[Federal Register Volume 73, Number 193 (Friday, October 3, 2008)]
[Notices]
[Pages 57602-57606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23393]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-823-808]


Suspension of Antidumping Investigation: Certain Cut-to-Length 
Carbon Steel Plate From Ukraine

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

ACTION: Notice of revised suspension agreement on certain cut-to-length 
carbon steel plate from Ukraine.

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EFFECTIVE DATE: November 1, 2008.
SUMMARY: The Department of Commerce (``the Department'') has revised 
the agreement suspending the antidumping duty investigation involving 
certain cut-to-length carbon steel plate (``CTL plate'') from Ukraine. 
The basis for this action is an agreement between the Department and 
Ukrainian CTL plate producers accounting for substantially all imports 
of CTL plate from Ukraine, wherein each signatory producer/exporter 
individually agrees to make any necessary price revisions to eliminate 
completely any amount by which the normal value (NV) of this 
merchandise exceeds the U.S. price of its merchandise subject to the 
Agreement.

FOR FURTHER INFORMATION CONTACT: Judith Wey Rudman or Jay Carreiro at 
(202) 482-0192 or (202) 482-3674, respectively; Office of Policy, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street & Constitution Avenue, NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION: 

Background

    On October 24, 1997, the Department entered into an agreement with 
the Government of Ukraine which suspended the antidumping duty 
investigation on certain cut-to-length carbon steel plate (CTL plate) 
from Ukraine. See Suspension of Antidumping Duty Investigation: Certain 
Cut-to-Length Carbon Steel Plate from Ukraine, 62 FR 61766 (November 
19, 1997). In accordance with section 734(g) of the Tariff Act of 1930 
(the Act), on November 19, 1997, the Department also published its 
final determination of sales at less than fair value in this case. See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate From Ukraine, 62 FR 61754 (November 
19, 1997).
    On February 17, 2006, based on the evidence of economic reforms to 
that date, the Department revoked Ukraine's status as a non-market 
economy country under section 771(18)(B) of the Act, effective on 
February 1, 2006. Based on a request by certain Ukrainian producers of 
CTL plate, we are converting the current non-market economy suspension 
agreement to a market economy agreement. On August 5, 2008, 
representatives of OJSC Alchevsk Iron & Steel Works, Azovstal Iron & 
Steel Works, and Ilyich Iron & Steel Works (collectively the 
``Ukrainian CTL plate producers'') initialed a proposed, revised 
suspension agreement. We invited interested parties to comment on the 
proposed agreement. We received no comments.
    On September 29, 2008, the revised Suspension Agreement was signed 
by

[[Page 57603]]

representatives of the Ukrainian CTL plate producers and the 
Department. The effective date of the agreement is November 1, 2008.

Scope of the Agreement

    For a complete description of the scope of the agreement, See 
Agreement Suspending the Antidumping Investigation on Certain Cut-to-
Length Carbon Steel Plate from Ukraine, Appendix A, attached hereto.

Suspension of Investigation

    The Department consulted with the parties to the proceeding and, in 
accordance with section 734(b) of the Act, we have determined that the 
agreement will eliminate completely sales at less than fair value of 
imported subject merchandise. Moreover, in accordance with section 
734(d) of the Act, we find that the agreement is in the public 
interest, and that the agreement can be monitored effectively. See 
Public Interest and Effective Monitoring Assessment Memorandum, dated 
September 29, 2008. We find, therefore, that the criteria for 
suspension of an investigation pursuant to sections 734(b) and (d) of 
the Act have been met. The terms and conditions of this agreement, 
signed September 29, 2008, are set forth in Appendix I to this notice.

