[Federal Register Volume 71, Number 152 (Tuesday, August 8, 2006)]
[Notices]
[Pages 45031-45034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12865]


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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, 14\th\ 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: August 8, 2006.

SUPPLEMENTARY INFORMATION:

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, 2005, the Department issued a 
notice of opportunity to request the fourth administrative review of 
this order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
70 FR 52072 (September 1, 2005). On September 27, 2005, in accordance 
with 19 CFR 351.213(b), LM requested an administrative review. On 
September 30, 2005, also in accordance with 19 CFR 351.213(b), the 
Rebar Trade Action Coalition (RTAC),\1\ the petitioner in this 
proceeding, requested an administrative review of LM. On October 25, 
2005, the Department published the notice of initiation of this 
antidumping duty administrative review, covering the period September 
1, 2004, through August 31, 2005 (the period of review, or POR). See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, 70 FR 61601 (October 25, 2005).
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    \1\ RTAC comprises Nucor Corporation, Gerdau Ameristeel 
Corporation, and Commercial Metals Company.
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    On November 22, 2005, the Department issued its antidumping 
questionnaire to LM, specifying that the responses to Section A and 
Sections B-D would be due on December 13, 2005, and, December 29, 2005, 
respectively.\2\ The Department received timely responses to Sections 
A-D of the initial antidumping questionnaire and associated 
supplemental questionnaires.
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    \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. 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.

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[[Page 45032]]

    On May 4, 2006, the Department published a notice of a sixty-day 
extension of the time limit for 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, 71 FR 26335 (May 4, 2006). This notice 
extended the deadline for the preliminary results to August 1, 2006.

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 Tariff Act of 1930, 
as amended (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.

U.S. Market Date of Sale

    LM reported the commercial invoice date as the date of sale in the 
U.S. market. In order to determine whether the invoice date is the 
appropriate date of sale, we requested that LM submit complete sales 
documentation (i.e., purchase contracts, contract addenda, pro-forma 
invoices, appendices to the purchase contracts, amendments to the 
contract addenda, commercial invoices, and mate's receipts) for all 
U.S. sales during the POR. LM provided this information in its April 
17, 2006, supplemental questionnaire response.
    We have preliminarily used the date of the final purchase contract 
amendment that modified the material terms of sale (i.e., price, 
quantity within a specified tolerance, and actual products sold) as the 
U.S. market date of sale because these amendments best reflect the firm 
establishment of the material terms of sale. The facts of the current 
segment of the proceeding are consistent with the facts of the third 
administrative review, in which we also found the date of final 
amendment to each individual purchase contract to be the date of 
sale.\3\ Because information in LM's sales documentation is business 
proprietary, we have explained the date of sale methodology in detail 
in the calculation analysis memorandum. See Memorandum from Shane 
Subler, International Trade Compliance Analyst, to Constance Handley, 
Program Manager, Re: Analysis Memorandum for Joint Stock Company 
Liepajas Metalurgs, dated August 1, 2006 (Analysis Memorandum), for 
further explanation of the selected U.S. market 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.
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    \3\ We note that the terminology used for LM's sales 
documentation varies by customer. As shown in Exhibit 11 of LM's 
April 17, 2006, supplemental response, a purchase contract is 
equivalent to a contract addendum, and an appendix is equivalent to 
an amendment to the addendum. See the Analysis Memorandum for a 
discussion on how the material terms of sale are established by each 
of these documents.
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Sales Transshipped to Third Countries Through the United States

    Upon reviewing Exhibit 11 of LM's April 17, 2006, supplemental 
response, we found documentation of mate's receipts indicating that 
certain rebar reported in LM's U.S. sales database was transshipped 
through the United States to the British Virgin Islands and the French 
West Indies. We confirmed that a portion of the rebar covered by these 
mate's receipts did not enter U.S. customs territory. Therefore, for 
sales observations that included the transshipped rebar, we removed the 
quantity of transshipped rebar from the total quantity in the sales 
observation. See the Analysis Memorandum for additional details.

Export Price

    We calculated an EP for all of LM's U.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. Movement expenses included inland 
freight, domestic brokerage and handling expenses, and dunnage 
expenses.

Normal Value

A. Selection of Comparison Market

    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 Comparison Market Prices section below.

B. Cost of Production Analysis

    Because we disregarded below-cost sales in the final results of the 
third administrative review, we had 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 
fourth POR. As a result, the Department initiated a COP inquiry for LM 
for the fourth 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. We relied 
on LM's submitted average COP calculations for the POR except that we 
have preliminarily excluded the value of LM's reported income offset to 
G&A expenses. We preliminarily find that the record does not include 
sufficient information on the nature of these offsets or their 
corresponding costs to warrant including them in the G&A calculation. 
See the Analysis Memorandum.

[[Page 45033]]

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 LM's U.S. sales 
are prepaid. Therefore, the adjustment for U.S. imputed credit reduces 
NV.

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 to these three 
customer categories 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, packs the merchandise, 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, 
2004, through August 31, 2005:

------------------------------------------------------------------------
                                                       Weighted-Average
                      Producer                       Margin (Percentage)
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Joint Stock Company Liepajas Metalurgs.............                 6.03
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    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.

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.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification will apply to entries of 
subject merchandise during the POR produced by companies included in 
these preliminary results of review for which the reviewed companies 
did not

[[Page 45034]]

know their merchandise was destined for the United States. In such 
instances, the Department will instruct CBP to liquidate unreviewed 
entries at the all-others rate if there is no rate for the intermediate 
company(ies) involved in the transaction. For a full discussion of this 
clarification, see Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

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: August 1, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-12865 Filed 8-7-06; 8:45 am]
BILLING CODE 3510-DS-S