Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Slovakia

Federal RegisterJan 7, 2000

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-859-801]

Notice of Preliminary Determination of Sales at Less Than Fair

Value and Postponement of Final Determination: Certain Cold-Rolled

Flat-Rolled Carbon-Quality Steel Products From Slovakia

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: January 7, 2000.

FOR FURTHER INFORMATION CONTACT: Doug Campau or Abdelali Elouaradia, at

(202) 482-1784 or (202) 482-0498, respectively; Import Administration,

Room 1870, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, NW, Washington, DC

20230.

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act (URAA). In addition, unless otherwise

indicated, all citations to the Department of Commerce's (the

Department's) regulations refer to the regulations codified at 19 CFR

part 351 (April 1999).

Preliminary Determination

We preliminarily determine that certain cold-rolled flat-rolled

carbon-quality steel products (cold-rolled steel products) from

Slovakia are being sold, or are likely to be sold, in the United States

at less than fair value (LTFV), as provided in section 733 of the Act.

The estimated margins of sales at LTFV are shown in the Suspension of

Liquidation section of this notice.

Case History

This investigation was initiated on June 21, 1999.1 See

Initiation of Antidumping Duty Investigations: Certain Cold-Rolled

Flat-Rolled Carbon-Quality Steel Products from Argentina, Brazil, the

People's Republic of China, Indonesia, Japan, the Russian Federation,

Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela, 64 FR

34194 (June 25, 1999) (Initiation Notice). Since the initiation of the

investigation, the following events have occurred:

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\1\ The petitioners in this investigation are Bethlehem Steel

Corporation, Gulf States Steel, the Independent Steelworkers Union,

Ispat Inland Steel, LTV Steel Company Inc., National Steel

Corporation (not a petitioner in the Japan case), Steel Dynamics,

U.S. Steel Group (a unit of USX Corporation), Weirton Steel

Corporation, and United Steelworkers of America.

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On June 22 and July 29, 1999, the Department issued section A non-

market economy (NME) and market economy 2 antidumping

questionnaires, respectively, to VSZ, a.s. (VSZ), the only known

exporter of subject merchandise in Slovakia. As of the date of

initiation of this investigation, Slovakia was still considered an NME

country. On June 25, 1999, the Department received a letter from VSZ,

requesting, on behalf of the Government of Slovakia, that the

Department revoke the NME status of Slovakia under section 771(18)(A)

of the Act. On July 2, 1999, the Department initiated a formal inquiry

into Slovakia's NME status. While the Department conducted this

inquiry, VSZ voluntarily submitted responses to both the Department's

market economy questionnaire and the Department's NME questionnaire.

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\2\ Both versions of the questionnaire were issued because VSZ

had requested that the NME status of Slovakia be revoked.

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On July 16, 1999, the United States International Trade Commission

(ITC) preliminarily determined that there was a reasonable indication

that imports of the products under investigation were materially

injuring the United States industry. See Certain Cold-Rolled Steel

Products From Argentina, Brazil, China, Indonesia, Japan, Russia,

Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela:

Determinations, 64 FR 41458 (July 30, 1999).

On October 13, 1999, the Department revoked Slovakia's NME status.

See Memorandum to Robert S. LaRussa (October 13, 1999). Thereafter,

this investigation continued under the Department's market economy

procedures. See Revocation of Slovakia's Non Market Economy Status,

below.

On October 19, 1999, the Department postponed the preliminary

determination in this case for 30 days in accordance with section

733(c) of the Act and 19 CFR 351.205(b)(2). See Notice of Postponement

of Preliminary Antidumping Duty Determinations: Certain Cold-Rolled

Flat-Rolled Carbon-Quality Steel Products from Slovakia, 64 FR 57842

(October 27, 1999). On December 6, 1999, the Department further

extended the deadline for the preliminary determination to December 28,

1999. See Notice of Postponement of Preliminary Antidumping Duty

Determinations: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel

[[Page 1111]]

Products from Slovakia, 64 FR 69491 (December 13, 1999).

On November 9, 1999, the petitioners requested that the Department

initiate a below-cost sales investigation. After examining the

petitioner's request, on November 10, 1999, the Department initiated a

below-cost sales investigation. See Memorandum from Gary Taverman to

Holly Kuga (November 10, 1999).