Administrative Protective Order Access

    The Administrative Protective Orders (APOs) the Department granted 
in the original investigation segment of this proceeding remain in 
place. While the investigation is suspended, parties subject to those 
APOs may retain, but may not use, information received under those 
APOs. All parties wishing access to business proprietary information 
submitted during the administration of the 2008 Suspension Agreement 
must submit new APO applications, using the Department's current 
application, Form ITA-367(2.08). An APO for the administration of the 
2008 Suspension Agreement will be placed on the record within five days 
of the date of publication of this notice in the Federal Register.
    Business proprietary information released under APO in the 1997 
Suspension of Antidumping Duty Investigation: Certain Cut-to-Length 
Carbon Steel Plate from Ukraine must be destroyed in accordance with 
item 19(d) of the Department's application for APO, Form ITA-367 
(3.89).
    We are publishing this notice in accordance with section 
734(f)(1)(A) of the Act and 19 CFR 351.208(g)(2).

    Dated: September 29, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.

APPENDIX I

Agreement Suspending the Antidumping Investigation of Certain Cut-to-
Length Carbon Steel Plate From Ukraine (A-823-808)

    Pursuant to section 734(b) of the Tariff Act of 1930, as amended 
(19 U.S.C. Sec.  1673c(b)) (the ``Act''), and 19 CFR 351.208 (the 
``Regulations''), the U.S. Department of Commerce (the 
``Department'') and the signatory producers/exporters of certain 
cut-to-length carbon steel plate from Ukraine (the ``Signatories'') 
enter into this suspension agreement (the ``Agreement''). As of the 
effective date, this Agreement supersedes the suspension agreement 
entered into by the Department and the Government of Ukraine on 
October 24, 1997. By agreement of the Parties, the October 24, 1997 
suspension agreement shall cease to have force or effect as of the 
effective date of this Agreement.\1\ On the basis of this Agreement, 
the Department shall continue to suspend its antidumping 
investigation, which it completed on October 24, 1997 (62 FR 61754, 
November 19, 1997), with respect to certain cut-to-length carbon 
steel plate from Ukraine, subject to the terms and provisions set 
forth below.
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    \1\ However, the export licenses issued prior to the effective 
date of this agreement will be valid until their expiration date 
(i.e. 60 days after issuance) pursuant to the terms of the October 
24, 1997 suspension agreement.
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(A) Product Coverage

    For purposes of this Agreement, the products covered are certain 
cut-to-length carbon steel plate, as described in Appendix A.

(B) U.S. Import Coverage

    The signatory producers/exporters collectively are the producers 
and exporters in Ukraine that, during the most recently completed 
calendar year, accounted for substantially all (not less than 85 
percent) of the subject merchandise imported into the United States, 
as provided in the Department's regulations. The Department may at 
anytime during the period of the Agreement require additional 
producers/exporters in Ukraine to sign the Agreement in order to 
ensure that not less than substantially all imports into the United 
States are covered by the Agreement.
    In reviewing the operation of the Agreement for the purpose of 
determining whether this Agreement has been violated or is no longer 
in the public interest, the Department will consider imports into 
the United States from all sources of the merchandise described in 
Section A of the Agreement. For this purpose, the Department will 
consider factors including, but not limited to, the following: 
volume of trade, pattern of trade, whether or not the reseller is an 
original equipment manufacturer, and the reseller's export price 
(``EP'').

