[Federal Register Volume 72, Number 153 (Thursday, August 9, 2007)]
[Notices]
[Pages 44821-44825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15573]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-485-806]


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

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

SUMMARY: The Department of Commerce (the Department) is conducting an

[[Page 44822]]

administrative review of the antidumping duty order on certain hot-
rolled carbon steel flat products from Romania. The period of review is 
November 1, 2005, through October 31, 2006. We preliminarily determine 
that sales of subject merchandise by Mittal Steel Galati, S.A. (MS 
Galati), have been made below normal value. 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.

DATES: Effective Date: August 9, 2007.

FOR FURTHER INFORMATION CONTACT: David Dirstine at (202) 482-4033, AD/
CVD Operations, Office 5, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On November 29, 2001, the Department published an antidumping duty 
order on certain hot-rolled carbon steel flat products from Romania. 
See Notice of Amended Final Antidumping Duty Determination and 
Antidumping Duty Order: Certain Hot-Rolled Carbon Steel Flat Products 
From Romania, 66 FR 59566 (November 29, 2001).
    On November 1, 2006, the Department published a notice of 
opportunity to request an administrative review of the antidumping duty 
order on certain hot-rolled carbon steel flat products from Romania for 
the period November 1, 2005, through October 31, 2006. See Notice of 
Opportunity to Request Administrative Review of Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation, 71 FR 
64240 (November 1, 2006). On November 30, 2006, the Department received 
timely requests for an administrative review of this order on behalf of 
MS Galati, Nucor Corporation (a domestic interested party), and United 
States Steel Corporation (USSC), the petitioner in this proceeding.
    On December 27, 2006, the Department initiated an administrative 
review of the antidumping duty order on certain hot-rolled carbon steel 
flat products from Romania for the period November 1, 2005, through 
October 31, 2006 (Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 71 FR 77720 
(December 27, 2006)).

Scope of the Order

    For purposes of this order, the products covered are certain hot-
rolled carbon steel flat products of a rectangular shape, of a width of 
0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight length, 
of a thickness of less than 4.75 mm and of a width measuring at least 
10 times the thickness. Universal mill plate (i.e., flat-rolled 
products rolled on four faces or in a closed box pass, of a width 
exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not 
less than 4.0 mm, not in coils and without patterns in relief) of a 
thickness not less than 4.0 mm is not included within the scope of this 
order. The merchandise subject to this order is classified in the 
Harmonized Tariff Schedules of the United States (HTSUS) at the 
following subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products are covered by this order, including vacuum degassed fully 
stabilized, high strength low alloy, and the substrate for motor 
lamination steel which may also enter under the following tariff 
numbers: 7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the merchandise subject to this proceeding is 
dispositive. For a full description of the scope of the order, see 
Notice of Amended Final Antidumping Duty Determination and Antidumping 
Duty Order: Certain Hot-Rolled Carbon Steel Flat Products from Romania, 
66 FR 59566 (November 29, 2001).

Date of Sale

    Normally, the Department uses the date of invoice, as recorded in 
the exporter or producer's records kept in the normal course of 
business, as the date of sale of the subject merchandise or foreign 
like product. See 19 CFR 351.401(i). A date other than the date of 
invoice may be used, however, it we determine that a different date 
better reflects the date on which the exporter or producer establishes 
the material terms of sale. Id. In the 2003-2004 and the 2004-2005 
reviews of this order, we examined customer-order acknowledgments and 
the corresponding invoices and compared the price, quantity, terms of 
delivery, and payment terms on the documents. We found that all 
material terms of sale which were established on the date of the 
customer-order acknowledgment issued by MS Galati's U.S. subsidiary, MS 
North America (MSNA), did not change in the corresponding invoices. 
Based on our analysis in those reviews, we determined that the date of 
MSNA's customer-order acknowledgment represented the appropriate date 
of sale for reporting U.S. sales. See Certain Hot-Rolled Carbon Steel 
Flat Products From Romania: Final Results of Antidumping Duty 
Administrative Review and Rescission in Part of Administrative Review, 
71 FR 30656 (May 30, 2006), and accompanying Issues and Decision 
Memorandum at Comment 7.
    In the current review, however, we find variations in the quantity 
shipped which exceed the commercial tolerances as stated in the terms 
and conditions on the customer-order acknowledgment and on the customer 
invoice. We examined all U.S. sales made during the period of review 
and found that there were a number of occurrences where the quantity on 
the invoice differed from the contracted quantity on the customer-order 
acknowledgment. Therefore, we determine that date of invoice represents 
the appropriate date of sale for reporting U.S. sales for this 
administrative review.

