 12, 2005, the Department received a 
letter from COST stating that it did not produce or make shipments of 
subject merchandise during the POR. On August 3, 2005, Nucor submitted 
a letter withdrawing its request for review of CSR. With regard to 
Metanef, CSR, COST, and MINMET, we intend to rescind this review based 
on the receipt of a withdrawal of request for a review and/or 
notification of no shipments made during the POR. For a full discussion 
of the intent to rescind with respect to these companies, see the 
``Notice of Intent to Rescind in Part'' section of this notice below.

[[Page 53334]]

    On October 29, 2004 and November 1, 2004, we received Section A 
responses from MS Galati and MEI, respectively.\2\ On December 1, 2004, 
MS Galati filed its Section B and C questionnaire responses and MEI 
stated in this same filing that MEI did not have any home market 
(``HM'') sales during the POR and, thus, would not be filing a Section 
B response.\3\ On February 28, 2005, the Department issued a 
supplemental questionnaire regarding MS Galati's Sections A through C 
questionnaire responses. On March 22, 2005, MS Galati submitted its 
response to the supplemental questionnaire. On June 16, 2005, the 
Department issued a second supplemental questionnaire with regard to 
Sections A through C. We received MS Galati's response to this 
supplemental questionnaire on July 1, 2005. On July 6, 2005, MS Galati 
submitted to the Department a revised U.S. sales database as it 
identified a programming error in the dataset when it was submitted as 
part of its second supplemental response.
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    \2\ See Department of Commerce Antidumping Duty Questionnaire: 
Response to Section A of Questionnaire, dated October 29, 2004.
    \3\ See Department of Commerce Antidumping Duty Questionnaire: 
Response to Sections B and C of the Questionnaire, dated December 1, 
2004.
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    On December 13, 2004, IPSCO submitted allegations of sales below 
cost of production (``COP'') against the former Ispat Sidex, now Mittal 
Steel. Upon a thorough review of IPSCO's allegation, the Department 
initiated a sales-below-cost investigation on April 4, 2005, and 
instructed MS Galati to respond to Section D of the antidumping 
questionnaire. On April 27, 2005, the Department received MS Galati's 
Section D Response. On May 6, 2005, the Department issued a 
supplemental questionnaire regarding MS Galati's section D 
questionnaire response. On June 29, 2005, we received MS Galati's 
supplemental questionnaire response. The Department requested that MS 
Galati provide revised exhibits for its supplemental response and those 
exhibits were received on July 19, 2005. See ``Cost of Production 
Analysis'' section of this notice below.
    On April 15, 2005, due to the complexity of the case and pursuant 
to section 751(c)(3)(A) of the Tariff Act of 1930, as amended (``the 
Act''), the Department postponed the preliminary results in this 
administrative review until no later than August 31, 2005. See Certain 
Cut-to-Length Carbon Steel Plate from Romania: Notice of Extension of 
Preliminary Results for 2003-2004 Antidumping Duty Administrative 
Review, 70 FR 19925 (April 15, 2005).
    On August 5, 2005, and August 8, 2005, the Department issued a 
third supplemental questionnaire regarding MS Galati's cost responses 
and a further supplemental regarding MS Galati's model match hierarchy, 
respectively. On August 17, 2005, MS Galati submitted additional 
information on the record confirming its date of sale methodology. See 
section on ``Date of Sale'' below. On August 17, 2005, the Department 
received the response for the cost supplemental questionnaire. On 
August 22, 2005, the Department sent a letter to MS Galati requesting 
specific changes to its home market and U.S. sales databases, based on 
the verification findings and minor corrections. See Letter to Mittal 
Steel Galati, S.A. from Abdelali Elouaradia, program manager, Request 
for New Databases, dated August 22, 2005. On August 24, 2005, the 
Department received MS Galati's response to the model match 
supplemental questionnaire. On August 25, 2005, the Department received 
MS Galati's revised sales files as requested by the Department.