(C) Basis of the Agreement

    On and after the effective date of the Agreement, each signatory 
producer/exporter individually agrees to make any necessary price 
revisions to eliminate completely any amount by which the normal 
value (``NV'') of this merchandise exceeds the U.S. price of its 
merchandise subject to the Agreement. For this purpose, the 
Department will determine the NV in accordance with section 773(e) 
of the Act and U.S. price in accordance with section 772 of the Act.
    (1) For the period from the effective date of this Agreement 
through the release of the first NVs, each signatory producer/
exporter agrees not to sell its merchandise subject to this 
Agreement in the United States.
    (2) For all sales occurring on and after the date of issuance of 
the first NVs, each signatory producer/exporter agrees not to sell 
its merchandise subject to this Agreement to any unaffiliated 
purchaser in the United States at prices that are less than the NV 
of the merchandise, as determined by the Department. These NVs shall 
apply to sales occurring during the semi-annual period (i.e., 
January through June and July through December), beginning on the 
first day of the month following the date the Department provides 
the NVs, except that for the period from the effective date of this 
Agreement through December 31, 2008, the NVs are applicable on the 
effective date of this Agreement or upon issuance of the final NVs, 
whichever comes later.
    (3) Normally, preliminary NVs for the January through June semi-
annual period will be provided to the parties on November 20 and the 
final NVs will be provided to the parties on December 20. Normally, 
the preliminary NVs for the July through December semi-annual period 
will be provided to the parties on May 20 and the final NVs will be 
provided to the parties on June 20.\2\
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    \2\ The issuance of the NV may be delayed in order to resolve 
issues raised in comments from interested parties or by the 
Department and for the purpose of allowing sufficient time for 
signatories to respond to the Department's request for sales and 
cost data. In accordance with section 773(f) of the Act, the 
Department will examine prices and costs within Ukraine and, for any 
sales period, may disregard particular prices or costs when the 
prices are not in the ordinary course of trade, the costs are not in 
accordance with the generally accepted accounting principles, the 
costs do not reasonably reflect the costs associated with the 
production and sale of the merchandise, or in other situations 
provided for in the Act or the Department's regulations. Examples of 
possible areas in which adjustments may be necessary include, but 
are not limited to, costs related to energy, depreciation, 
transactions among affiliates, barters, as well as items that are 
not recognized by the home country's generally accepted accounting 
principles.
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(D) Monitoring

    Each signatory producer/exporter will supply to the Department 
all information that the Department decides is necessary to ensure 
that the producer/exporter is in full compliance with the terms of 
the Agreement. As explained below, the Department will provide each 
signatory producer/exporter a detailed request for information and 
prescribe a required format and method of

[[Page 57604]]

data compilation, not later than the beginning of each reporting 
period.

(1) Sales Information

    The Department will require each producer/exporter to report, in 
electronic form in the prescribed format and using the prescribed 
method of data compilation, each sale of the merchandise subject to 
the Agreement, either directly or indirectly to unaffiliated 
purchasers in the United States, including each adjustment 
applicable to each sale, as specified by the Department.
    Each signatory producer/exporter requesting NVs as of the 
effective date of the Agreement through December 31, 2008 will have 
submitted sales data, covering the period from July 1, 2007 to 
December 31, 2007, prior to the effective date of this Agreement. 
Each signatory producer/exporter requesting NVs to be effective from 
January 1, 2009 to June 30, 2009 will have submitted sales data, 
covering the period from January 1, 2008 to June 30, 2008, prior to 
the effective date of this Agreement. After the effective date of 
this Agreement, the first report of sales data shall be submitted to 
the Department, in electronic form (e.g., on diskette, zip disk, or 
CD ROM) in the prescribed format and using the prescribed method of 
data compilation, not later than January 31, 2009, and shall contain 
the specified sales information covering the period July 1, 2008 to 
December 31, 2008. Subsequent reports of sales data shall be 
submitted to the Department not later than July 31 and January 31 of 
each year, and each report shall contain the specified sales 
information for the semiannual period ending one month prior to the 
due date, except that if the Department receives information that a 
possible violation of the Agreement may have occurred, the 
Department may request sales data on a more frequent basis.

(2) Cost Information

    Producers/exporters must request NVs for all subject merchandise 
that will be sold in the United States. For those products for which 
the producer/exporter is requesting NVs, the Department will require 
each producer/exporter to report: its actual cost of manufacturing; 
selling, general and administrative (``SG&A'') expenses; and profit 
data on a semiannual basis, in the prescribed format and using the 
prescribed method of data compilation. As indicated in Appendix B, 
profit will be reported by the producers/exporters on a semiannual 
basis. Each such producer/exporter also must report anticipated 
increases in production costs in the semiannual period in which the 
information is submitted resulting from factors such as anticipated 
changes in production yield, changes in production processes, 
changes in production quantities or changes in production 
facilities.
    Each signatory producer/exporter requesting NVs as of the 
effective date of the Agreement through December 31, 2008 will have 
submitted cost data, covering the period from July 1, 2007 to 
December 31, 2007, prior to the effective date of this Agreement. 
Each signatory producer/exporter requesting NVs for the period 
January 1, 2009 to June 30, 2009 will have submitted cost data, 
covering the period from January 1, 2008 to June 30, 2008, prior to 
the effective date of this Agreement. After the effective date of 
this Agreement, the first report of cost data shall be submitted to 
the Department not later than February 14, 2009, and shall contain 
the specified cost data covering the period July 1, 2008 to December 
31, 2008. Each subsequent report shall be submitted to the 
Department not later than August 14 and February 14 of each year, 
and each report shall contain the specified information for the 
semiannual period ending 45 days prior to the due date.

