[Federal Register Volume 73, Number 151 (Tuesday, August 5, 2008)]
[Notices]
[Pages 45393-45400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17935]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-831]


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

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 stainless steel 
sheet and strip in coils (SSSSC) from Taiwan with respect to three 
companies. Only one respondent, Chia Far Industrial Factory Co., Ltd. 
(Chia Far), is participating in this review. The period of review (POR) 
is July 1, 2006, through June 30, 2007.
    We preliminarily determine that Chia Far made sales below normal 
value (NV).
    If the preliminary results are adopted in our final results of this 
administrative review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties on all appropriate 
entries. Interested parties are invited to comment on the preliminary 
results.

EFFECTIVE DATE: August 5, 2008.

FOR FURTHER INFORMATION CONTACT: Henry Almond, AD/CVD Operations, 
Office 2, Import Administration-Room 1870, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone:(202) 482-
0049.

SUPPLEMENTARY INFORMATION:

Background

    On July 27, 1999, the Department published in the Federal Register 
the antidumping duty order on SSSSC from Taiwan. See Notice of 
Antidumping Duty Order; Stainless Steel Sheet and Strip in Coils From 
United Kingdom, Taiwan, and South Korea, 64 FR 40555 (July 27, 1999) 
(SSSSC Order). On July 3, 2007, the Department published in the Federal 
Register a notice of opportunity to request administrative review of 
the antidumping duty order on SSSSC from Taiwan. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 72 FR 36420 (July 3, 
2007). On July 31, 2007, the petitioners\1\ submitted a timely request 
for the Department to conduct an administrative review of the sales of 
SSSSC made during the POR by Chain Chon Industrial Co., Ltd.; Chia Far; 
Chien Shing Stainless Co.; China Steel Corporation; Emerdex Stainless 
Flat-Rolled Products, Inc.; Emerdex Stainless Steel, Inc.; Emerdex 
Group; Goang Jau Shing Enterprise Co., Ltd.; PFP Taiwan Co. Ltd.; Ta 
Chen Stainless Pipe Co., Ltd. (Ta Chen); Tang Eng Iron Works; Yieh 
Loong Enterprise Co., Ltd. (also known as Chung Hung Steel Co., Ltd.); 
Yieh Trading Corp. (also known as Yieh Corp.); Yieh Mau Corp.; and Yieh 
United Steel Corporation (YUSCO), pursuant to section 751(a) of the 
Tariff Act of 1930, as amended (the Act), and in accordance with 19 CFR 
351.213(b)(1). On August 24, 2007, the Department published a notice of 
initiation of administrative review covering each of these 15 
companies. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 72 FR 
48613, 48614 (Aug. 24, 2007).
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    \1\ The petitioners are Allegheny Ludlum Corporation, AK Steel 
Corporation, United Auto Workers Local 3303, United Steelworkers of 
America, AFL-CIO/CLC, and Zanesville Armco Independent Organization.
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    In October 2007, the petitioners withdrew their request for 
administrative review with respect to the following 12 companies: China 
Steel Corporation; Emerdex Stainless Flat Rolled Products, Inc.; 
Emerdex Stainless Steel, Inc.; Emerdex Group; Tang Eng Iron Works; PFP 
Taiwan Co., Ltd.; Yieh Loong Enterprise Co., Ltd. (aka Chung Hung Steel 
Co., Ltd.); Yieh Trading Corp.; Goang Jau Shing Enterprise Co., Ltd.; 
Yieh Mau Corp.; Chien Shing Stainless Co.; and Chain Chon Industrial 
Co., Ltd. Subsequently, also in October 2007, the Department issued its 
quantity

[[Page 45394]]

and value (Q&V) questionnaire to Chia Far, Ta Chen, and YUSCO, the 
remaining three companies for which a review was requested. We received 
Chia Far's response to the Q&V questionnaire, as well as certification 
of no shipments from YUSCO and Ta Chen, on October 26, 2007, and 
October 29, 2007, respectively.
    In November 2007, the Department issued the antidumping duty 
questionnaire to Chia Far. In December 2007, we received Chia Far's 
response to section A of the questionnaire (i.e., the section regarding 
general information), as well as its response to sections B through D 
of the questionnaire (i.e., the sections regarding sales and cost 
data).
    Also in December 2007, we issued a letter to Ta Chen requesting 
that it reconcile its claim that it did not ship subject merchandise to 
the United States during the POR with information the Department 
obtained from CBP. Ta Chen responded to our request for information 
regarding its POR shipments in January 2008.
    In March 2008, we published a notice rescinding the administrative 
review with respect to the 12 companies named above based on the 
petitioners' timely withdrawal of the review requests. See Stainless 
Steel Sheet and Strip in Coils from Taiwan; Partial Rescission of 
Antidumping Duty Administrative Review and Notice of Extension of Time 
Limits for Preliminary Results of Antidumping Duty Administrative 
Review, 73 FR 16264 (Mar. 27, 2008).
    In April and May 2008, we issued supplemental questionnaires 
covering sections A through D to Chia Far. We received Chia Far's 
responses to the supplemental questionnaires in May and June 2008.