Result of Changed Circumstances Review: Successorship

    On March 14, 2005, the Department received a request from Ispat 
Sidex S.A. to conduct a changed circumstances review, as the company 
recently changed its name to Mittal Steel Galati, S.A. following the 
acquisition of its parent, LNM Holdings, by the Mittal Steel Group in 
early 2005. Pursuant to Section 751(b) of the Act and 19 CFR 351.216 of 
the Department's regulations, the Department initiated a changed 
circumstance review to establish whether Mittal Steel Galati, S.A. is 
the successor-in-interest to Ispat Sidex, S.A. On May 3, 2005, the 
Department published in the Federal Register a Notice of Initiation and 
Preliminary Results. See Certain Cut-to-Length Carbon Steel Plate from 
Romania: Initiation and Preliminary Results of Changed Circustances 
Antidumping Duty Administrative Review, 70 FR 84 (May 3, 2005). We 
allowed a period for public comment on our preliminary results. No 
comments were received by any interested party, and therefore the 
Department issued its final results, finding that Mittal Steel Galati, 
S.A. is the successor-in-interest to Ispat Sidex, S.A. See Notice of 
Final Results of Antidumping Duty Changed Circumstances Review: Certain 
Cut-to-Length Carbon Steel Plate from Romania, 70 FR 118 (June 21, 
2005).

Notice of Intent To Rescind Review in Part

    Pursuant to 19 CFR 351.213(d)(3), the Department may rescind an 
administrative review, in whole or only with respect to a particular 
exporter or producer, if the Secretary concludes that, during the 
period covered by the review, there were no entries, exports, or sales 
of the subject merchandise. See e.g., Stainless Steel Plate in Coils 
from Taiwan: Notice of Preliminary Results and Rescission in Part of 
Antidumping Duty Administrative Review, 67 FR 5789, 5790 (February 7, 
2002) and Stainless Steel Plate in Coils from Taiwan: Final Rescission 
of Antidumping Duty Administrative Review, 66 FR 18610 (April 10, 
2001). As discussed above, Metanef, MINMET, and COST informed the 
Department that they had no shipments of subject merchandise to the 
United States during the POR. We have confirmed this with CBP. As also 
noted above, the Department received a withdrawal of the request for 
review from petitioner in regard to CSR. Therefore, in accordance with 
19 CFR 351.213(d)(1) and (d)(3) and consistent with the Department's 
practice, we are preliminarily rescinding our review with respect to 
these companies. See, e.g., Certain Steel Concrete Reinforcing Bars 
From Turkey; Final Results, Rescission of Antidumping Duty 
Administrative Review in Part, and Determination Not To Revoke in Part, 
69 FR 64731, 64732 (Nov. 8, 2004) (``2002-2003 Rebar Review'') and 
Certain Steel Concrete Reinforcing Bars From Turkey; Final Results, 
Rescission of Antidumping Duty Administrative Review in Part, and 
Determination Not To Revoke in Part, 68 FR 53127, 53128 (Sept. 9, 2003) 
(``2001-2002 Rebar Review'').
    With regard to MEI, in the course of this review, we have found 
that (a) MEI is not the producer of subject merchandise, (b) MEI does 
not take title to the merchandise which MS Galati exports through MEI, 
and (c) MS Galati has knowledge of the destination of its subject 
merchandise exports. Therefore, the Department is concluding that MEI 
had neither sales nor shipments of subject merchandise during the POR, 
and accordingly we are preliminarily rescinding the review with respect 
to MEI.

Scope of the Order

    The products covered by this order include hot-rolled carbon steel 
universal mill plates (i.e., flat-rolled products rolled on four faces 
or in a closed box pass, of a width exceeding 150 millimeters but not 
exceeding 1,250

[[Page 53335]]

millimeters and of a thickness of not less than 4 millimeters, not in 
coil and without patterns in relief), of rectangular shape, neither 
clad, plated nor coated with metal, whether or not painted, varnished, 
or coated with plastics or other nonmetallic substances; and certain 
hot-rolled carbon steel flat-rolled products in straight lengths, of 
rectangular shape, hot rolled, neither clad, plated, nor coated with 
metal, whether or not painted, varnished, or coated with plastics or 
other nonmetallic substances, 4.75 millimeters or more in thickness and 
of a width which exceeds 150 millimeters and measures at least twice 
the thickness, as currently classifiable in the HTS under item numbers 
7208.31.0000, 7208.32.0000, 7208.33.1000, 7208.33.5000, 7208.41.0000, 
7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 
7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 7211.90.0000, 
7212.40.1000, 7212.40.5000, and 7212.50.0000. Included under this order 
are flat-rolled products of nonrectangular cross-section where such 
cross-section is achieved subsequent to the rolling process (i.e., 
products which have been ``worked after rolling'')--for example, 
products which have been bevelled or rounded at the edges. Excluded 
from this review is grade X-70 plate. These HTS item numbers are 
provided for convenience and customs purposes. The written description 
remains dispositive.