We issued supplemental questionnaires where appropriate. Responses

to those questionnaires were timely filed, and we have incorporated the

information provided in those responses into this preliminary

determination.

Postponement of Final Determination

Section 735(a)(2) of the Act provides that a final determination

may be postponed until not later than 135 days after the date of the

publication of the preliminary determination if, in the event of an

affirmative preliminary determination, a request for such postponement

is made by exporters who account for a significant proportion of

exports of the subject merchandise, or in the event of a negative

preliminary determination, a request for such postponement is made by

the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2),

require that requests by respondents for postponement of a final

determination be accompanied by a request for extension of provisional

measures from a four-month period to not more than six months.

On October 28, 1999, VSZ requested that, in the event of an

affirmative preliminary determination in this investigation, the

Department postpone its final determination until not later than 135

days after the date of the publication of an affirmative preliminary

determination in the Federal Register. VSZ also included a request to

extend the provisional measures to not more than six months.

Accordingly, since we have made an affirmative preliminary

determination, we have postponed the final determination until not

later than 135 days after the date of the publication of the

preliminary determination.

Period of Investigation

The period of the investigation (POI) is April 1, 1998, through

March 31, 1999.

This period corresponds to the respondent's four most recent fiscal

quarters prior to the month of the filing of the petition (i.e., June

1999).

Scope of Investigation

For purposes of this investigation, the products covered are

certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel

products, neither clad, plated, nor coated with metal, but whether or

not annealed, painted, varnished, or coated with plastics or other non-

metallic substances, both in coils, 0.5 inch wide or wider, (whether or

not in successively superimposed layers and/or otherwise coiled, such

as spirally oscillated coils), and also in straight lengths, which, if

less than 4.75 mm in thickness having a width that is 0.5 inch or

greater and that measures at least 10 times the thickness; or, if of a

thickness of 4.75 mm or more, having a width exceeding 150 mm and

measuring at least twice the thickness. The products described above

may be rectangular, square, circular or other shape and include

products of either rectangular or non-rectangular 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 beveled or rounded at the edges.

Specifically included in this scope are vacuum degassed, fully

stabilized (commonly referred to as interstitial-free (IF)) steels,

high strength low alloy (HSLA) steels, and motor lamination steels. IF

steels are recognized as low carbon steels with micro-alloying levels

of elements such as titanium and/or niobium added to stabilize carbon

and nitrogen elements. HSLA steels are recognized as steels with micro-

alloying levels of elements such as chromium, copper, niobium,

titanium, vanadium, and molybdenum. Motor lamination steels contain

micro-alloying levels of elements such as silicon and aluminum.

Steel products included in the scope of this investigation,

regardless of definitions in the Harmonized Tariff Schedules of the

United States (HTSUS), are products in which: (1) Iron predominates, by

weight, over each of the other contained elements; (2) the carbon

content is 2 percent or less, by weight, and; (3) none of the elements

listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or

2.25 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

0.30 percent of tungsten, or

0.10 percent of molybdenum, or

0.10 percent of niobium (also called columbium), or

0.15 percent of vanadium, or

0.15 percent of zirconium.

All products that meet the written physical description, and in

which the chemistry quantities do not exceed any one of the noted

element levels listed above, are within the scope of this investigation

unless specifically excluded. The following products, by way of

example, are outside and/or specifically excluded from the scope of

this investigation:

SAE grades (formerly also called AISI grades) above 2300;

Ball bearing steels, as defined in the HTSUS;

Tool steels, as defined in the HTSUS;

Silico-manganese steel, as defined in the HTSUS;

Silicon-electrical steels, as defined in the HTSUS, that are

grain-oriented;

Silicon-electrical steels, as defined in the HTSUS, that are

not grain-oriented and that have a silicon level exceeding 2.25

percent;

All products (proprietary or otherwise) based on an alloy ASTM

specification (sample specifications: ASTM A506, A507);

Silicon-electrical steels, as defined in the HTSUS, that are

not grain-oriented and that have a silicon level less than 2.25

percent, and

(a) fully-processed, with a core loss of less than 0.14 watts/pound

per mil (.001 inches), or

(b) semi-processed, with core loss of less than 0.085 watts/pound

per mil (.001 inches);