Period of Review

    The POR is July 1, 2006, through June 30, 2007.

Scope of the Order

    The products covered by the order are certain stainless steel sheet 
and strip in coils. Stainless steel is an alloy steel containing, by 
weight, 1.2 percent or less of carbon and 10.5 percent or more of 
chromium, with or without other elements. The subject sheet and strip 
is a flat-rolled product in coils that is greater than 9.5 mm in width 
and less than 4.75 mm in thickness, and that is annealed or otherwise 
heat treated and pickled or otherwise descaled. The subject sheet and 
strip may also be further processed (e.g., cold-rolled, polished, 
aluminized, coated, etc.) provided that it maintains the specific 
dimensions of sheet and strip following such processing.
    The merchandise subject to the order is classified in the 
Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 
7219.13.00.31, 7219.13.00.51, 7219.13.00.71, 7219.13.00.81, 
7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 7219.32.00.05, 
7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 7219.32.00.36, 
7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 7219.33.00.05, 
7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 7219.33.00.36, 
7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 7219.34.00.05, 
7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 7219.34.00.35, 
7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 7219.35.00.35, 
7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 
7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 7220.20.10.10, 
7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 
7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 
7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 7220.20.70.60, 
7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 7220.20.90.60, 
7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the Department's written description of the merchandise under 
the order is dispositive.
    Excluded from the scope of the order are the following: 1) sheet 
and strip that is not annealed or otherwise heat treated and pickled or 
otherwise descaled, 2) sheet and strip that is cut to length, 3) plate 
(i.e., flat-rolled stainless steel products of a thickness of 4.75 mm 
or more), 4) flat wire (i.e., cold-rolled sections, with a prepared 
edge, rectangular in shape, of a width of not more than 9.5 mm), and 5) 
razor blade steel. Razor blade steel is a flat-rolled product of 
stainless steel, not further worked than cold-rolled (cold-reduced), in 
coils, of a width of not more than 23 mm and a thickness of 0.266 mm or 
less, containing, by weight, 12.5 to 14.5 percent chromium, and 
certified at the time of entry to be used in the manufacture of razor 
blades. See Chapter 72 of the HTSUS, ``Additional U.S. Note'' 1(d).
    Also excluded from the scope of the order are certain specialty 
stainless steel products described below. Flapper valve steel is 
defined as stainless steel strip in coils containing, by weight, 
between 0.37 and 0.43 percent carbon, between 1.15 and 1.35 percent 
molybdenum, and between 0.20 and 0.80 percent manganese. This steel 
also contains, by weight, phosphorus of 0.025 percent or less, silicon 
of between 0.20 and 0.50 percent, and sulfur of 0.020 percent or less. 
The product is manufactured by means of vacuum arc remelting, with 
inclusion controls for sulphide of no more than 0.04 percent and for 
oxide of no more than 0.05 percent. Flapper valve steel has a tensile 
strength of between 210 and 300 ksi, yield strength of between 170 and 
270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between 460 and 
590. Flapper valve steel is most commonly used to produce specialty 
flapper valves in compressors.
    Also excluded is a product referred to as suspension foil, a 
specialty steel product used in the manufacture of suspension 
assemblies for computer disk drives. Suspension foil is described as 
302/304 grade or 202 grade stainless steel of a thickness between 14 
and 127 microns, with a thickness tolerance of plus-or-minus 2.01 
microns, and surface glossiness of 200 to 700 percent Gs. Suspension 
foil must be supplied in coil widths of not more than 407 mm, and with 
a mass of 225 kg or less. Roll marks may only be visible on one side, 
with no scratches of measurable depth. The material must exhibit 
residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm 
over 685 mm length.
    Certain stainless steel foil for automotive catalytic converters is 
also excluded from the scope of the order. This stainless steel strip 
in coils is a specialty foil with a thickness of between 20 and 110 
microns used to produce a metallic substrate with a honeycomb structure 
for use in automotive catalytic converters. The steel contains, by 
weight, carbon of no more than 0.030 percent, silicon of no more than 
1.0 percent, manganese of no more than 1.0 percent, chromium of between 
19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of 
no more than 0.045 percent, sulfur of no more than 0.03 percent, 
lanthanum of less than 0.002 or greater than 0.05 percent, and total 
rare earth elements of more than 0.06 percent, with the balance iron.
    Permanent magnet iron-chromium-cobalt alloy stainless strip is also 
excluded from the scope of the order. This ductile stainless steel 
strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 
percent cobalt, with the remainder of iron, in widths 228.6 mm or less, 
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic 
remanence between 9,000 and 12,000 gauss, and a coercivity of between 
50 and 300 oersteds. This product is most commonly used in