Verification

    As provided in section 782(i) of the Act, and 19 C.F.R. 351.307 of 
the Department's regulations, we conducted a sales verification of the 
questionnaire responses of MS Galati and MS Galati's U.S. affiliate, 
INA. We used standard verification procedures, including on-site 
inspection of MS Galati's production facility. Our verification results 
are outlined in the following two memoranda: (1) Memorandum to the 
File, through Abdelali Elouaradia, Program Manager, Verification of 
Home Market and U.S. Sales Information Submitted by Mittal Steel Galati 
S.A. and Metalexportimport S.A., dated August 9, 2004 (``MS Galati 
Verification Report''); and (2) Memorandum to the File, through 
Abdelali Elouaradia, Program Manager, Verification of U.S. Sales 
Information Submitted by Mittal Steel Galati, S.A. (``MS Galati''), 
dated August 22, 2004 (``CEP Verification Report''). Public versions of 
these reports are on file in the Central Records Unit (CRU) located in 
room B-099 of the Main Commerce Building.

Currency Conversion

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

Universe of Sales

    In its Section C questionnaire response to the Department, MS 
Galati relied on two date of sale methodologies. For the first seven 
months of the POR, MS Galati reported the date of invoice as the date 
of sale. For the remaining five months of the POR (i.e., March through 
July 2004), MS Galati reported the order acknowledgment date as the 
date of sale. As a result, the universe of U.S. sales reported to the 
Department includes constructed export price (``CEP'') sales with entry 
dates outside of the POR. Consistent with the Department's practice and 
the antidumping duty questionnaire issued to MS Galati, dated September 
24, 2004, the Department bases its analysis on ``each U.S. sale of 
merchandise entered for consumption during the POR, except * * * for 
CEP sales made after importation * * *'' where the Department will base 
its analysis on ``each transaction that has a date of sale within the 
POR.'' See Certain Hot-Rolled Carbon Steel Flat Products from the 
Netherlands, 69 FR 33630 (June 16, 2004); see also Circular Welded Non-
Alloy Steel Pipe from the Republic of Korea, 63 FR 39071 (July 21, 
1998). Because all sales made by MS Galati to the United States are 
back-to-back CEP sales (i.e., the sales are made prior to importation 
and the merchandise was not taken into inventory upon entering the 
United States, as verified by the Department), we will only use entries 
of subject merchandise made during the POR. See Analysis Memo for 
further discussion of MS Galati's back-to-back CEP sales; see also CEP 
Verification Report, dated August 22, 2005, at pages 6 through 10.

Date of Sale

    As stated in the ``Universe of Sales'' section above, MS Galati 
reported two date of sale methodologies for its CEP sales. In 
determining the appropriate date of sale, the Department preference is 
to use the date of invoice as the date of sale. See 19 CFR 351.401(i); 
see also, Allied Tube and Conduit Corp. v. United States, 132 F. Supp. 
2d 1087 (CIT 2001) (``Allied Tube''). Moreover, the preamble to the 
Department's regulations expresses a strong preference for the 
Department to choose a single date of sale across the full period of 
review. See Antidumping Duties; Countervailing Duties: Final Rule; 62 
FR 27296, 27349 (May 19, 1997) (``the Preamble'').
    At the verifications conducted at MS Galati's headquarters in 
Romania and in Chicago at the headquarters of the U.S. affiliate, INA, 
we found that, based on sales documentation which the Department 
verified, the terms of sale changed between the order acknowledgment 
and the invoice for certain sales prior to March 2004. Furthermore, we 
found that the company will accept changes to the terms of sale after 
March 2004, although any change to the terms are memorialized in the 
form of an additional order acknowledgment. Therefore, after reviewing 
the sales process for U.S. sales for the full POR, we find that sales 
terms were susceptible to change, and in fact, quantities changed in 
excess of the allowable variations per the order acknowledgment. For 
these preliminary results, the Department will use the invoice date as 
the appropriate date of sale for the POR. Because the Department is not 
including sales which were entered into the United States after the POR 
for margin calculation purposes, and all of the reported sales using 
order acknowledgment as the date of sale entered after the POR, the 
issue of reporting different date of sale methodologies is no longer an 
issue in this case. See Analysis Memo for further discussion.

