[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Notices]
[Pages 58687-58690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-5569]



[[Page 58687]]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-449-804]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Steel Concrete Reinforcing Bars from Latvia

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

FOR FURTHER INFORMATION CONTACT: Shane Subler or Constance Handley at 
(202) 482-0189 or (202) 482-0631, respectively; AD/CVD Operations, 
Office 1, Import Administration, International Trade Administration, 
U.S. Department of Commerce,14th Street & Constitution Avenue, NW., 
Washington, DC 20230.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on steel concrete 
reinforcing bars (rebar) from Latvia. We preliminarily determine that 
sales of subject merchandise by Joint Stock Company Liepajas Metalurgs 
(LM) 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 based on the difference between the export price (EP) and the 
NV. Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: October 7, 2005.

Background

    On September 7, 2001, the Department issued an antidumping duty 
order on rebar from Latvia. See Antidumping Duty Orders: Steel Concrete 
Reinforcing Bars From Belarus, Indonesia, Latvia, Moldova, People's 
Republic of China, Poland, Republic of Korea and Ukraine, 66 FR 46777 
(September 7, 2001). On September 1, 2004, the Department issued a 
notice of opportunity to request the third administrative review of 
this order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
69 FR 53407 (September 1, 2004). On September 27, 2004, in accordance 
with 19 CFR 351.213(b), LM requested an administrative review. On 
September 30, 2004, also in accordance with 19 CFR 351.213(b), the 
petitioners\1\ requested an administrative review of LM. On October 22, 
2004, the Department published the notice of initiation of this 
antidumping duty administrative review, covering the period September 
1, 2003, through August 31, 2004 (the POR). See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 69 FR 62022 
(October 22, 2004).
---------------------------------------------------------------------------

    \1\ The petitioners in this case are the Rebar Trade Action 
Coalition (RTAC) and its individual members -- Gerdau AmeriSteel, 
CMC Steel Group, Nucor Corporation, and TAMCO.
---------------------------------------------------------------------------

    On November 5, 2004, the Department issued its antidumping 
questionnaire to LM, specifying that the responses to Section A and 
Sections B-D would be due on November 26, 2004, and December 13, 2004, 
respectively.\2\ The Department received timely responses to Sections 
A-D of the initial antidumping questionnaire and associated 
supplemental questionnaires.
---------------------------------------------------------------------------

    \2\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the manner in which 
it sells that merchandise in all of its markets. Section B requests 
a complete listing of all home market sales, or, if the home market 
is not viable, of sales in the most appropriate third-country market 
(this section is not applicable to respondents in non-market economy 
cases). Section C requests a complete listing of U.S. sales. 
(continued...)(...continued) Section D requests information on the 
cost of production of the foreign like product and the constructed 
value of the merchandise under review. Section E requests 
information on further manufacturing.
---------------------------------------------------------------------------

    On April 26, 2005, the Department published a notice of a sixty-day 
extension of the preliminary results of this administrative review. See 
Steel Concrete Reinforcing Bars from Latvia: Extension of the Time 
Limit for the Preliminary Results of Antidumping Duty Administrative 
Review, 70 FR 21397. On July 18, 2005, the Department published a 
notice extending the deadline for the preliminary results for an 
additional 60 days. See Steel Concrete Reinforcing Bars from Latvia: 
Extension of the Time Limit for the Preliminary Results of Antidumping 
Duty Administrative Review, 70 FR 41208. This second notice extended 
the deadline for the preliminary results to September 30, 2005.
    From August 23 through September 2, 2005, the Department verified 
LM's sales and cost questionnaire responses at LM's offices in Liepaja, 
Latvia. The Department will release its verification report under 
separate cover.

Scope of the Order

    The product covered by this order is all steel concrete reinforcing 
bars sold in straight lengths, currently classifiable in the Harmonized 
Tariff Schedule of the United States (HTSUS) under item numbers 
7214.20.00, 7228.30.8050, 7222.11.0050, 7222.30.0000, 7228.60.6000, 
7228.20.1000, or any other tariff item number. Specifically excluded 
are plain rounds (i.e., non-deformed or smooth bars) and rebar that has 
been further processed through bending or coating.
    HTSUS subheadings are provided for convenience and customs 
purposes. The written description of the scope of the order is 
dispositive.

Fair Value Comparisons

    We compared the EP to the NV, as described in the Export Price and 
Normal Value sections of this notice. We first attempted to compare 
contemporaneous sales of products sold in the United States and 
comparison market that are identical with respect to the matching 
characteristics. Pursuant to section 771(16) of the Act, all products 
produced by the respondent that fit the definition of the scope of the 
order and were sold in the comparison market during the POR fall within 
the definition of the foreign like product. We have relied on three 
criteria to match U.S. sales of subject merchandise to comparison 
market sales of the foreign like product: type of steel, yield 
strength, and size. Where there were no sales of identical merchandise 
in the comparison market, we compared U.S. sales to sales of the next 
most similar foreign like product on the basis of the characteristics 
listed above.