[[Page 45395]]

electronic sensors and is currently available under proprietary trade 
names such as Arnokrome III.\2\
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    \2\ Arnokrome III is a trademark of the Arnold Engineering 
Company.
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    Certain electrical resistance alloy steel is also excluded from the 
scope of the order. This product is defined as a non-magnetic stainless 
steel manufactured to American Society of Testing and Materials 
specification B344 and containing, by weight, 36 percent nickel, 18 
percent chromium, and 46 percent iron, and is most notable for its 
resistance to high temperature corrosion. It has a melting point of 
1390 degrees Celsius and displays a creep rupture limit of 4 kilograms 
per square millimeter at 1000 degrees Celsius. This steel is most 
commonly used in the production of heating ribbons for circuit breakers 
and industrial furnaces, and in rheostats for railway locomotives. The 
product is currently available under proprietary trade names such as 
Gilphy 36.\3\
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    \3\ Gilphy 36 is a trademark of Imphy, S.A.
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    Certain martensitic precipitation-hardenable stainless steel is 
also excluded from the scope of the order. This high-strength, ductile 
stainless steel product is designated under the Unified Numbering 
System as S45500-grade steel, and contains, by weight, 11 to 13 percent 
chromium, and 7 to 10 percent nickel. Carbon, manganese, silicon and 
molybdenum each comprise, by weight, 0.05 percent or less, with 
phosphorus and sulfur each comprising, by weight, 0.03 percent or less. 
This steel has copper, niobium, and titanium added to achieve aging, 
and will exhibit yield strengths as high as 1700 Mpa and ultimate 
tensile strengths as high as 1750 Mpa after aging, with elongation 
percentages of 3 percent or less in 50 mm. It is generally provided in 
thicknesses between 0.635 and 0.787 mm, and in widths of 25.4 mm. This 
product is most commonly used in the manufacture of television tubes 
and is currently available under proprietary trade names such as 
Durphynox 17.\4\
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    \4\ Durphynox 17 is a trademark of Imphy, S.A.
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    Finally, three specialty stainless steels typically used in certain 
industrial blades and surgical and medical instruments are also 
excluded from the scope of the order. These include stainless steel 
strip in coils used in the production of textile cutting tools (e.g., 
carpet knives).\5\ This steel is similar to AISI grade 420 but 
containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also 
contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 
0.020 percent or less, and includes between 0.20 and 0.30 percent 
copper and between 0.20 and 0.50 percent cobalt. This steel is sold 
under proprietary names such as GIN4 Mo. The second excluded stainless 
steel strip in coils is similar to AISI 420-J2 and contains, by weight, 
carbon of between 0.62 and 0.70 percent, silicon of between 0.20 and 
0.50 percent, manganese of between 0.45 and 0.80 percent, phosphorus of 
no more than 0.025 percent and sulfur of no more than 0.020 percent. 
This steel has a carbide density on average of 100 carbide particles 
per 100 square microns. An example of this product is GIN5 steel. The 
third specialty steel has a chemical composition similar to AISI 420 F, 
with carbon of between 0.37 and 0.43 percent, molybdenum of between 
1.15 and 1.35 percent, but lower manganese of between 0.20 and 0.80 
percent, phosphorus of no more than 0.025 percent, silicon of between 
0.20 and 0.50 percent, and sulfur of no more than 0.020 percent. This 
product is supplied with a hardness of more than Hv 500 guaranteed 
after customer processing, and is supplied as, for example, GIN6.\6\
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    \5\ This list of uses is illustrated and provided for 
descriptive purposes only.
    \6\ GIN4 Mo, GIN5 and GIN6 are the proprietary grades of Hitachi 
Metals America, Ltd.
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Preliminary Partial Rescission of Review

    As noted in the ``Background'' section above, two respondents, Ta 
Chen and YUSCO, certified to the Department that they had no shipments/
entries of subject merchandise into the United States during the POR. 
The Department subsequently confirmed with CBP the no-shipment claim 
made by YUSCO. See the August 31, 2007, Memorandum to The File from 
Nichole Zink, Analyst, entitled, ``2006-2007 Administrative Review of 
Stainless Steel Sheet and Strips in Coils from Taiwan: Entry 
Information from U.S. Customs and Border Protection (CBP)'' (CBP Memo). 
Because the evidence on the record indicates that YUSCO did not export 
subject merchandise to the United States during the POR, we 
preliminarily determine it is appropriate to rescind the review for 
YUSCO, in accordance with 19 CFR 351.213(d)(3) and consistent with the 
Department's practice. See, e.g., Chia Far Indus. Factory Co., Ltd. v. 
United States, 343 F. Supp 2d 1344, 1374 (2004); Certain Steel Concrete 
Reinforcing Bars From Turkey; Final Results, Rescission of Antidumping 
Duty Administrative Review in Part, and Determination To Revoke in 
Part, 70 FR 67665, 67666 (Nov. 8, 2005) (Rebar from Turkey); and Notice 
of Final Results and Partial Rescission of Antidumping Duty 
Administrative Review: Certain Welded Carbon Steel Pipe and Tube from 
Turkey, 63 FR 35190, 35191 (June 29, 1998) (Pipe and Tube from Turkey).
    Regarding Ta Chen, CBP information indicated that this company may 
have had shipments or entries of subject merchandise during the POR. 
See the CBP Memo. Based on the CBP information, on December 14, 2007, 
we requested that Ta Chen reconcile its no-shipment claim with 
information contained in the CBP memo. On January 7, 2008, Ta Chen 
responded to our request for information explaining that the entries at 
issue are not subject merchandise because they are not of coiled 
product. After reviewing the CBP data, and the documents provided by Ta 
Chen in its January 7 submission, including invoices, mill test 
reports, and shipping documents, we preliminarily determine that Ta 
Chen's POR entries were not subject merchandise as defined by the scope 
of the order. Specifically, the order only covers products in coils, 
and the evidence submitted by Ta Chen shows that the entries in 
question were of stainless steel strip that was cut-to-length, and not 
in coils. Therefore, in accordance with 19 CFR 351.213(d)(3) and 
consistent with the Department's practice, we are also preliminarily 
rescinding our review with respect to Ta Chen. See, e.g., Rebar From 
Turkey, 70 FR at 67666; Pipe and Tube from Turkey, 63 FR at 3519.