Fair Value Comparisons

    To determine whether MS Galati's sales of the subject merchandise 
from Romania to the United States were made at prices below NV, we 
compared the CEP to the NV, as described in the ``Constructed Export 
Price'' and ``Normal Value'' sections of this notice. MS Galati 
initially reported sales directly to unaffiliated customers as export 
price (``EP sales'') in the United States, but we have disregarded 
those sales in these preliminary results because they appear to be of 
non-subject merchandise outside of the scope of these proceedings. For 
further explanation, see Analysis Memo.
    Therefore, pursuant to section 777A(d)(2), we compared the 
constructed export prices of individual U.S. transactions to the 
monthly weighted-average normal value of the foreign like product where 
there were sales made in the ordinary course of trade.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products

[[Page 53336]]

covered by the ``Scope of the Order'' section above, which were 
produced and sold by MS Galati in the home market during the POR, to be 
foreign like product for the purpose of determining appropriate product 
comparisons to U.S. sales of subject merchandise. We relied on eight 
characteristics to match U.S. sales of subject merchandise to 
comparison sales of the foreign like product (listed in order of 
importance): (1) Painting; (2) quality; (3) specification and/or grade; 
(4) heat treatments; (5) standard thickness; (6) standard width; (7) 
whether or not checkered (floor plate); and (8) descaling. Where there 
were no sales of identical merchandise in the home market to compare to 
U.S. sales, we compared U.S. sales to the most similar foreign like 
product on the basis of the characteristics and reporting instructions 
listed in the Department's questionnaire. See Appendix V of the 
Department's antidumping duty questionnaire to MS Galati dated 
September 24, 2004.

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under sections 772(c) and 
(d). For purposes of this administrative review, MS Galati has 
classified its sales as both EP and CEP. However, as noted in the 
``Fair Value Comparison'' section, MS Galati initially reported sales 
directly to unaffiliated customers (i.e., EP sales) in the United 
States, but we have disregarded those sales in this preliminary 
determination as they appear to be of merchandise not covered by the 
scope of the order. MS Galati identified one channel of distribution 
for U.S. sales: MS Galati to MEI to INA and then to unaffiliated U.S. 
customers, who are distributors. See ``Level of Trade'' section below 
for further analysis.
    For this sales channel, MS Galati has reported these sales as CEP 
sales because the first sale to an unaffiliated party occurred in the 
United States. Therefore, we based CEP on the packed duty paid prices 
to unaffiliated purchasers in the United States, in accordance with 
subsections 772(b), (c), and (d) of the Act. Where applicable, we made 
a deduction to gross unit price for billing adjustments. We made 
deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These deductions included, where appropriate, 
foreign inland freight from the plant to the port of export, foreign 
brokerage and handling, international freight, marine insurance, U.S. 
brokerage and handling, other U.S. transportation expenses (i.e., U.S. 
stevedoring, wharfage, and surveying), and U.S. customs duty. 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 (i.e., imputed credit 
expenses, commissions, and bank expenses) and indirect selling 
expenses. For CEP sales, we also made an adjustment for profit in 
accordance with section 772(d)(3) of the Act. We deducted the profit 
allocated to expenses deducted under sections 772(d)(1) and 772(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 revenue realized on sales in both the U.S. and home markets, less 
all expenses associated with those sales. We then allocated profit to 
expenses incurred with respect to U.S. economic activity, based on the 
ratio of total U.S. expenses to total expenses for both the U.S. and 
home markets.