Date of Sale

    LM used the commercial invoice date as the date of sale in its 
response. In order to determine whether the invoice date is the 
appropriate date of sale, we requested that LM submit extensive sales 
documentation for all U.S. sales during the POR. LM provided us with 
this information in two submissions dated June 7, 2005, and July 6, 
2005. The company's submitted sales documentation included contract 
addenda and commercial invoices for all U.S. sales.
    After reviewing LM's submitted sales documentation, we have 
preliminarily determined that the date of the contract addendum is the 
date of sale because this date best reflects the determination of the 
material terms of sale. The use of contract date as the date of sale is 
consistent with the Department's use of contract date in Hot-Rolled 
Steel from Thailand,\3\ in which the Department

[[Page 58688]]

determined that the material terms of sale for the respondent's U.S. 
sales did not change between its final contract and final invoice. 
Because information in LM's contract addenda and invoices is business 
proprietary, we have explained the date of sale methodology in the 
analysis memorandum for this determination. See the Memorandum from 
Shane Subler, International Trade Compliance Analyst, to Constance 
Handley, Program Manager, Re: Analysis Memorandum for Joint Stock 
Company Liepajas Metalurgs, dated September 30, 2005 (Analysis 
Memorandum), for further explanation of the selected date of sale. For 
all home market sales, we have preliminarily used the invoice date as 
the date of sale based on information on the record.
---------------------------------------------------------------------------

    \3\ See Memorandum from Joseph A. Spetrini, Deputy Assistant 
Secretary for Import Administration, to James J. Jochum, Assistant 
Secretary for Import Administration, Subject: Issues and Decision 
Memorandum for the Final Results of the Antidumping Duty 
Administrative Review of Certain Hot-Rolled Carbon Steel Flat 
Products from Thailand, dated April 13, 2004 (Hot-Rolled Steel from 
Thailand).
---------------------------------------------------------------------------

Export Price

    We calculated an EP for all of LM's sales because the merchandise 
was sold directly by LM to the first unaffiliated purchaser for 
delivery to the United States, and because constructed export price 
(CEP) was not otherwise warranted based on the facts of record. We made 
deductions from the starting price for movement expenses in accordance 
with section 772(c)(2)(A) of the Act. These included inland freight, 
domestic brokerage and handling expenses, and dunnage expenses.

Normal Value

A. Selection of Comparison Markets

    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or value, if 
quantity is inappropriate); that the time of the sales reasonably 
corresponds to the time of the sale used to determine EP; and that 
there is no particular market situation that prevents a proper 
comparison with the EP. The statute contemplates that quantities (or 
value) will normally be considered insufficient if they are less than 
five percent of the aggregate quantity (or value) of sales of the 
subject merchandise to the United States.
    We found that LM had a viable home market for rebar. As such, LM 
submitted home market sales data for purposes of the calculation of NV.
    In deriving NV, we made adjustments as detailed in the Calculation 
of Normal Value Based on Home Market Prices section below.

B. Cost of Production Analysis

    Because we disregarded below-cost sales in the final results of the 
second administrative review, we have reasonable grounds to believe or 
suspect that home market sales of the foreign like product by LM have 
been made at prices below the cost of production (COP) during the third 
POR. As a result, the Department initiated a COP inquiry for LM for the 
third POR.

1. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP, by model, based on the sum of materials, 
fabrication, and general and administrative (G&A) expenses. In 
accordance with the Department's standard practice, we relied on LM's 
submitted average COP calculations for the entire POR. Based on our 
findings at verification, we adjusted LM's submitted calculations for 
general and administrative (G&A) expenses, interest expenses, and 
indirect selling expenses. See the Analysis Memorandum.

2. Test of Comparison Market Sales Prices

    We compared the weighted-average COPs for LM 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 COP to the home 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 
LM's sales of a given product during the POR were made at prices below 
the COP, because 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 LM made sales below cost, and we 
disregarded such sales where appropriate.

C. Calculation of Normal Value Based on Comparison-Market Prices

    We determined NV for LM as follows. We made adjustments for any 
differences in packing and deducted home market movement expenses 
pursuant to sections 773(a)(6)(A) and 773(a)(6)(B)(ii) of the Act. In 
addition, we made adjustments for differences in circumstances of sale 
(COS) pursuant to section 773(a)(6)(C)(iii) of the Act. We made COS 
adjustments for LM's EP transactions by deducting direct selling 
expenses incurred for home market sales (credit expenses) and adding 
U.S. imputed credit expenses. In LM's case, the calculation of imputed 
credit expenses results in a negative number because all of LM's U.S. 
sales are prepaid. Therefore, the adjustment for U.S. imputed credit 
reduces NV. In addition, based on findings at verification, we adjusted 
the reported dates of payment and imputed credit fields for specific 
sales. See the Analysis Memorandum for details on adjustments to these 
specific sales.