Certain shadow mask steel, which is aluminum killed cold-

rolled steel coil that is open coil annealed, has an ultra-flat,

isotropic surface, and which meets the following characteristics:

Thickness: 0.001 to 0.010 inches

Width: 15 to 32 inches

Chemical Composition

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Element................................................ C

Weight %............................................... Certain flapper valve steel, which is hardened and tempered,

surface polished, and which meets the following characteristics:

Thickness: 1.0 mm

Width: 152.4 mm

Chemical Composition

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Element........................... C Si Mn P S

Weight %.......................... 0.90-1.05 0.15-0.35 0.30-0.50 0.03 0.006

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Mechanical Properties

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Tensile Strength....................... 162 Kgf/mm2

Hardness............................... 475 Vickers hardness

number

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Physical Properties

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

Flatness............................... 0.0

Oxide Inclusion......................................... 0.0

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Compressive Stress: 10 to 40 Kgf/mmT22.

Surface Roughness

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Roughness

Thickness (mm) (m)

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t0.209....................................... Rz0

0.2090.310................................. Rz0

0.3100.440................................. Rz0

0.4400.560................................. Rz0

0.5601

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Certain ultra thin gauge steel strip, which meets the

following characteristics:

Thickness: 0.100 mm 7%

Width: 100 to 600 mm

Chemical Composition

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Element........................ C Mn P S Al Fe

Weight %....................... 0.07 0.2-0.5 0.05 0.05 0.07 Balance

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Mechanical Properties

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Hardness............................... Full Hard (Hv 180 minimum)

Total Elongation....................... 2

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Physical Properties

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Surface Finish......................... 0.3 micron

Camber (in 2.0 m)...................... 0.5 mm

Edge Burr.............................. Certain silicon steel, which meets the following

characteristics:

Thickness: 0.024 inches .0015 inches

Width: 33 to 45.5 inches

[[Page 1113]]

Chemical Composition

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Element........................ C Mn P S Si Al

Min. Weight %.................. ................... .................. .................. .................. 0.65 ..................

Max. Weight %.................. 0.004 0.4 0.09 0.009 .................. 0.4

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Mechanical Properties

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

Hardness............................... B 60-75 (AIM 65)

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

Physical Properties

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Finish................................. Smooth (30-60 microinches)

Gamma Crown (in 5 inches).............. 0.0005 inches, start measuring

\1/4\ inch from slit edge

Flatness............................... 20 I-UNIT max.

Coating................................ C3A-.08A max. (A2 coating

acceptable)

Camber (in any 10 feet)................ \1/16\ inch

Coil Size I.D.......................... 20 inches

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Magnetic Properties

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Core Loss (1.5T/60 Hz) NAAS............ 3.8 Watts/Pound max.

Permeability (1.5T/60 Hz) NAAS......... 1700 gauss/oersted typical 1500

minimum

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Certain aperture mask steel, which has an ultra-flat surface

flatness and which meets the following characteristics:

Thickness: 0.025 to 0.245 mm

Width: 381-1000 mm

Chemical Composition

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Element............................. C N Al

Weight %............................ Certain tin mill black plate, annealed and temper-rolled,

continuously cast, which meets the following characteristics:

Chemical Composition

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Element...................... C Mn P S Si Al As Cu B N

Min. Weight %................ 0.02 0.20 .......... ........ .......... 0.03 .......... .......... .......... 0.003

Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 .......... 0.008 (Aiming

(Aiming (Aiming 0.005)

0.018 0.05)

Max.)

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Non-metallic Inclusions: Examination with the S.E.M. shall not

reveal individual oxides >1 micron (0.000039 inches) and inclusion

groups or clusters shall not exceed 5 microns (0.000197 inches) in

length.

Surface Treatment as follows:

The surface finish shall be free of defects (digs, scratches, pits,

gouges, slivers, etc.) and suitable for nickel plating.

Surface Finish

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Roughness, RA Microinches (Micrometers)

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Aim Min. Max.

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Extra Bright........................ 5 (0.1) 0 (0) 7 (0.2)

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Certain full hard tin mill black plate, continuously cast,

which meets the following characteristics:

Chemical Composition

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Element...................... C Mn P S Si Al As Cu B N

Min. Weight %................ 0.02 0.20 .......... ........ .......... 0.03 .......... .......... .......... 0.003

Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 .......... 0.008

(Aiming (Aiming (Aiming

0.018 0.05) 0.005)

Max.)