Normal Value

A. Home Market Viability

    We compared the aggregate volume of HM sales of the foreign like 
product and U.S. sales of the subject merchandise to determine whether 
the volume of the foreign like product sold in Romania was sufficient, 
pursuant to section 773(a)(1)(C) of the Act, to form a basis for NV. 
Because the volume of HM sales of the foreign like product was greater 
than five percent of the U.S. sales of subject merchandise, in 
accordance with section 773(a)(1)(B)(i) of the Act, we have based the 
determination of NV upon the HM sales of the foreign like product. 
Thus, we used as NV the prices at which the foreign like product was 
first sold for consumption in Romania, in the usual commercial 
quantities, in the ordinary course of trade, and, to the extent 
possible, at the same level of trade (``LOT'') as the CEP sales, as 
appropriate. After testing home market viability, we calculated NV as 
noted in the ``Price-to-Price Comparisons'' section of this notice.

B. Cost of Production Analysis

    Based on a cost allegation submitted by the petitioner pursuant to 
19 CFR 351.301(d)(2)(ii), we found reasonable grounds to believe or 
suspect that MS Galati 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 MS Galati. See Memorandum from John Drury and 
Patrick Edwards, Case Analysts, and Ernest Gziryan, Case Accountant, to 
Richard O. Weible, Office Director, regarding Petitioner's Allegation 
of Sales Below the Cost of Production for Ispat Sidex, S.A., April 4, 
2005, on file in the CRU. The Department has conducted an investigation 
to determine whether MS Galati made home market sales at prices below 
their COP during the POR within the meaning of section 773(b) of the 
Act. We conducted the COP analysis in the ``Calculation of Cost of 
Production'' section as described below.
    Because the Department initiated a sales-below-cost investigation, 
we instructed MS Galati to submit its responses to Section D of the 
Department's Antidumping Questionnaire. MS Galati submitted its 
response to the Section D questionnaire on April 27, 2005, and its 
response to the Department's Section D Supplemental questionnaire of 
May 6, 2005, on June 29, 2005.
1. Calculation of Cost of Production
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for the home 
market general and administrative (``G&A'') expenses, interest 
expenses, and packing expenses. We relied on the COP data submitted by 
MS Galati in their cost questionnaire responses with the following 
exceptions:

--We adjusted the transfer prices for certain inputs purchased from 
affiliated suppliers pursuant to section 773(f)(2) of the Act.
--We adjusted the reported depreciation expense to reflect the 2003 
revaluation of the company's assets.
2. Test of Home Market Sales Prices
    We compared the weighted-average COP for MS Galati to its 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 the COP within an extended period of time (i.e., a 
period of one year) in substantial quantities and whether such prices 
were sufficient to permit the recovery of all costs within a reasonable 
period of time.
    On a model-specific basis, we compared the revised COP to the home

[[Page 53337]]

market prices, less any applicable movement charges and direct and 
indirect selling expenses.
3. Results of the COP Test
    We disregarded below-cost sales where (1) 20 percent or more of MS 
Galati's sales of a given product during the POR were made at prices 
below the COP, and thus such sales 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 comparisons of price 
to weighted-average COPs for the POR, we determined that the below-cost 
sales of the product were at prices which would not permit recovery of 
all costs within a reasonable time period, in accordance with section 
773(b)(2)(D) of the Act. We found that MS Galati made sales below cost 
and we disregarded such sales where appropriate.

C. Arm's-Length Test

    MS Galati reported that it made sales in the HM to affiliated and 
unaffiliated customers. The Department did not require MS Galati to 
report its affiliated party's downstream sales because these sales 
represented less than five percent of total HM sales. Sales to 
affiliated customers in the HM not made at arm's length were excluded 
from our analysis. To test whether these sales were made at arm's 
length, we compared the starting prices of sales to affiliated and 
unaffiliated customers net of all billing adjustments, movement 
charges, direct selling expenses, discounts and packing. Where the 
price to that affiliated party was, on average, within a range of 98 to 
102 percent of the price of the same or comparable merchandise sold to 
the unaffiliated parties at the same level of trade, we determined that 
the sales made to the affiliated party were at arm's length. See 
Antidumping Proceedings--Affiliated Party Sales in the Ordinary Course 
of Trade, 67 FR 69186 (November 15, 2002).

D. Price-to-Price Comparisons

    We based NV on the HM sales to unaffiliated purchasers and sales to 
affiliated customers that passed the arm's length test. We made 
adjustments, where appropriate, for physical differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. We 
made adjustments, where applicable, for movement expenses (i.e., inland 
freight from plant to distribution warehouse and warehousing expenses) 
in accordance with section 773(a)(6)(B) of the Act. We made 
circumstance-of-sale adjustments for imputed credit, where appropriate 
in accordance with section 773(a)(6)(C). In accordance with section 
773(a)(6), we deducted HM packing costs and added U.S. packing costs. 
Finally, in accordance with section 773(a)(4) of the Act, where the 
Department was unable to determine NV on the basis of contemporaneous 
matches in accordance with 773(a)(1)(B)(i), we based NV on CV.