Affiliation

    In the 2005-2006 administrative review, the most recently completed 
segment of this proceeding, we found Chia Far and Lucky Medsup Inc. 
(Lucky Medsup), one of Chia Far's U.S. reseller customers, to be 
affiliated under section 771(33) of the Act based upon: 1) a document 
demonstrating the existence of a principal-agent relationship; 2) Chia 
Far's degree of involvement in sales between Lucky Medsup and its 
customers, showing that for some sales Chia Far knew the identity of 
the end-customer before it set its price to Lucky Medsup; 3) the fact 
that Lucky Medsup only sold subject merchandise produced by Chia Far; 
and 4) the fact that Lucky Medsup did not maintain inventory of, or 
further manufacture, SSSSC. See Stainless Steel Sheet and Strip in 
Coils From Taiwan: Final Results and Rescission in Part of Antidumping 
Duty Administrative Review, 73 FR 6932 (Feb. 6, 2008), and accompanying 
Issues and Decision Memorandum at Comment 3 (2005-2006 SSSSC from 
Taiwan Final Results). This affiliation determination was consistent 
with the Department's

[[Page 45396]]

findings in prior administrative reviews of the antidumping duty order 
on SSSSC from Taiwan. See, e.g., Stainless Steel Sheet and Strip in 
Coils From Taiwan; Final Results and Partial Rescission of Antidumping 
Duty Administrative Review, 71 FR 75504 (Dec. 15, 2006); Stainless 
Steel Sheet and Strip From Taiwan; Final Results and Partial Rescission 
of Antidumping Duty Administrative Review, 67 FR 6682 (Feb. 13, 2002), 
and accompanying Issues and Decision Memorandum at Comment 23 (upheld 
by the Court of International Trade (CIT) in Chia Far Industrial 
Factory Co. Ltd. v. United States, et al., 343 F. Supp. 2d 1344, 1356 
(CIT 2004)). See also the July 25, 2008, memorandum from Henry Almond, 
Analyst, to the file entitled, ``Placing Information Regarding the 
Principal-Agent Relationship between Lucky Medsup Inc. and Chia Far 
Industrial Factory Co., Ltd. on the Record of the 2006-2007 Antidumping 
Duty Administrative Review on Stainless Steel Sheet and Strip in Coils 
from Taiwan.''
    In the instant administrative review, Chia Far has continued to 
argue that it is not affiliated with Lucky Medsup. Chia Far concedes 
that the relationship between the two companies has not changed from 
the prior reviews, except that the two have recently exchanged 
correspondence stating that the sole distribution relationship entered 
into in 1994 was terminated in 1995, and that Lucky Medsup has recently 
begun selling merchandise produced by other manufacturers. 
Notwithstanding the additional information provided by Chia Far, we 
preliminarily find that the manner in which Chia Far and Lucky Medsup 
conduct business between them has not materially changed from the 
previous review and we continue to find that Chia Far and Lucky Medsup 
are affiliated, in accordance with section 771(33) of the Act.
    Chia Far acknowledges that, with the exception of the exchange of 
correspondence stating that the 1994 sole distributorship arrangement 
had been terminated in 1995, ``the pertinent facts with respect to that 
relationship have not changed between the two review periods.'' See 
Chia Far's December 3, 2007, submission at page 7. While Chia Far and 
Lucky Medsup may have exchanged a letter stating that the sole 
distributor relationship was terminated in 1995, this declaration has 
not changed the fact that these companies continue to operate in a 
principal-agent relationship. In Notice of Final Results of Antidumping 
Duty Administrative Review: Furfuryl Alcohol From the Republic of South 
Africa, 62 FR 61084, 61089 (Nov. 14, 1997), the Department stated that 
even in the absence of an explicit agreement, where there exists a 
principal who has the potential to control pricing and/or the terms of 
sale through the end-customer, the Department will find agency and thus 
affiliation. The letter purporting to establish the date that the sole 
distributorship relationship was terminated was submitted for the 
purposes of this proceeding and was not a document generated in the 
ordinary course of business from the applicable time period. Given that 
this letter was not produced in the ordinary course of business, and in 
light of other evidence on the record, specifically the fact that the 
functional relationship between the two companies has not changed, we 
have preliminarily determined not to place great weight on the letter. 
Additionally, there is no other evidence on the record of this 
administrative review that indicates the principal-agent relationship 
found in prior reviews does not continue to exist in this review. Those 
conditions established: 1) Chia Far's degree of involvement in sales 
between Lucky Medsup and its customers; 2) that Chia Far knew the 
identity of Lucky Medsup's customers, and the customers were aware Chia 
Far was the supplier; 3) that Lucky Medsup operated as a ``go-through'' 
that did not maintain any inventory or further manufacture products; 
and 4) that, with the exception of one transaction involving non-
subject merchandise, all of the products sold by Lucky Medsup during 
the POR were subject merchandise produced or exported by Chia Far.
    Section 771(33) of the Act states that for purposes of affiliation, 
``a person shall be considered to control another person if the person 
is legally or operationally in a position to exercise restraint or 
direction over that person.'' The Department's regulations further 
provide that ``{t{time} he Secretary will not find that control exists 
on the basis of these factors unless the relationship has the potential 
to impact decisions concerning the production, pricing, or cost of the 
subject merchandise or foreign like product.'' See 19 CFR 351.102(b). 
Because the relationship between the companies has not changed, as 
conceded by Chia Far, including the fact that Chia Far supplied all of 
the subject merchandise sold by Lucky Medsup during the POR, we 
continue to find for purposes of these preliminary results that Chia 
Far is affiliated with Lucky Medsup because Chia Far is in a position 
to exercise restraint or direction over Lucky Medsup.