(3) Special Adjustment of Normal Value

    If the Department determines that the NV it calculated for a 
previous semiannual period was erroneous because the reported costs 
for that period were inaccurate or incomplete, or for any other 
reason, the Department may adjust the NV in a subsequent period or 
periods, unless the Department determines that Section F of the 
Agreement applies.

(4) Verification

    Each producer/exporter agrees to permit full verification of all 
cost and sales information semiannually, or more frequently, as the 
Department deems necessary.

(5) Bundling or Other Arrangements

    Producers/exporters agree not to circumvent the Agreement. In 
accordance with the dates set forth in section D(1) of this 
Agreement, producers/exporters will submit a written statement to 
the Department certifying that the sales reported herein were not, 
or are not part of or related to, any bundling arrangement, on-site 
processing arrangement, discounts/free goods/financing package, swap 
or other exchange where such arrangement is designed to circumvent 
the basis of the Agreement.
    Where there is reason to believe that such an arrangement does 
circumvent the basis of the Agreement, the Department will request 
producers/exporters to provide within 15 days all particulars 
regarding any such arrangement, including, but not limited to, sales 
information pertaining to covered and non-covered merchandise that 
is manufactured or sold by producers/exporters. The Department will 
accept written comments, not to exceed 30 pages, from all parties no 
later than 15 days after the date of receipt of such producer/
exporter information.
    If the Department, after reviewing all submissions, determines 
that such arrangement circumvents the basis of the Agreement, it 
may, as it deems most appropriate, utilize one of two options: (1) 
The amount of the effective price discount resulting from such 
arrangement shall be reflected in the NV in accordance with section 
D(3) of this Agreement, or (2) the Department shall determine that 
the Agreement has been violated and take action according to the 
provisions under section F of this Agreement.

(6) Rejection of Submissions

    The Department may reject any information submitted after the 
deadlines set forth in this section or any information that it is 
unable to verify to its satisfaction. If information is not 
submitted in a complete and timely fashion or is not fully 
verifiable, the Department may calculate NV, and/or U.S. price based 
on facts otherwise available, as it determines appropriate, unless 
the Department determines that section F of this Agreement applies.

(E) Disclosure and Comment

    (1) The Department may make available to representatives of each 
interested party to the proceeding, under appropriately drawn 
administrative protective orders, business proprietary information 
submitted to the Department during the reporting period as well as 
the results of its analysis under section 777 of the Act.
    (2) For the sales period beginning on January 1, 2009, the 
Department will disclose to each producer/exporter the preliminary 
results and methodology of the Department's calculations of its NVs 
not later than November 20, 2008. At that time, the Department may 
also make available such information to the interested parties to 
the proceeding in accordance with this section.
    (3) Normally, not later than May 20 and November 20 of each 
ensuing sales period, the Department will disclose to each producer/
exporter the preliminary results and methodology of the Department's 
calculations of its NVs. At that time, the Department may also make 
available such information to the interested parties to the 
proceeding, in accordance with this section.
    (4) Not later than 7 days after the date of disclosure under 
section E(2) and E(3) of this Agreement, the parties to the 
proceeding may submit written comments to the Department, not to 
exceed 15 pages. Parties may submit rebuttal briefs within five days 
after the time limit for filing the aforementioned written comments. 
After reviewing these submissions, the Department will provide to 
each producer/exporter its NVs as provided in section C(2) of this 
Agreement. In addition, the Department may provide such information 
to interested parties as specified in this section.