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 or CEP transaction. See 
also 19 CFR 351.412 of the Department's regulations. The NV LOT is the 
level of the starting-price sales in the comparison market or, when NV 
is based on CV, the level of the sales from which we derive selling, 
general and administrative (``SG&A'') expenses and profits. For EP 
sales, the U.S. LOT is also the level of the starting-price sale, which 
is usually from the exporter to the importer. For CEP sales, the U.S. 
LOT is the level of the constructed sale from the exporter to the 
affiliated importer. See Sec.  351.412(c)(1) of the Department's 
regulations. As noted in the ``Constructed Export Price'' section 
above, we preliminarily find that all of MS Galati's sales through its 
U.S. affiliates are appropriately classified as CEP sales.
    To determine whether NV sales are at a different LOT than EP or CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison market sales are at a 
different LOT than EP or CEP sales, and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between 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. For CEP sales, if the NV level 
is more remote from the factory than the CEP level and there is no 
basis for determining whether the difference in levels between NV and 
CEP affects price comparability, we adjust NV under section 
773(a)(7)(B) of the Act (``the CEP offset provision''). See Final 
Determination of Sales at Less Than Fair Value: Greenhouse Tomatoes 
from Canada, 67 FR 8781 (February 26, 2002); see also Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731, 61732 (November 19, 
1997).
    In analyzing the differences in selling functions, we determine 
whether the LOTs identified by the respondent are meaningful. See 
Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 
27371 (May 19, 1997). If the claimed LOTs are the same, we expect that 
the functions and activities of the seller should be similar. 
Conversely, if a party claims that LOTs are different for different 
groups of sales, the functions and activities of the seller should be 
dissimilar. See Porcelain-on-Steel Cookware from Mexico: Final Results 
of Administrative Review, 65 FR 30068 (May 10, 2000).
    To determine whether the comparison market sales were at different 
stages in the marketing process than the U.S. sales, we reviewed the 
channels of distribution in each market,\4\ including selling 
functions, class of customer (``customer category''), and the level of 
selling expenses for each type of sale.
    In this review, we obtained information from MS Galati regarding 
the marketing stages involved in sales to the reported home and U.S. 
markets. MS Galati reported that it sells to unaffiliated distributors 
and end users in the home market (i.e., Romania), as well as to 
affiliated end users for consumption and affiliated distributors. In 
the United States, MS Galati had sales to an affiliate, INA, that 
resold the merchandise to unaffiliated customers. MS Galati initially 
reported sales directly to unaffiliated customers in the United States, 
but we have disregarded those sales in these preliminary results as 
they appear to be of merchandise not covered by the scope of the order.
    MS Galati reported one LOT in the home market with two channels of 
distribution: (1) Direct sales to customers, and (2) consignment sales. 
Sales were made to two classes of customers: (1) End users, and (2) 
distributors. See MS Galati's Section A Questionnaire Response dated 
October 29, 2004, (``AQR'') at page 13 and Appendix 5. See also MS 
Galati's second supplemental response of July 1, 2005, at Appendix 4 
(``Second Supplemental Response'') and its Section B Questionnaire 
Response (``BQR'') dated December 1, 2004, at page 16. For some sales 
made in the home market, MS Galati stored merchandise at an affiliated 
warehouse. MS Galati also had sales to affiliated end users for 
consumption. See AQR at page 3 and BQR at page 3. Based on our