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Non-metallic Inclusions: Examination with the S.E.M. shall not

reveal individual oxides >1 micron (0.000039 inches) and inclusion

groups or clusters shall not exceed 5 microns (0.000197 inches) in

length.

[[Page 1114]]

Surface Treatment as follows:

The surface finish shall be free of defects (digs, scratches, pits,

gouges, slivers, etc.) and suitable for nickel plating.

Surface Finish

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Roughness, RA Microinches (Micrometers)

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Aim Min. Max

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Stone Finish........................ 16 (0.4) 8 (0.2) 24 (0.6)

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Certain ``blued steel'' coil (also know as ``steamed blue

steel'' or ``blue oxide'') with a thickness and size of 0.38 mm x 940

mm x coil, and with a bright finish;

Certain cold-rolled steel sheet, which meets the following

characteristics:

Thickness (nominal): 0.019 inches

Width: 35 to 60 inches

Chemical Composition

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Element............................. C 0 B

Max. Weight %....................... 0.004 ....................... .......................

Min. Weight %....................... ........................ 0.010 0.012

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Certain band saw steel, which meets the following

characteristics:

Thickness: 1.31 mm

Width: 80 mm

Chemical Composition

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Element........................ C Si Mn P S Cr Ni

Weight %....................... 1.2 to 1.3 0.15 to 0.35 0.20 to 0.35 0.03 0.007 0.3 to 0.5 0.25

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Other properties:

Carbide: fully spheroidized having > 80% of carbides, which are

0.003 mm and uniformly dispersed

Surface finish: bright finish free from pits, scratches, rust,

cracks, or seams

Smooth edges

Edge camber (in each 300 mm of length): 7 mm arc height

Cross bow (per inch of width): 0.015 mm max.

The merchandise subject to this investigation is typically

classified in the HTSUS at subheadings: 7209.15.0000, 7209.16.0030,

7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090,

7209.18.1530, 7209.18.1560, 7209.18.2550, 7209.18.6000, 7209.25.0000,

7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000,

7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500,

7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030, 7211.29.2090,

7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 7212.40.1000,

7212.40.5000, 7212.50.0000, 7225.19.0000, 7225.50.6000, 7225.50.7000,

7225.50.8010, 7225.50.8085, 7225.99.0090, 7226.19.1000, 7226.19.9000,

7226.92.5000, 7226.92.7050, 7226.92.8050, and 7226.99.0000.

Although the HTSUS subheadings are provided for convenience and

United States Customs Service (U.S. Customs) purposes, the written

description of the merchandise under investigation is dispositive.

The Department set aside a period for all interested parties to

raise issues regarding product coverage. From July through October

1999, the Department received responses from a number of parties

including importers, respondents, consumers, and petitioners, aimed at

clarifying the scope of the investigation. See Memorandum to Joseph A.

Spetrini (Scope Memorandum), dated November 1, 1999, for a list of all

persons submitting comments and a discussion of all scope comments.

There are several scope exclusion requests for products which are

currently covered by the scope of this investigation that are still

under consideration by the Department. These items are considered to be

within the scope for this preliminary determination; however, these

requests will be reconsidered for the final determination. See Scope

Memorandum.

Product Comparisons

In accordance with section 771(16) of the Act, all products

produced by the respondent covered by the description in the Scope of

Investigation section, above, and sold in Slovakia during the POI, are

considered to be foreign like products for purposes of determining

appropriate product comparisons to U.S. sales. We have relied on 14

criteria to match U.S. sales of subject merchandise to comparison-

market sales of the foreign like product: hardening and tempering,

paint, carbon level, quality, yield strength, minimum thickness,

thickness tolerance, width, edge finish, form, temper rolling,

leveling, annealing, and surface finish. These characteristics have

been weighted by the Department, where appropriate. 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 next most similar foreign like

product on the basis of the characteristics as listed above.