(F) Violations of the Agreement

    If the Department determines that the Agreement is being or has 
been violated or no longer meets the requirements of section 734(b) 
or (d) of the Act, the Department shall take action it determines 
appropriate under section 734(i) of the Act and the applicable 
regulations.

(G) Other Provisions

    In entering into the Agreement, the signatory producers/
exporters do not admit that any sales of merchandise subject to the 
Agreement have been made at less than fair value.

(H) Termination or Withdrawal

    Termination of the suspended investigation will be considered in 
accordance with the five-year review provisions of section 351.218 
of the Department's regulations.
    Any producer/exporter may withdraw from the Agreement at any 
time upon notice to the Department. Withdrawal shall be effective 60 
days after such notice is given to the Department. Upon withdrawal, 
the

[[Page 57605]]

Department shall follow the procedures outlined in section 734(i)(1) 
of the Act.

(I) Definitions

    For purposes of the Agreement, the following definitions apply:
    (1) ``U.S. price'' means the EP or constructed export price 
(``CEP'') at which merchandise is sold by the producer or exporter 
to the first unaffiliated person in the United States, including the 
amount of any discounts, rebates, price protection or ship and debit 
adjustments, and other adjustments affecting the net amount paid or 
to be paid by the unaffiliated purchaser, as determined by the 
Department under section 772 of the Act.
    (2) ``Normal value'' means the constructed value (``CV'') of the 
merchandise, as determined by the Department under section 773 of 
the Act and the corresponding sections of the Department's 
regulations, and as adjusted in accordance with Appendix B to this 
Agreement.
    (3) ``Producer/Exporter'' means (1) the foreign manufacturer or 
producer, (2) the foreign producer or reseller which also exports, 
and (3) the affiliated person by whom or for whose account the 
merchandise is imported into the United States, as defined in 
section 771(28) of the Act.
    (4) ``Date of sale'' means the date of the invoice as recorded 
in the exporter's or producer's records kept in the ordinary course 
of business, unless the Department determines that a different date 
better reflects the date on which the exporter or producer 
establishes the material terms of sale, as determined by the 
Department under its regulations.
    The effective date of this Agreement is November 1, 2008.
    For the Ukrainian Producers/Exporters:

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Walter J. Spak,
for OJSC Alchevsk Iron and Steel Works.
Date: September 29, 2008.

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Martin J. Lewin,
for Azovstal Iron & Steel Works.
Date: September 29, 2008.

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Martin J. Lewin,
for Ilyich Iron & Steel Works.
Date: September 29, 2008.

For the U.S. Department of Commerce:

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David M. Spooner,
Assistant Secretary for Import Administration.
Date: September 29, 2008.

Appendix A--Product Coverage

    For purposes of this Agreement, the products covered are hot-
rolled iron and non-alloy steel universal mill plates (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 mm, not in coils and without patterns in relief), 
of rectangular shape, neither clad, plated nor coated with metal, 
whether or not painted, varnished, or coated with plastics or other 
nonmetallic substances; and certain iron and non-alloy steel flat-
rolled products not in coils, of rectangular shape, hot-rolled, 
neither clad, plated, nor coated with metal, whether or not painted, 
varnished, or coated with plastics or other nonmetallic substances, 
4.75 mm or more in thickness and of a width which exceeds 150 mm and 
measures at least twice the thickness. Included as subject 
merchandise in the Agreement are flat-rolled products of 
nonrectangular cross-section where such cross-section is achieved 
subsequent to the rolling process (i.e., products which have been 
``worked after rolling'')--for example, products which have been 
bevelled or rounded at the edges. This merchandise is currently 
classified in the Harmonized Tariff Schedule of the United States 
(HTS) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030, 
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 
7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 
7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 
7212.40.5000, 7212.50.0000. Although the HTS subheadings are 
provided for convenience and customs purposes, our written 
description of the scope of this agreement is dispositive. 
Specifically, excluded from the subject merchandise within the scope 
of this Agreement is grade X-70 plate.