[[Page 53338]]

review of evidence on the record, we find that home market sales 
through both channels of distribution to both customer categories, 
whether affiliated or not, were substantially similar with respect to 
selling functions and stages of marketing. MS Galati performed the same 
selling functions at the same level for sales to all home market 
customers. Accordingly, we preliminarily find that MS Galati had only 
one LOT for its home market sales.
    MS Galati reported one EP LOT and one CEP LOT with two channels of 
distribution in the United States: (1) Direct sales to end users and 
distributors, and (2) direct sales by the U.S. affiliate to end users 
and distributors with merchandise shipped directly from Romania. See 
AQR at A-13. As previously noted in the ``Fair Value Comparison'' 
section, we are disregarding sales reported as EP sales as we have 
preliminarily determined such sales to be of merchandise not covered by 
the scope of the order. Therefore, we preliminarily determine that MS 
Galati made CEP sales to the United States through one channel of 
distribution--direct sales to end users and distributors.
    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 reviewed the selling 
functions and services performed by MS Galati on CEP sales, as 
described by MS Galati in its Second Supplemental Response, after these 
deductions. We have determined that the selling functions performed by 
MS Galati on all CEP sales were identical. Accordingly, because the 
selling functions provided by MS Galati on all sales to its affiliate 
in the United States are identical, we preliminarily determine that 
there is one CEP LOT in the U.S. market.
    We then compared the selling functions performed by MS Galati on 
its CEP sales (after deductions) to the selling functions provided in 
the home market. We found that MS Galati performs additional selling 
functions for its home market sales to those it provides to its 
affiliate INA. See Second Supplemental Response dated July 1, 2005, at 
Appendix 3. According to section 773(a)(7)(B) of the Act, a CEP offset 
is appropriate when the LOT in the home market or third country market 
is at a more advanced stage than the LOT of the CEP sales. MS Galati 
reported that it provided minimal selling functions and services for 
the CEP LOT and that, therefore, the home market LOT is more advanced 
than the CEP LOT. Based on our analysis of the channels of distribution 
and selling functions performed by MS Galati for sales in the home 
market and CEP sales in the U.S. market (i.e., sales support and 
activities provided by MS Galati on sales to its U.S. affiliate), we 
preliminarily find that the home market LOT is at a more advanced stage 
of distribution when compared to CEP sales because MS Galati provides 
many selling functions in the home market at a higher level of service 
as compared to selling functions performed for its CEP sales. See 
Second Supplemental Response dated July 1, 2005, at Appendix 3. Thus, 
we find that MS Galati's home market sales are at a more advanced LOT 
than its CEP sales. There was only one LOT in the home market, there 
was no data available to determine the existence of a pattern of price 
differences, and we do not have any other information that provides an 
appropriate basis for determining a LOT adjustment. Therefore, we 
applied a CEP offset to NV for CEP comparisons.
    To calculate the CEP offset, we deducted the home market indirect 
selling expenses from NV for home market sales that were compared to 
U.S. CEP sales. As such, 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.

Preliminary Results of Review

    We note that although MEI was the exporter for all of MS Galati's 
sales, because MS Galati provided information that it had knowledge 
that the subject merchandise was destined for the United States, we 
have calculated a margin solely for MS Galati as the producer of 
subject merchandise. We preliminarily determine that the following 
margin is the weighted-average dumping margin of the POR:

----------------------------------------------------------------------------------------------------------------
            Manufacturer/exporter                       POR                              Margin
----------------------------------------------------------------------------------------------------------------
Mittal Steel Galati, S.A....................        08/01/03-07/31/04  48.90 percent.
----------------------------------------------------------------------------------------------------------------

    For details on the calculation of the antidumping duty weighted-
average margin for MS Galati and MEI, see the Analysis Memorandum for 
the Preliminary Results of the Administrative Review of the Antidumping 
Duty Order on Certain Cut-to-Length Carbon Steel Plate from Romania, 
dated August 31, 2004 (``Analysis Memo''). A public version of this 
memorandum is on file in the CRU.

Assessment
---------------------------------------------------------------------------

    \4\ The marketing process in the United States and third country 
market begins with the producer and extends to the sale to the final 
user or customer. The chain of distribution between the two may have 
many or few links, and the respondents' sales occur somewhere along 
this chain. In performing this evaluation, we considered each 
respondent's narrative response to properly determine where in the 
chain of distribution the sale occurs.
---------------------------------------------------------------------------