Imputed Credit

    At verification, we found that LM did not have any short-term loans 
in lats during the POR. Furthermore, we found that LM did not correctly 
calculate the U.S. dollar interest rate used in its imputed credit 
expense calculation for U.S. sales. Therefore, LM did not have verified 
interest rates for either its U.S. or home market sales. As a result, 
we have preliminarily recalculated LM's home market and U.S. imputed 
credit expenses by using published short-term interest rates in both 
lats and dollars.
    To calculate a surrogate interest rate for home market and U.S. 
imputed credit expenses, we have followed the guidelines of Policy 
Bulletin 98.2 (Policy Bulletin)\4\ to select a surrogate interest rate. 
The Policy Bulletin states that the Department must select surrogate 
interest rates that are reasonable, readily obtainable, and 
representative of usual commercial behavior. See Policy Bulletin at 5. 
With respect to the calculation of a surrogate U.S. dollar interest 
rate, the Policy Bulletin states,
---------------------------------------------------------------------------

    \4\ See Import Administration Policy Bulletin from Carlo 
Lavanga, Office of Policy, to Robert S. LaRussa, Assistant Secretary 
for Import Administration, Topic: Imputed credit expenses and 
interest rates, dated February 23, 1998 (Policy Bulletin).
---------------------------------------------------------------------------

    For dollar transactions, we will generally use the average short-
term lending rates calculated by the Federal Reserve to impute credit 
expenses. Specifically, we will use the Federal Reserve's weighted-
average data for commercial and

[[Page 58689]]

industrial loans maturing between one month and one year from the time 
the loan is made.\5\
---------------------------------------------------------------------------

    \5\ See Policy Bulletin at 6.
---------------------------------------------------------------------------

    Therefore, we have used a POR-average of the interest rates on 
nonfinancial commercial paper with a thirty-day maturity. These rates 
are published on the website of the Board of Governors of the Federal 
Reserve System (www.federalreserve.gov/releases/h15/data.htm).
    The Commodity Futures Trading Commission (CFTC), a government 
agency that regulates commodity and financial futures, defines 
commercial paper as ``Short-term promissory notes issued in bearer form 
by large corporations, with maturities ranging from 5 to 270 days.''\6\ 
Therefore, the use of thirty-day nonfinancial commercial paper rates 
published by the Federal Reserve complies with the Policy Bulletin's 
requirement to use short-term lending rates on commercial and 
industrial loans with a maturity of between one month and one year. We 
have selected the thirty-day rate because it is reflective of the 
circumstances of sales in this proceeding. For further discussion on 
proprietary information related to the selection of the thirty-day 
nonfinancial commercial paper rate, see the Analysis Memorandum.
---------------------------------------------------------------------------

    \6\ See http://www.cftc.gov/opa/glossary/opaglossary_co.htm.
---------------------------------------------------------------------------

    For the calculation of home market imputed credit expenses, we have 
followed the Policy Bulletin's guidelines for calculating an interest 
rate when the respondent received no loans in the currency of home 
market transactions. The Policy Bulletin at page 6 states, ``For 
foreign currency transactions, we will establish interest rates on a 
case-by-case basis using publicly available information, with a 
preference for published average short-term lending rates.'' Therefore, 
in the home market, we have preliminarily used a POR-average of the 
one-month Riga Interbank Offer Rate (RIGIBOR), which is published on 
the Web site of the Bank of Latvia, Latvia's central bank, at http://www.bank.lv/eng/main/finfo/nt/rgbidrgbor/. The Bank of Latvia defines 
RIGIBOR as a money market index based on the quotes of the seven 
largest Latvian banks participating in the Latvian money market. This 
meets the Policy Bulletin's criteria of using surrogate interest rates 
that are easily obtainable, reasonable, and reflective of commercial 
behavior. We note that in Silicon Metal from Brazil,\7\ the Department 
also used a short-term money market rate as a surrogate for home market 
interest rates because ``this suggests that it is derived from a 
comprehensive market for short-term debt instruments.'' The underlying 
U.S. and Latvian interest rates used in the calculation are located at 
Attachments 1 and 2 of the Analysis Memorandum.
---------------------------------------------------------------------------