Identifying Home Market Sales

    Section 773(a)(1)(B) of the Act defines NV as the price at which 
the foreign like product is first sold (or, in the absence of a sale, 
offered for sale) for consumption in the exporting country (home 
market), in the usual commercial quantities and in the ordinary course 
of trade and, to the extent practicable, at the same level of trade 
(LOT) as the export price (EP) or constructed export price (CEP). In 
implementing this provision, the CIT has found that sales should be 
reported as home market sales if the producer ``knew or should have 
known that the merchandise {it sold{time}  was for home consumption 
based upon the particular facts and circumstances surrounding the 
sales.'' See Tung Mung Dev. Co v. United States, 25 CIT 752, 783 (2001) 
(quoting INA Walzlager Schaeffler KG v. United States, 957 F. Supp. 251 
(1997)). Where a respondent has no knowledge as to the destination of 
subject merchandise, except that it is for export, the Department will 
classify such sales as export sales and exclude them from the home 
market sales database. See Final Determination of Sales at Less Than 
Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain 
Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant 
Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel 
Plate From Korea, 58 FR 37176, 37182-37183 (July 9, 1993).
    In its December 21, 2007, questionnaire response, Chia Far stated 
that it shipped some of the SSSSC it sold to home market customers 
during the POR to a container yard or it placed the SSSSC in an ocean 
shipping container at the home market customer's request. The 
Department has preliminarily determined that, based on the fact that 
these sales were sent to a container yard or placed in a container by 
Chia Far at the request of the home market customer, Chia Far should 
have known that the SSSSC in question was not for consumption in the 
home market. Therefore, consistent with this determination, the 
Department has preliminarily excluded these sales from Chia Far's home 
market sales database. This treatment is consistent with our practice 
in prior administrative reviews of this order. See, e.g., Stainless 
Steel Sheet and Strip in Coils from Taiwan: Preliminary Results and 
Rescission in Part of Antidumping Duty Administrative Review, 72 FR 
43236, 43241 (Aug. 3, 2007) (2005-2006 SSSSC from Taiwan Preliminary 
Results), unchanged in 2005-2006 SSSSC from

[[Page 45397]]

Taiwan Final Results, 73 FR 6932 (Feb. 6, 2008).

Comparisons to Normal Value

    In order to determine whether Chia Far sold SSSSC to the United 
States at prices less than NV, the Department compared the EP and CEP 
of individual U.S. sales to the monthly weighted-average NV of sales of 
the foreign like product made in the ordinary course of trade. See 
section 777A(d)(2) of the Act; see also section 773(a)(1)(B)(i) of the 
Act. Section 771(16) of the Act defines foreign like product as 
merchandise that is identical or similar to subject merchandise and 
produced by the same person and in the same country as the subject 
merchandise. Thus, we considered all products covered by the scope of 
the order that were produced by the same person and in the same country 
as the subject merchandise, and sold by Chia Far in the comparison 
market during the POR, to be foreign like products for the purpose of 
determining appropriate product comparisons to SSSSC sold in the United 
States.
    During the POR, Chia Far sold subject merchandise and foreign like 
product that it made from hot- and cold-rolled stainless steel coils 
(products covered by the scope of the order) purchased from 
unaffiliated parties. Chia Far further processed the hot- and cold-
rolled stainless steel coils by performing one or more of the following 
procedures: cold-rolling, bright annealing, surface finishing/shaping, 
and slitting. We did not consider Chia Far to be the producer of the 
merchandise under review if it performed only insignificant processing 
on the coils (e.g., annealing, slitting, surface finishing). See 
Stainless Steel Plate in Coils from Belgium: Final Results of 
Antidumping Duty Administrative Review, 69 FR 74495 (Dec. 14, 2004), 
and accompanying Issues and Decision Memorandum at Comment 4 (listing 
painting, slitting, finishing, pickling, oiling, and annealing as minor 
processing for flat-rolled products). Furthermore, we did not consider 
Chia Far to be the producer of the cold-rolled products that it sold if 
it was not the first party to cold-roll the coils. The cold-rolling 
process changes the surface quality and mechanical properties of the 
product and produces useful combinations of hardness, strength, 
stiffness, and ductility. Stainless steel cold-rolled coils are 
distinguished from hot-rolled coils by their reduced thickness, tighter 
tolerances, better surface quality, and increased hardness which are 
achieved through cold-rolling. Chia Far's subsequent cold-rolling of 
the cold-rolled coils that it purchased may have modified these 
characteristics to suit the needs of particular customers; however, it 
did not impart these defining characteristics to the finished coils. 
Thus, we considered the original party that cold-rolled the product to 
be its producer.