    Pursuant to section 351.212(b), the Department calculates an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this review, if any importer-specific 
assessment rates calculated in the final results are above de minimis 
(i.e., at or above 0.50 percent), the Department will issue 
appraisement instructions directly to CBP to assess antidumping duties 
on appropriate entries by applying the assessment rate to the entered 
value of the merchandise. For assessment purposes, we calculated 
importer-specific assessment rates for the subject merchandise by 
aggregating the dumping duties due for all U.S. sales to each importer 
and dividing the amount by the total value of the sales to that 
importer. If these preliminary results are adopted in our final results 
of review, we will direct CBP to assess the resulting rate against the 
total quantity for the subject merchandise on each of MS Galati's 
importer's entries during the POR. Antidumping duties for MEI, where 
the merchandise was not produced by MS Galati, and for any other 
rescinded companies, shall be assessed at rates equal to the cash 
deposit of estimated antidumping duties required at the time of entry, 
or withdrawal from warehouse, for consumption, in accordance with 19 
CFR 351.212(c)(1)(i).

Cash-Deposit Requirements

    The following cash-deposit rates will be effective upon publication 
of the final results of this review for all shipments of certain cut-
to-length carbon steel plate from Romania entered, or withdrawn from 
warehouse, for consumption on or after publication date, as provided 
for by section 751(a)(2)(C) of the Act: (1) For subject merchandise 
produced by MS Galati, the cash-deposit rate will be the rate 
established in the final results of this review, except if the rate is 
less than 0.50 percent and, therefore, de minimis within the meaning of 
19 CFR 351.106(c)(1), in which case the cash deposit rate will be zero; 
(2) for previously reviewed or investigated

[[Page 53339]]

companies not covered in this review, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the original less than fair value (LTFV) 
investigation,\5\ but the manufacturer is, the cash deposit rate will 
be the rate established in the most recent period for the manufacturer 
of the merchandise; and, (4) if neither the exporter nor the 
manufacturer is a firm covered in this or any previous review conducted 
by the Department, the cash deposit rate will be the ``all others'' 
rate described in the final results of this review. We note that all 
subject merchandise produced by MS Galati will be subject to MS 
Galati's cash deposit rate as established in the final results, whether 
or not that merchandise was exported by MEI.
---------------------------------------------------------------------------

    \5\ See Final Determination of Sales at Less Than Fair Value: 
Certain Cut-to-Length Carbon Steel Plate from Romania, 58 FR 37209 
(July 9, 1993).
---------------------------------------------------------------------------

    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review. We note that the cash deposit rate established in the final 
results of this review will be applied prospectively to cover future 
entries.

Schedule for Final Results of Review

    The Department will disclose calculations performed in connection 
with the preliminary results of this review within five days of the 
date of publication of this notice in accordance with Sec.  351.224(b) 
of the Department's regulations. Case briefs for this review must be 
submitted to the Department no later than fourteen days after the date 
of the final cost verification report issued in this proceeding. 
Rebuttal briefs must be filed seven days from the deadline date for 
case briefs. Parties submitting arguments in this proceeding are 
requested to submit with the argument: (1) A statement of the issue, 
(2) a brief summary of the argument, and (3) a table of authorities. 
Case and rebuttal briefs and comments must be served on interested 
parties in accordance with Sec.  351.303(f) of the Department's 
regulations.
    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with section 351.310(c) of the 
Department's regulations. Unless otherwise specified, the hearing, if 
requested, will be held two days after the date for submission of 
rebuttal briefs, or the first business day thereafter. Individuals who 
wish to request a hearing must submit a written request within 30 days 
of the publication of this notice in the Federal Register to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230. Requests for a public hearing should contain: (1) 
The party's name, address, and telephone number; (2) the number of 
participants; and (3) to the extent practicable, an identification of 
the arguments to be raised at the hearing. If a hearing is held, an 
interested party may make an affirmative presentation only on arguments 
included in that party's case brief and may make a rebuttal 
presentation only on arguments included in that party's rebuttal brief. 
Parties should confirm by telephone the time, date, and place of the 
hearing within 48 hours before the scheduled time. The Department will 
issue the final results of this review, which will include the results 
of its analysis of issues raised in the briefs, not later than 120 days 
after the date of publication of this notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under Sec.  351.402(f) of the Department's 
regulations to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
these review periods. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
duties occurred and the subsequent assessment of double antidumping 
duties.
    This administrative review and this notice are published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: August 31, 2005.
Barbara E. Tillman,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4889 Filed 9-7-05; 8:45 am]
BILLING CODE 3510-DS-P