Revocation of Slovakia's Non-Market Economy Status

In determining whether to revoke NME-country status under section

771(18)(A) of the Act, the Department must take into account the

following factors under section 771(18)(B): (1) The extent to which the

currency of the foreign country is convertible into the currency of

other countries; (2) the extent to which wage rates in the foreign

country are determined by free

[[Page 1115]]

bargaining between labor and management; (3) the extent to which joint

ventures or other investments by firms of other foreign countries are

permitted in the foreign country; (4) the extent of government

ownership or control of the means of production; (5) the extent of

government control over the allocation of resources and over the price

and output decisions of enterprises; and (6) such other factors as the

administrating authority considers appropriate.

Since its emergence as an independent, democratic state, Slovakia

has made significant progress in its transformation into a market

economy country. The Slovak currency is now fully convertible. Wages in

Slovakia are largely determined by free bargaining between labor and

management. Trade has been liberalized and tariffs reduced, and the

Slovak government is actively promoting foreign investment and business

ventures. Industry, agriculture and services have all been privatized,

and the power to make decisions related to the allocation of resources,

and over pricing and output decisions, now rests with the private

sector. Based on the preponderance of evidence related to economic

reforms in Slovakia, analyzed as required under section 771(18)(B) of

the Act, the Department revoked Slovakia's NME country status,

effective January 1, 1998. See Memorandum to Robert S. LaRussa (October

13, 1999).

Fair Value Comparisons

To determine whether sales of cold-rolled steel products from

Slovakia were made in the United States at LTFV, we compared the export

price (EP) to the normal value (NV), as described in the Export Price

and Normal Value sections of this notice, below. In accordance with

section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs

for comparison to weighted-average NVs.

Export Price

In accordance with section 772 of the Act, we calculated an EP for

each sale. Section 772(a) of the Act defines EP as the price at which

the subject merchandise is first sold or offered for sale, before the

date of importation by the exporter or producer outside of the United

States, to an unaffiliated purchaser in the United States or to an

unaffiliated purchaser for exportation to the United States. Consistent

with this definition, we have found that VSZ made only EP sales during

the POI.

We calculated EP based on cost and freight (C&R) packed prices

charged to the first unaffiliated customer in the United States. In

accordance with section 772(c)(2) of the Act, we made deductions from

the starting price, where appropriate, for movement expenses, including

foreign inland freight and inland insurance for shipment from the mill

to the port of export, foreign warehousing expenses, and ocean freight.

We added interest revenue to the starting price for sales that had been

paid late and for which the respondent collected actual interest

revenue. See Preliminary Calculation Memorandum (December 28, 1999).

We note that, according to VSZ's reported data, certain of VSZ's

U.S. sales were unpaid as of the date of this preliminary

determination. Petitioners asserted that all of VSZ's unpaid sales

should be treated as bad debt and, therefore, that the Department

should treat such unpaid sales amounts as a direct selling expense. VSZ

claims that it is still negotiating the payment of all reported sales,

and because, as specified in its financial statement, the sales have

not been written off, it would be inappropriate to treat the amount of

the sales as direct selling expenses.

We have preliminarily accepted VSZ's claim that it has not written

off the amounts due on any of the U.S. sales. We have, however,

recalculated the imputed credit expenses for U.S. sales for which

payment had not yet been received by setting the date of payment equal

to the date of signature of this preliminary determination. We intend

to examine this issue closely at verification.

Normal Value

A. Selection of Comparison Market

Section 773(a)(1) of the Act directs that NV be based on the price

at which the foreign like product is sold in the home market, provided

that the merchandise is sold in sufficient quantities (or value, if

quantity is inappropriate), and that there is no particular market

situation that prevents a proper comparison with the EP. The statute

contemplates that quantities (or value) will normally be considered

insufficient if they are less than five percent of the aggregate

quantity (or value) of sales of the subject merchandise to the United

States.

VSZ had a viable home market for cold-rolled steel products, and

reported home market sales data for purposes of the calculation of NV.

In deriving NV, we made certain adjustments as detailed in the

Calculation of Normal Value Based on Home-Market Prices and Calculation

of Normal Value Based on Constructed Value sections of this notice,

below.

B. Cost of Production Analysis

As noted above, on November 8, 1999, petitioners filed a below-cost

sales allegation against VSZ. After analyzing the allegation, in

accordance with section 773(b)(2)(A)(i) of the Act, we found reasonable

grounds to believe or suspect that VSZ's sales of cold-rolled steel

products in Slovakia were made at prices below the COP. See Memorandum

from Gary Taverman to Holly Kuga (November 10, 1999). As a result, the

Department conducted an investigation to determine whether VSZ made

home market sales during the POI at prices below their respective COPs,

within the meaning of section 773(b) of the Act.

1. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated a

weighted-average COP based on the sum of VSZ's costs of materials and

fabrication for the foreign like product, plus amounts for general and

administrative expenses (G&A), selling expenses, commissions, packing

expenses and interest expenses. We relied on the COP data submitted by

VSZ in its cost questionnaire response.

2. Test of Home-Market Sales Prices

We compared the weighted-average COP for VSZ to home market sales

of the foreign like product, as required under section 773(b) of the

Act, in order to determine whether these sales had been made at prices

below the COP within an extended period of time (i.e., a period of one

year) in substantial quantities 3 and whether such prices

were sufficient to permit the recovery of all costs within a reasonable

period of time. On a model-specific basis, we compared the revised COP

to the home market prices, less any applicable movement charges,

discounts and rebates.

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\3\ In accordance with section 773(b)(2)(C)(i) of the Act, we

determined that sales made below the COP were made in substantial

quantities if the volume of such sales represented 20 percent or

more of the volume of sales under consideration for the

determination of NV.

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3. Results of the COP Test

Pursuant to section 773(b)(2)(C) of the Act, where less than 20

percent of a respondent's sales of a given product were at prices less

than the COP, we did not disregard any below-cost sales of that product

because we determined that the below-cost sales were not made in

``substantial quantities.'' Where 20 percent or more of a respondent's

sales of a given product during the POI were at prices less than the

COP, we determined such sales to have been made in ``substantial

quantities'' within

[[Page 1116]]

an extended period of time in accordance with section 773(b)(2)(B) of

the Act. In such cases, because we compared prices to POI average

costs, we also determined that such sales were not made at prices that

would permit recovery of all costs within a reasonable period of time,

in accordance with section 773(b)(2)(D) of the Act. We therefore

disregarded these below-cost sales and used the remaining sales as the

basis for determining NV, in accordance with section 773(b)(1) of the

Act. For those U.S. sales of cold-rolled steel products for which there

were no comparable home-market sales in the ordinary course of trade,

we compared EPs to CV in accordance with section 773(a)(4) of the Act.

See Calculation of Normal Value Based on Constructed Value, below.

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

We performed price-to-price comparisons where there were sales of

comparable merchandise in the home market that did not fail the cost

test.

We calculated NV based on ex-factory prices and made deductions

from the starting price, where appropriate, for inland freight. In

addition, we made circumstance-of-sale (COS) adjustments for direct

expenses, where appropriate, in accordance with section

773(a)(6)(C)(iii) of the Act. These included imputed credit expenses,

warranty expenses, and other direct selling expenses. We recalculated

the imputed credit expenses for U.S. sales for which payment had not

yet been received by setting the date of payment equal to the date of

signature of this preliminary determination. See Preliminary

Calculation Memorandum (December 28, 1999). We also made adjustments to

the starting price for discounts and rebates.

In accordance with sections 773(a)(6)(A) and (B) of the Act, we

deducted home market packing costs and added U.S. packing costs.

D. Calculation of Normal Value Based on Constructed Value

Section 773(a)(4) of the Act provides that, where NV cannot be

based on comparison-market sales, NV may be based on CV. Accordingly,

for those models of cold-rolled steel products for which we could not

determine the NV based on comparison-market sales, either because there

were no sales of a comparable product or all sales of the comparison

products failed the COP test, we based NV on CV.

Section 773(e) of the Act provides that CV shall be based on the

sum of the respondent's cost of materials, fabrication, selling,

general and administrative (SG&A) expenses and profit. In accordance

with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit

on the amounts incurred and realized in connection with the production

and sale of the foreign like product in the ordinary course of trade,

for consumption in the foreign country. In addition, we relied on U.S.

packing costs as described in the Export Price section of this notice,

above.

We made adjustments to CV for differences in COS in accordance with

section 773(a)(8) of the Act and 19 CFR 351.410. These involved the

deduction of direct selling expenses incurred on home market sales

from, and the addition of U.S. direct selling expenses to, CV.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent

practicable, we determine NV based on sales in the comparison market at

the same level of trade (LOT) as the EP transaction. The normal-value

LOT is that of the starting-price sales in the comparison market or,

when NV is based on CV, that of the sales from which we derive SG&A

expenses and profit. The U.S. LOT for EP sales is also the level of the

starting-price sale, which is usually from exporter to importer.