Product Comparisons

    The Department compared U.S. sales to sales made in the comparison 
market within the contemporaneous window period, which extends from 
three months prior to the month in which the first U.S. sale was made 
until two months after the month in which the last U.S. sale was made. 
See 19 CFR 351.414(e)(2). Where there were no sales of identical 
merchandise made in the comparison market in the ordinary course of 
trade, the Department compared U.S. sales to sales of the most similar 
foreign like product made in the ordinary course of trade. In making 
product comparisons, the Department selected identical and most similar 
foreign like products based on the physical characteristics reported by 
Chia Far in the following order of importance: grade, hot- or cold-
rolled, gauge, surface finish, metallic coating, non-metallic coating, 
width, temper, and edge.

Export Price and Constructed Export Price

    The Department based the price of Chia Far's U.S. sales of subject 
merchandise on EP or CEP, as appropriate. Specifically, when Chia Far 
sold subject merchandise to unaffiliated purchasers in the United 
States prior to importation and CEP was not otherwise warranted based 
on the facts of the record, we based the price of the sale on EP, in 
accordance with section 772(a) of the Act. When Chia Far sold subject 
merchandise to unaffiliated purchasers in the United States through its 
U.S. affiliate, Lucky Medsup, we based the price of the sale on CEP, in 
accordance with section 772(b) of the Act.
    We based EP on packed prices to the first unaffiliated purchaser in 
the United States. We made deductions from the starting price for 
foreign inland freight expenses, foreign brokerage and handling 
expenses, international freight expenses, marine insurance expenses, 
container handling charges, harbor maintenance fees, and certificate-
of-origin fees in, accordance with section 772(c)(2)(A) of the Act.
    We based CEP on packed prices sold to the first unaffiliated 
purchaser in the United States. We made deductions for foreign inland 
freight expenses, foreign brokerage and handling expenses, container 
handling expenses, foreign harbor construction expenses, international 
freight expenses, marine insurance expenses, U.S. duty expenses, U.S. 
brokerage and handling expenses, other U.S. transportation expenses, 
and harbor maintenance fees, in accordance with section 772(c)(2)(A) of 
the Act.
    In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we deducted from CEP those selling expenses associated with 
economic activities occurring in the United States, including direct 
selling expenses (i.e., imputed credit expenses, bank fees, and 
warranties) and indirect selling expenses.
    In addition, we deducted from the CEP starting price an amount for 
CEP profit (profit allocated to expenses deducted under sections 
772(d)(1) and (d)(2) of the Act), in accordance with sections 772(d)(3) 
and 772(f) of the Act. We computed profit by deducting from the total 
revenue realized on sales in both the U.S. and home markets all 
expenses associated with those sales. We then allocated profit to the 
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

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared the volume of home market sales of the foreign like product 
to the volume of U.S. sales of the subject merchandise, in accordance 
with section 773(a)(1)(C) of the Act. Because the aggregate volume of 
Chia Far's home market sales of the foreign like product is more than 
five percent of the aggregate volume of its U.S. sales of subject 
merchandise, we based NV on sales of the foreign like product in the 
respondent's home market.

B. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same LOT as the EP or CEP. Sales are made at different LOTs if they are 
made at different marketing stages (or their equivalent). See 19 CFR 
351.412(c)(2). Substantial differences in selling activities are a 
necessary, but not sufficient, condition for determining that there is 
a difference in the stages of marketing. Id. See also Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length

[[Page 45398]]

Carbon Steel Plate From South Africa, 62 FR 61731, 61732 (Nov. 19, 
1997) (Plate from South Africa). In order to determine whether the 
comparison market sales were at different stages in the marketing 
process than the U.S. sales, we reviewed the distribution system in 
each market (i.e., the chain of distribution), including selling 
functions, class of customer (customer category), and the level of 
selling expenses for each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison market sales (i.e., NV based on either home 
market or third country prices),\7\ we consider the starting prices 
before any adjustments. For CEP sales, we consider only the selling 
activities reflected in the price after the deduction of expenses and 
profit under section 772(d) of the Act. See Micron Tech., Inc. v. 
United States, 243 F.3d 1301, 1313-14 (Fed. Cir. 2001).
---------------------------------------------------------------------------

    \7\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses, general and administrative (G&A) expenses, and 
profit for CV, where possible.
---------------------------------------------------------------------------