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 normal 
value, we compared the constructed export price (CEP) to the normal 
value as described

[[Page 44823]]

in the ``Constructed Export Price'' and ``Normal Value'' sections of 
this notice. Therefore, pursuant to section 777A(d)(2) of the Tariff 
Act of 1930 as amended (the Act), we compared the CEPs 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 within the ``Scope of the Order'' section above which were 
produced and sold by MS Galati in the home market during the period of 
review to be foreign like product for the purpose of determining 
appropriate product comparisons to U.S. sales of subject merchandise. 
We relied on the following eleven characteristics, in order of 
significance, to match U.S. sales of subject merchandise to comparison 
sales of the foreign like product: (1) Painted; (2) quality; (3) carbon 
content; (4) yield strength; (5) thickness; (6) width; (7) form; (8) 
temper rolled; (9) pickled; (10) edge trim; and (11) patterns in 
relief. Where there were no sales of identical merchandise in the home 
market to compare to U.S. sales, we compared U.S. sales to the most 
similar foreign like product on the basis of the characteristics and 
reporting instructions we identified in our questionnaire. See Appendix 
III and IV of the Department's antidumping duty questionnaire to MS 
Galati dated January 17, 2007.

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) of the Act. For purposes of this administrative review, we have 
treated sales by MS Galati as CEP transactions because MS Galati's U.S. 
affiliate, MSNA, made the first sale to an unaffiliated party in the 
United States. Therefore, we based CEP on the packed, duty-paid prices 
to unaffiliated purchasers in the United States in accordance with 
sections 772(b), (c), and (d) of the Act. We made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act. 
These deductions included 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) and indirect selling expenses.
    For these 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 pursuant to sections 772(d)(1) and 772(d)(2) of 
the Act 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 all home-market sales of the 
foreign like product and the 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 normal value. Because the volume of home-market 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) of 
the Act we have based the determination of normal value on the home-
market sales of the foreign like product. Thus, we used as normal value 
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 as the CEP sales, as appropriate. See section 
773(a)(1)(B)(i) of the Act. After testing home-market viability, we 
calculated normal value as discussed in the ``Price-to-Price 
Comparisons'' section of this notice.

B. Cost-of-Production Analysis

    Because we disregarded below-cost sales by MS Galati in the home 
market in the previous administrative review, we conducted a sales-
below-cost investigation of MS Galati's home-market sales of the 
foreign like product in the current administrative review. See section 
773(b)(2)(A)(i) of the Act.
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average cost of production based on the sum of the cost of 
materials and fabrication for the foreign like product plus amounts for 
home-market general and administrative (G&A) expenses, interest 
expenses, and packing expenses. We relied on the cost-of-production 
data MS Galati submitted in its March 27, 2007, questionnaire response.
    On a model-specific basis, we compared the cost of production to 
the home-market prices, less any applicable movement charges and direct 
and indirect selling expenses.
    We disregarded below-cost sales where 20 percent or more of MS 
Galati's sales of a given product were made at prices below the cost of 
production 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 where, based on comparisons of the price to the 
weighted-average cost of production, 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.

C. Arm's-Length Test

    MS Galati reported that it made sales in the home market to 
affiliated and unaffiliated customers. The Department did not require 
MS Galati to report downstream sales by its affiliated party because 
these sales represented less than five percent of its total home-market 
sales. See 19 CFR 351.405(d). We excluded sales to affiliated customers 
in the home market not made in the ordinary course of trade from our 
analysis pursuant to section 773(a)(1)(B)(i) of the Act. To determine 
whether sales to affiliated customers were made in the ordinary course 
of trade, we tested whether sales to each affiliated customer were made 
at arm's length. As such, we compared the starting prices of sales to 
affiliated and unaffiliated customers net of all 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, consistent 
with Antidumping Proceedings: Affiliated

[[Page 44824]]

Party Sales in the Ordinary Course of Trade, 67 FR 69186 (November 15, 
2002).