Appendix B--Principles of Cost

General Framework

    The cost information reported to the Department that will form 
the basis of the NV calculations for purposes of the Agreement must 
be: \3\
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    \3\ See footnote 1 in Section C(2) of the Agreement.
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     Comprehensive in nature and based on a reliable 
accounting system (i.e., a system based on well-established 
standards that can be tied to the audited financial statements);
     Calculated on a semiannual weighted-average basis of 
the plants or cost centers manufacturing the product;
     Based on fully-absorbed costs of production, including 
any downtime;
     Valued in accordance with generally accepted accounting 
principles; and
     Reflective of appropriately allocated common costs so 
that the costs necessary for the manufacturing of the product are 
not absorbed by other products.
    Additionally, a single figure should be reported for each cost 
component making up the cost of production.

Cost of Manufacturing (``COM'')

    COM is reported by major cost category and for major stages of 
production. Weighted-average costs are used for a product that is 
produced at more than one facility, based on the product's cost at 
each facility and relative production quantities.
    Direct materials costs include the acquisition costs of all 
materials that are identified as part of the finished product and 
may be traced to the finished product in an economically feasible 
way. In contrast to indirect materials, direct materials are applied 
and assigned directly to a finished product. Direct materials costs 
should include transportation charges, import duties, and other 
expenses normally associated with obtaining the materials that 
become an integral part of the finished product.
    Direct labor costs are the labor costs identified with a 
specific product. These costs are not allocated among products 
except when two or more products are produced at the same cost 
center. Direct labor costs should include salary, bonus and overtime 
pay, training expenses, and all fringe benefits. Any contracted-
labor expense should reflect the actual billed cost.
    Variable manufacturing overhead costs include those production 
costs, other than direct materials or direct labor, that generally 
vary in total with changes in the volume of merchandise produced at 
a given level of operations. Variable manufacturing overhead costs 
may include indirect materials (e.g., supplies used in the 
manufacturing process), indirect labor (e.g. supervisory labor paid 
on an hourly basis), utilities (e.g., energy), and other variable 
overhead costs. Because variable overhead costs are typically 
incurred for an entire production line or factory, the costs must be 
allocated to the products produced using a reasonable basis.
    Fixed manufacturing overhead costs include those production 
costs that generally do not vary in total with changes in the volume 
of merchandise produced at a given level of operations. Fixed 
manufacturing overhead costs may include the costs incurred for 
building or equipment rental, depreciation, supervisory labor paid 
on a salary basis, plant property taxes, and factory administrative 
costs. In addition, fixed manufacturing overhead costs include 
research and development (``R&D'') costs that relate specifically to 
the subject merchandise.

Cost of Production (``COP'')

    COP is equal to the sum of direct materials, direct labor, 
variable manufacturing overhead, and fixed manufacturing overhead 
(i.e. COM) plus SG&A expenses in the home market (``HM'').
    SG&A expenses are those expenses incurred for the operation of 
the corporation as a whole and not directly related to the 
manufacture of a particular product. They include corporate general 
and administrative expenses, financing expenses, and general 
research and development expenses. Additionally, direct and indirect 
selling expenses incurred in the HM for sales of the product under 
investigation are included. Such expenses are allocated to COM using 
a ratio of SG&A costs.

Constructed Value

    CV is equal to the sum of materials, labor and overhead (COM) 
and SG&A expenses plus profit in the comparison market and the cost 
of packing for exportation to the United States.

Calculation of Suspension Agreement Normal Values

    NVs (for purposes of the Agreement) are calculated by adjusting 
the CV and are provided for both EP and CEP transactions. In effect, 
any expenses uniquely associated with the covered products sold in 
the HM are subtracted from the CV, and any such