    When the Department is unable to match U.S. sales of the foreign 
like product in the comparison market at the same LOT as the EP or CEP, 
the Department may compare the U.S. sale to sales at a different LOT in 
the comparison market. In comparing EP or CEP sales at a different LOT 
in the comparison market, where available data make it practicable, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if the NV LOT is more remote from the factory than 
the CEP LOT and there is no basis for determining whether the 
difference in LOTs between NV and CEP affects price comparability 
(i.e., no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Plate 
from South Africa, 62 FR at 61732-33.
    In this administrative review, we obtained information from Chia 
Far regarding the marketing stages involved in making the reported home 
market and U.S. sales, including a description of the selling 
activities performed by Chia Far for each channel of distribution. Chia 
Far reported that it made EP sales in the U.S. market to distributors, 
as well as CEP sales to Lucky Medsup. Chia Far reported identical 
selling activities in selling to its unaffiliated U.S. customers as it 
did in selling to its affiliate, Lucky Medsup. We examined the selling 
activities performed for both channels and found that Chia Far 
performed the following types of selling activities equally in selling 
to its unaffiliated U.S. customers and to Lucky Medsup: 1) price 
negotiation and communication with the customer; 2) arranging for 
freight and the provision of customs clearance/brokerage services 
(where necessary); and 3) provision of general technical advice (where 
necessary) and quality assurance-related activities, including warranty 
services. These selling activities can be generally grouped into four 
selling function categories for analysis: 1) sales and marketing; 2) 
freight and delivery; and 3) inventory maintenance and warehousing; 
and, 4) warranty and technical support. Accordingly, we find that Chia 
Far performed sales and marketing, freight and delivery services, and 
warranty and technical support services for U.S. sales. Because the 
level of Chia Far's selling activities did not vary by distribution 
channel, we preliminarily determine that there is one LOT in the U.S. 
market.
    With respect to the home market, Chia Far reported that it made 
sales to distributors and end users. We examined the selling activities 
performed for home market sales and found that Chia Far performed the 
following types of selling activities equally for sales to distributors 
and end users: 1) price negotiation and communication with the 
customer; 2) arranging for freight (where necessary); 3) provision of 
general technical advice (where necessary) and quality assurance-
related activities, including providing warranty services and rebates; 
and 4) post-sale warehousing/processing on request. Accordingly, based 
on the selling functions analysis described above, we find that Chia 
Far performed sales and marketing, freight and delivery services, 
warranty and technical support services, and inventory maintenance and 
warehousing for home market sales. Consequently, we preliminarily 
determine that there is one LOT in the home market for Chia Far.
    Finally, we compared the U.S. LOT to the home market LOT and found 
that the selling functions performed for U.S. and home market customers 
do not differ significantly. Specifically, although Chia Far performed 
occasional warehousing and post-sale processing functions in the home 
market that it did not perform on sales to the United States, we do not 
find these differences to be material selling function distinctions 
significant to warrant a separate LOT for purposes of these preliminary 
results. Thus, we determine that the NV LOT for Chia Far is the same as 
the U.S. LOT for Chia Far.
    Regarding the CEP-offset provision, as described above, it is 
appropriate only if the NV LOT is more remote from the factory than the 
CEP LOT and there is no basis for determining whether the difference in 
LOTs between NV and CEP affects price comparability. Because we find 
that no difference in LOTs exists, we do not find that a CEP offset is 
warranted for Chia Far.

C. Cost of Production Analysis

    In the 2005-2006 administrative review, the most recently completed 
segment of this proceeding as of the date of initiation of this review, 
the Department determined that Chia Far sold the foreign like product 
at prices below the cost of producing the product and excluded such 
sales from the calculation of NV. See 2005-2006 SSSSC from Taiwan Final 
Results, 73 FR at 6935. As a result, the Department initiated an 
investigation to determine whether Chia Far made home market sales 
during the POR at prices below their COPs. See section 773(b)(2)(A)(ii) 
of the Act.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, for each foreign 
like product sold by Chia Far during the POR, we calculated a weighted-
average COP based on the sum of the respondent's materials and 
fabrication costs, G&A expenses, and financial expenses.
    For the cost of SSSSC not produced by Chia Far, as in prior 
segments of this proceeding, we used, as facts available, Chia Far's 
costs to produce merchandise with characteristics identical or similar 
to the characteristics of the merchandise not produced by Chia Far. See 
2005-2006 SSSSC from Taiwan Preliminary Results, 72 FR at 43224, 
unchanged in 2005-2006 SSSSC from Taiwan Final Results, 73 FR 6932. We 
find that the percentage of Chia Far's U.S. sales accounted for by this 
merchandise is not significant. However, in future segments of this 
proceeding, if the proportion of merchandise produced by other 
manufacturers becomes significant, we may request that Chia Far provide 
cost data from its unaffiliated supplier.
    For further information, see the July 30, 2008, Memorandum to the 
File from Henry Almond entitled, ``Sales Calculation Adjustments for 
Chia Far Industrial Factory Co., Ltd. (Chia Far) for the Preliminary 
Results.''
2. Test of Comparison-Market Sales Prices
    In order to determine whether sales were made at prices below the 
COP on a product-specific basis, we compared the Chia Far's weighted-
average COP to the prices of its home market sales of foreign like 
product, as required under