D. Price-to-Price Comparisons

    We based normal value on the home-market sales to unaffiliated 
purchasers and sales to affiliated customers that passed the arm's-
length test. We adjusted gross unit price for reported freight revenue. 
We made adjustments for physical differences in the merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act. We made 
adjustments 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)(iii) of the Act. In accordance with section 
773(a)(6) of the Act, we deducted home-market packing costs and added 
U.S. packing costs.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine normal value based on sales in the 
comparison market at the same level of trade as the CEP transaction. 
See also 19 CFR 351.412. The normal-value level of trade is the level 
of the starting-price sales in the comparison market or, when normal 
value is based on constructed value, the level of the sales from which 
we derive selling, general, and administrative expenses and profits. 
For CEP sales, the U.S. level of trade is the level of the constructed 
sale from the exporter to the affiliated importer. See 19 CFR 
351.412(c)(1).
    To determine whether home-market sales are at a different level of 
trade than 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 home-market sales are at a 
different level of trade than CEP sales and the difference affects 
price comparability, as manifested in a pattern of consistent price 
differences between sales on which normal value is based and home-
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. For 
CEP sales, if the normal-value level is more remote from the factory 
than the CEP level and there is no basis for determining whether the 
difference in levels between normal value and CEP affects price 
comparability, we adjust normal value under section 773(a)(7)(B) of the 
Act (the CEP offset). See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From 
South Africa, 62 FR 61731-33 (November 19, 1997).
    In this review, MS Galati reported that it sold to unaffiliated 
distributors and end-users in Romania as well as to affiliated end-
users for consumption and affiliated distributors. In the United 
States, MS Galati had sales to an affiliate, MSNA, that resold the 
merchandise to unaffiliated customers.
    MS Galati reported one level of trade in the home market with the 
following three channels of distribution: (1) Direct sales to customers 
where the customer picks up the merchandise at MS Galati's location or 
MS Galati ships the goods to the destination requested by the customer; 
(2) sales with delivery to the Danube River port of Galati, located a 
few kilometers from MS Galati's location, where certain customers load 
the goods on barges for delivery within Romania; (3) sales through its 
affiliated warehouse. Home-market sales were made to two classes of 
customers, end-users and distributors. Along with MS Galati's home-
market sales of merchandise stored at its affiliated warehouse, MS 
Galati also had sales to affiliated end-users for consumption. Based on 
our review of evidence on the record, we find that home-market sales 
through the three 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 level of trade for its home-market sales.
    MS Galati reported one CEP level of trade with one channel of 
distribution in the United States which consists of its U.S. 
affiliate's direct sales to end-users and distributors of merchandise 
shipped directly from Romania. As such, 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. Accordingly, we reviewed the selling functions and 
services MS Galati reported it performed on CEP sales and we have 
determined that the selling functions it performed on all CEP sales 
were identical. Therefore, we preliminarily determine that there is one 
CEP level of trade 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 it provided 
in the home market. We found that MS Galati performs more selling 
functions for its home-market sales than those it provides to its U.S. 
affiliate, MSNA. MS Galati reported that it provided minimal selling 
functions and services for the CEP level of trade and that, as a 
result, the home-market level of trade is more advanced than the CEP 
level of trade. Based on our analysis of the channels of distribution 
and MS Galati's selling functions for sales in the home market and CEP 
sales in the U.S. market, we preliminarily find that the home-market 
level of trade 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 it performed for its CEP sales.
    We examined whether a level-of-trade adjustment or CEP offset may 
be appropriate. In this case, MS Galati sold at one level of trade in 
the home market. Therefore, there is no information available to 
determine a pattern of consistent price differences between the sales 
on which we base normal value and the home-market sales at the level of 
trade of the export transaction, in accordance with our normal 
methodology as described above. See 19 CFR 351.412(d). We do not have 
record information which would allow us to examine pricing patterns 
based on MS Galati's sales of other products, and there are no other 
respondents or other record information on which such as analysis could 
be based. Accordingly, because the data available do not provide an 
appropriate basis for making a level-of-trade adjustment but the level 
of trade in the home market is at a more advanced state of distribution 
than the level of trade of the CEP transactions, we have made a CEP-
offset adjustment to normal value in accordance with section 
773(a)(7)(B) of the Act and 19 CFR 351.412(f).
    To calculate the CEP offset, we deducted the home-market indirect 
selling expenses from normal value for home-market sales that we 
compared to U.S. CEP sales. As such, we limited the deduction for home-
market indirect selling expenses by the amount of the indirect selling 
expenses we deducted in calculating the CEP as required under section 
772(d)(1)(D) of the Act.