    \7\ See Memorandum from Bernard Carreau, Deputy Assistant 
Secretary for Import Administration, to Faryar Shizad, Assistant 
Secretary for Import Administration, Subject: Issues and Decision 
Memorandum for the Administrative Review of Silicon Metal from 
Brazil - 7/1/1999 through 6/30/2000; Final Results (February 12, 
2002) (Silicon Metal from Brazil).
---------------------------------------------------------------------------

D. Level of Trade Adjustment

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade as the EP transaction. The NV level of trade is 
that of the starting-price sales in the comparison market. For EP 
sales, the U.S. level of trade is also the level of the starting-price 
sale, which is usually from exporter to importer.
    To determine whether NV sales are at a different level of trade 
than EP transactions, 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 level of trade and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act.
    In conducting our level-of-trade analysis, we examine the types of 
customers, the channels of distribution, and the selling practices of 
the respondent. Generally, if the reported levels of trade are the 
same, the functions and activities of the seller should be similar. 
Conversely, if a party reports levels of trade that are different for 
different categories of sales, the functions and activities should be 
dissimilar. We found the following.
    For both the home market and U.S. market, LM reported one channel 
of distribution: direct sales. The company reported three customer 
categories in the home market: (1) traders; (2) end users; and (3) 
service centers. For all three customer categories, LM performed the 
following selling activities: negotiations with customers, order 
processing, packing, and delivery services. Accordingly, we 
preliminarily determine that LM's home market sales through these three 
channels of distribution constitute a single LOT.
    LM reported one customer category in the U.S. market: traders. In 
comparing the company's U.S. sales to its home market sales, we found 
that the selling functions performed by LM were very similar in the 
U.S. and Latvian markets. For U.S. sales, LM conducts negotiations with 
the traders, processes orders, and arranges delivery to the port. 
Therefore, we preliminarily determine that U.S. sales and home market 
sales were made at the same level of trade.

Currency Conversion

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

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average margin exists for the period September 1, 
2003, through August 31, 2004:

------------------------------------------------------------------------
                                                       Weighted-Average
                      Producer                              Margin
                                                         (Percentage)
------------------------------------------------------------------------
Joint Stock Company Liepajas Metalurgs..............                8.84
------------------------------------------------------------------------

    The Department will disclose calculations performed in accordance 
with 19 CFR 351.224(b). An interested party may request a hearing 
within 30 days of publication of these preliminary results. See 19 CFR 
351.310(c). Any hearing, if requested, will be held 44 days after the 
date of publication, or the first working day thereafter. Interested 
parties may submit case briefs and/or written comments no later than 30 
days after the date of publication of these preliminary results. 
Rebuttal briefs and rebuttals to written comments, limited to issues 
raised in such briefs or comments, may be filed no later than 37 days 
after the date of publication. Parties who submit arguments are 
requested to submit with the argument (1) a statement of the issue,
    (2) a brief summary of the argument, and (3) a table of 
authorities. Further, the parties submitting written comments should 
provide the Department with an additional copy of the public version of 
any such comments on diskette.
    The Department will issue the final results of this administrative 
review, which will include the results of its analysis of issues raised 
in any such comments, within 120 days of publication of these 
preliminary results.

[[Page 58690]]

Assessment

    Upon completion of this administrative review, pursuant to 19 CFR 
351.212(b), the Department will calculate an assessment rate on all 
appropriate entries. We will calculate importer-specific duty 
assessment rates on the basis of the ratio of the total amount of 
antidumping duties calculated for the examined sales to the total 
quantity of the sales for that importer. Where the assessment rate is 
above de minimis, we will instruct CBP to assess duties on all entries 
of subject merchandise by that importer. In addition, based on 
proprietary information in a June 17, 2005, memorandum placed on the 
record of the proceeding by the Department, we have adjusted the 
calculation of the importer-specific duty assessment rate. For an 
explanation of the adjustment to the calculated assessment rate, see 
the Analysis Memorandum.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
rebar from Latvia entered, or withdrawn from warehouse, for consumption 
on or after the publication date, as provided by section 751(a)(1) of 
the Act: (1) the cash deposit rate listed above for LM will be the rate 
established in the final results of this review, except if a rate is 
less than 0.5 percent, and therefore de minimis, the cash deposit will 
be zero; (2) for previously reviewed or investigated companies not 
listed above, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) if the exporter 
is not a firm covered in this review, a prior review, or the less-than-
fair-value (LTFV) investigation, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent period 
for the manufacturer of the 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 17.21 
percent, the ``All Others'' rate established in the LTFV investigation. 
These cash deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entities during this review period. Failure to comply with 
this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: September 30, 2005.
Barbara E. Tillman,
Acting Assistant Secretaryfor Import Administration.
[FR Doc. E5-5569 Filed 10-6-05; 8:45 am]
BILLING CODE: 3510-DS-S