[[Page 45399]]

section 773(b) of the Act. In accordance with sections 773(b)(1)(A) and 
(B) of the Act, in determining whether to disregard home market sales 
made at prices less than the COP, we examined whether such sales were 
made: 1) in substantial quantities within an extended period of time; 
and 2) at prices which permitted the recovery of all costs within a 
reasonable period of time. We compared the COP to home market sales 
prices, less any applicable movement charges and direct and indirect 
selling expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of Chia Far's sales of a given product were made at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of Chia Far's sales of a given 
product were made at prices less than the COP during the POR, we 
determined such sales to have been made in ``substantial quantities'' 
within an extended period of time (i.e., one year) pursuant to sections 
773(b)(2)(B) and (C) of the Act. Based on our comparison of POR average 
costs to reported prices, we also determined, in accordance with 
section 773(b)(2)(D) of the Act, that these sales were not made at 
prices which would permit recovery of all costs within a reasonable 
period of time. As a result, we disregarded the below-cost sales of 
that product.

D. Calculation of Normal Value Based on Comparison Market Prices

    We based NV for Chia Far on prices to unaffiliated customers in the 
home market. We made deductions from the starting price, where 
appropriate, for billing adjustments and rebates. We also made 
deductions from the starting price for foreign inland freight expenses 
under section 773(a)(6)(B)(ii) of the Act. In addition, we made 
adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410(c) for differences in credit expenses, bank fees, and 
warranties.
    We also deducted home market packing costs and added U.S. packing 
costs, in accordance with sections 773(a)(6)(A) and (B) of the Act. 
Finally, we made adjustments for differences in costs attributable to 
differences in the physical characteristics of the merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act and 19 CFR 351.415, based on the exchange rates 
in effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank.

Preliminary Results of the Review

    We preliminarily determine that the following weighted-average 
dumping margin exists for the respondent for the period July 1, 2006, 
through June 30, 2007:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/Exporter                       Margin
------------------------------------------------------------------------
Chia Far Industrial Factory Co., Ltd........................        2.71
------------------------------------------------------------------------

Disclosure and Public Hearing

    The Department will disclose to parties the calculations performed 
in connection with these preliminary results within five days of the 
date of publication of this notice. See 19 CFR 351.224(b). Pursuant to 
19 CFR 351.309(c)(ii), interested parties may submit cases briefs not 
later than 30 days after the date of publication of this notice. 
Rebuttal briefs, limited to issues raised in the case briefs, may be 
filed not later than 35 days after the date of publication of this 
notice. See 19 CFR 351.309(d)(1). Parties who submit case briefs or 
rebuttal briefs in this proceeding are requested to submit with each 
argument: 1) a statement of the issue; 2) a brief summary of the 
argument; and 3) a table of authorities. See 19 CFR 351.309(c)(2).
    Pursuant to 19 CFR 351.310(c), interested parties who wish to 
request a hearing, or to participate if one is requested, must submit a 
written request to the Assistant Secretary for Import Administration, 
Room 1870, within 30 days of the date of publication of this notice. 
Requests should contain: 1) the party's name, address and telephone 
number; 2) the number of participants; and 3) a list of issues to be 
discussed. Id. Issues raised in the hearing will be limited to those 
raised in the respective case briefs. The Department will issue the 
final results of this administrative review, including the results of 
its analysis of the issues raised in any written briefs, not later than 
120 days after the date of publication of this notice, pursuant to 
section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries, in accordance with 19 CFR 351.212. The Department will issue 
appropriate appraisement instructions for the companies subject to this 
review directly to CBP 15 days after the date of publication of the 
final results of this review.
    For Chia Far, we will calculate importer-specific ad valorem duty 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
those sales.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., less than 0.50 percent). Pursuant to 19 CFR 
351.106(c)(2), we will instruct CBP to liquidate without regard to 
antidumping duties any entries for which the assessment rate is de 
minimis. See 19 CFR 351.106(c)(1). The final results of this review 
shall be the basis for the assessment of antidumping duties on entries 
of merchandise covered by the final results of this review and for 
future deposits of estimated duties, where applicable.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment 
Policy Notice). This clarification will apply to entries of subject 
merchandise during the POR produced by companies included in these 
final results of review for which the reviewed companies did not know 
that the merchandise they sold to the 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 all others rate if there is no rate for the intermediary involved 
in the transaction. See Assessment Policy Notice for a full discussion 
of this clarification.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(2)(C) of the Act: 1) the cash deposit rate for Chia Far will be 
that 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 no cash

[[Page 45400]]

deposit will be required; 2) for previously reviewed or investigated 
companies not participating 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, or the 
initial 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) the cash 
deposit rate for all other manufacturers or exporters will continue to 
be 12.61 percent, the all others rate made effective by the LTFV 
investigation. See SSSSC Order, 64 FR at 40557. 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 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.
    These preliminary results of administrative review and notice are 
issued and published in accordance with sections 751(a)(1) and 
777(i)(1) of the Act and 19 CFR 351.221.

    Dated: July 30, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-17935 Filed 8-4-04; 8:45 am]
BILLING CODE 3510-DS-S