To determine whether NV sales are at a different LOT than EP, we

examine stages in the marketing process and selling functions along the

chain of distribution between the producer and the unaffiliated

customer. If the comparison-market sales are at a different LOT and the

difference affects price comparability, as manifested in a pattern of

consistent price differences between the sales on which NV is based and

comparison-market sales at the LOT of the export transaction, we make a

level-of-trade adjustment under section 773(a)(7)(A) of the Act. 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

(November 19, 1997).

In implementing these principles in this investigation, we obtained

information from VSZ about the marketing stages involved in the

reported United States and home market sales, including a description

of the selling activities performed by VSZ for each channel of

distribution. In identifying LOTs for EP and home market sales, we

considered the selling functions reflected in the starting price before

any adjustments.

VSZ claimed to have two LOTs in the NV market and one LOT in the

U.S. market. We examined VSZ's distribution system, including selling

functions, classes of customers, and selling expenses. We found that

the selling functions--which included warranty, freight, processing of

sales documents, and technical advice--were sufficiently similar in the

United States and home markets to establish a single, same level of

trade in both markets. It was thus unnecessary, for this preliminary

determination, to make any level-of-trade adjustment for comparison of

EP and normal value.

Currency Conversions

We made currency conversions into United States dollars in

accordance with section 773A(a) of the Act based on exchange rates in

effect on the dates of the United States sales, as certified by the Dow

Jones Business Information Services.

Verification

In accordance with section 782(i) of the Act, we intend to verify

all information relied upon in making our final determination.

Suspension of Liquidation

In accordance with section 733(d) of the Act, we are directing

Customs to suspend liquidation of all entries of cold-rolled steel

products from Slovakia, that are entered, or withdrawn from warehouse,

for consumption on or after the date of publication of this notice in

the Federal Register. We are also instructing Customs to require a cash

deposit or the posting of a bond equal to the weighted-average amount

by which the NV exceeds the EP, as indicated in the chart below. These

instructions suspending liquidation will remain in effect until further

notice.

The weighted-average dumping margins are provided below.

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

Margin

Manufacturer/exporter (percent)

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

VSZ..................................................... 32.83

All others.............................................. 32.83

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

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our determination. If our final antidumping determination is

affirmative, the ITC will determine whether these imports are

materially injuring, or threaten material injury to, the United States

industry. The deadline for that ITC determination would be the later of

120 days after the date of these preliminary

[[Page 1117]]

determination or 45 days after the date of our final determination.

Public Comment

Case briefs for this investigation must be submitted no later than

one week after the issuance of the verification reports. Rebuttal

briefs must be filed within five days after the deadline for submission

of case briefs. A list of authorities used, a table of contents, and an

executive summary of issues should accompany any briefs submitted to

the Department. Executive summaries should be limited to five pages

total, including footnotes.

Section 774 of the Act provides that the Department will hold a

hearing to afford interested parties an opportunity to comment on

arguments raised in case or rebuttal briefs, provided that such a

hearing is requested by any interested party. If a request for a

hearing is made in an investigation, the hearing will tentatively be

held two days after the deadline for submission of the rebuttal briefs,

at the US Department of Commerce, 14th Street and Constitution Avenue,

NW, Washington, D.C. 20230. In the event that the Department receives

requests for hearings from parties to several cold-rolled cases, the

Department may schedule a single hearing to encompass all those cases.

Parties should confirm by telephone the time, date, and place of the

hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate

if one is requested, must submit a written request within 30 days of

the publication of this notice. Requests should specify the number of

participants and provide a list of the issues to be discussed. Oral

presentations will be limited to issues raised in the briefs.

If this investigation proceeds normally, we will make our final

determination no later than 135 days after the date of publication of

this notice in the Federal Register.

This determination is issued and published pursuant to sections

733(d) and 777(i)(1) of the Act.

Dated: December 28, 1999.

Holly A. Kuga,

Acting Assistant Secretary for Import Administration.

[FR Doc. 00-299 Filed 1-6-00; 8:45 am]

BILLING CODE 3510-DS-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.