[[Page 57606]]

expenses that are uniquely associated with the covered products sold 
in the United States are added to the CV to calculate the NV.
    ``Export Price''--Generally, a U.S. sale is classified as an EP 
sale when the first sale to an unaffiliated person occurs before the 
goods are imported into the United States. In cases where the 
foreign manufacturer knows or has reason to believe that the 
merchandise is ultimately destined for the United States, the 
manufacturer's sale is the sale subject to review. If, on the other 
hand, the manufacturer sold the merchandise to a foreign trader 
without knowledge of the trader's intention to export the 
merchandise to the United States, then the trader's first sale to an 
unaffiliated person is the sale subject to review. For EP NVs, the 
CV is adjusted for movement costs and differences in direct selling 
expenses such as, commissions, credit, warranties, technical 
services, advertising, and sales promotion.
    ``Constructed Export Price''--Generally, a U.S. sale is 
classified as a CEP sale when the first sale to an unaffiliated 
person occurs after importation. However, if the first sale to an 
unaffiliated person is made by a person in the United States 
affiliated with the foreign exporter, CEP applies even if the sale 
occurs prior to importation, unless the U.S. affiliate performs only 
clerical functions in connection with the sale. For CEP NVs, the CV 
is adjusted similar to EP sales, with differences for adjustment to 
U.S. and HM indirect selling expenses.
    Home market direct selling expenses are expenses that are 
incurred as a direct result of a sale. These include such expenses 
as commissions, advertising, discounts and rebates, credit, warranty 
expenses, freight costs, etc. Certain direct-selling expenses are 
treated individually. They include:
     Commission expenses, i.e., payments to unaffiliated 
parties for sales in the HM.
     Credit expenses, i.e., expenses incurred for the 
extension of credit to HM customers.
     Movement expenses, e.g., foreign inland freight and 
insurance expenses, warehousing, and foreign brokerage, handling and 
port charges.
    U.S. direct selling expenses are the same as HM direct selling 
expenses except that they are incurred for sales in the United 
States. Movement expenses are additional expenses associated with 
importation into the United States, which typically include: U.S. 
inland freight and insurance expenses; U.S. brokerage, handling and 
port charges; U.S. Customs duties, U.S. warehousing; and 
international freight and insurance.
    U.S. indirect selling expenses include general fixed expenses 
incurred by the U.S. sales subsidiary or affiliated exporter for 
sales to the United States and may also include a portion of 
indirect expenses incurred in the HM for export sales, if those 
expenses are associated with commercial activity that takes place in 
the United States.
    The EP and CEP NVs are calculated as follows:

------------------------------------------------------------------------
                                           For EP transactions
------------------------------------------------------------------------
+                                Direct Materials.
+                                Direct Labor.
+                                Factory Overhead.
=                                Cost of Manufacturing (COM).
+                                Home Market SG&A.
=                                Cost of Production (COP).
+                                U.S. Packing.
+                                Profit.
=                                Constructed Value.
+                                U.S. Direct-Selling Expense.
+                                U.S. Commission Expense.
+                                U.S. Movement Expense.
+                                U.S. Credit Expense.
-                                HM Direct-Selling Expense.
-                                HM Commission Expense.\1\
-                                HM Credit Expense.
=                                NV for EP Sales.
------------------------------------------------------------------------
\1\ If the company does not have HM commissions, HM indirect expenses
  are subtracted only up to the amount of the U.S. Commissions.


------------------------------------------------------------------------
                                           For CEP transactions
------------------------------------------------------------------------
+                                Direct Materials.
+                                Direct Labor.
+                                Factory Overhead.
=                                Cost of Manufacturing (COM).
+                                Home Market SG&A.
=                                Cost of Production (COP).
+                                U.S. Packing.
+                                Profit.
=                                Constructed Value.
+                                U.S. Direct-Selling Expense.
+                                U.S. Indirect-Selling Expense.
+                                U.S. Commission Expense.
+                                U.S. Movement Expense.
+                                U.S. Credit Expense.
+                                U.S. Further Manufacturing Expenses (if
                                  any).
+                                CEP Profit.
-                                HM Direct-Selling Expense.
-                                HM Commission Expense.\1\
-                                HM Credit Expense.
=                                NV for CEP Sales.
------------------------------------------------------------------------
\1\ If the company does not have HM commissions, HM indirect expenses
  are subtracted only up to the amount of the U.S. Commissions.

 [FR Doc. E8-23393 Filed 10-2-08; 8:45 am]
BILLING CODE 3510-DS-P