Currency Conversion

    We made currency conversions pursuant to 19 CFR 351.415 based on

[[Page 44825]]

the rates certified by the Federal Reserve Bank.

Preliminary Results of Review

    We preliminarily determine that the weighted-average dumping margin 
for MS Galati during the period November 1, 2005, through October 31, 
2006, is 11.02 percent.
    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties calculations performed in connection with these preliminary 
results within five days of the date of publication of this notice. Any 
interested party may request a hearing within 30 days of publication of 
this notice. If requested, a hearing will be held at the main 
Department building. We will notify parties of the exact date, time, 
and place for any such hearing.
    Issues raised in the hearing will be limited to those raised in the 
respective case and rebuttal briefs. Case briefs from interested 
parties may be filed no later than 30 days after publication of this 
notice. See 19 CFR 351.309(c)(1)(ii). Rebuttal briefs, limited to the 
issues raised in case briefs, may be submitted no later than five days 
after the deadline for filing case briefs. See 19 CFR 351.309(d). 
Parties who submit case or rebuttal briefs in this proceeding are 
requested to submit with each argument a statement of the issue and a 
brief summary of the argument with an electronic version included.
    The Department will publish a notice of final results of this 
administrative review, which will include the results of its analysis 
of issues raised in the case briefs, within 120 days from the date of 
publication of these preliminary results.

Assessment Rate

    The Department will determine and U.S. Customs and Border 
Protection (CBP) shall assess antidumping duties on all appropriate 
entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an 
importer-specific assessment rate. The Department calculated 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 entered value of the examined sales for that importer. We intend 
to issue appropriate assessment instructions directly to CBP 15 days 
after publication of the final results of review. See 19 CFR 
351.212(b)(1).
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Notice of Policy Concerning Assessment of Antidumping 
Duties, 68 FR 23954 (May 6, 2003) (Assessment-Policy Notice). This 
clarification will apply to entries of subject merchandise during the 
period of review produced by MS Galati for which MS Galati did not know 
that the merchandise it sold to an intermediary (e.g., a reseller, 
trading company, or exporter) was destined for the United States. In 
such instances, we will instruct CBP to liquidate unreviewed entries at 
the 17.84 percent all-others rate if there is no rate for the 
intermediary involved in the transaction. See the Assessment-Policy 
Notice for a full discussion of this clarification.

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 hot-
rolled carbon steel flat products from Romania entered, or withdrawn 
from warehouse, for consumption on or after publication date, as 
provided by section 751(a)(2)(C) of the Act: (1) For MS Galati, the 
cash-deposit rate will be the rate established in the final results of 
this review; (2) for previously reviewed or investigated 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 antidumping duty investigation but the manufacturer is, the 
cash-deposit rate will be the rate established in the most recent 
period for the manufacturer of the merchandise; (4) if neither the 
exporter nor the manufacturer is a firm covered in this or any previous 
administrative review or in the original less-than-fair-value 
investigation, the cash-deposit rate will be 17.84 percent, the ``All 
Others'' rate made effective on June 14, 2005. See Certain Hot-Rolled 
Carbon Steel Flat Products From Romania: Final Results of Antidumping 
Duty Administrative Review, 70 FR 34448 (June 14, 2005).
    These deposit requirements, when imposed, shall remain in effect 
until further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during the 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 notice is published in accordance with sections 751(a)(1) and 
777(i)(1) of the Act.

    Dated: August 2, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E7-15573 Filed 8-8-07; 8:45 am]
BILLING CODE 3510-DS-P