Certain Cold-Rolled Carbon Steel Flat Products From the Netherlands; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

[A-421-804]

Certain Cold-Rolled Carbon Steel Flat Products From the

Netherlands; Preliminary Results of Antidumping Duty Administrative

Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review.

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SUMMARY: In response to requests from the respondent, Hoogovens Staal

BV (Hoogovens), and from the petitioners in the original investigation,

the

[[Page 51889]]

Department of Commerce (the Department) is conducting an administrative

review of the antidumping duty order on certain cold-rolled carbon

steel flat products from the Netherlands. This review covers one

manufacturer/exporter, Hoogovens, and the period August 1, 1994 through

July 31, 1995.

We preliminarily determine the dumping margin for Hoogovens to be

9.26 percent during the period August 1, 1994, through July 31, 1995.

Interested parties are invited to comment on these preliminary results.

Parties who submit argument in this proceeding are requested to submit

with the argument: (1) A statement of the issue; and (2) a brief

summary of the argument.

EFFECTIVE DATE: October 4, 1996.

FOR FURTHER INFORMATION CONTACT: Helen M. Kramer or Linda D. Ludwig,

Enforcement Group III, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Room 7866, Washington, D.C. 20230; telephone

(202) 482-0405 or (202) 482-3833, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

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 Rounds Agreements Act (URAA). In addition, unless otherwise

indicated, all citations to the Department's regulations are to the

current regulations, as amended by the interim regulations published in

the Federal Register on May 11, 1995 (60 FR 25130).

Background

The Department published an antidumping duty order on certain cold-

rolled carbon steel flat products from the Netherlands on August 19,

1993 (58 FR 44172). The Department published a notice of ``Opportunity

to Request an Administrative Review'' of the antidumping duty order for

the 1994/95 review period on August 1, 1995 (60 FR 39150). On August

29, 1995, Hoogovens requested that the Department conduct an

administrative review of the antidumping duty order on cold-rolled

carbon steel flat products from the Netherlands. The petitioners made a

similar request on August 31, 1995. We initiated the review on

September 8, 1995 (60 FR 46817).

On February 15, 1996, the petitioners requested that the Department

determine, in accordance with section 751(a)(4) of the Act, whether

antidumping duties have been absorbed by Hoogovens during the period of

review (``POR''). Section 351.213(j) of the Department's draft

regulations provides that, for transition orders as defined in section

751(c)(6)(C) of the Act, i.e., orders in effect as of January 1, 1995,

reviews initiated in 1996 will be considered initiated in the second

year, and reviews initiated in 1998 will be considered initiated in the

fourth year. 61 FR 7317, 7366 (February 27, 1996). Although these

regulations are not yet binding upon the Department, they do constitute

a public statement of how the Department expects to proceed in

construing section 751(a)(4) of the new statute. This approach assures

that, prior to the time for sunset review under section 751(c),

interested parties will still have the opportunity to request a duty

absorption study on orders for which the second and fourth

anniversaries have already passed.

Because the order being reviewed here has been in effect since

1993, this is a review of a transition order. Therefore, based on the

policy stated above, the Department will first consider a request for

an absorption study if a review is initiated in 1996.

Under the Act, the Department may extend the deadline for

completion of administrative reviews if it determines that it is not

practicable to complete the review within the statutory time limit of

365 days. On April 1, 1996, the Department extended the time limits for

preliminary and final results in this case. See Extension of Time Limit

for Antidumping Duty Administrative Reviews, 61 FR 14291.

The Department is now conducting this administrative review in

accordance with section 751 of the Act.

Scope of the Review

The products covered by this review include cold-rolled (cold-

reduced) carbon steel flat-rolled products, of rectangular shape,

neither clad, plated nor coated with metal, whether or not painted,

varnished or coated with plastics or other nonmetallic substances, in

coils (whether or not in successively superimposed layers) and of a

width of 0.5 inch or greater, or in straight lengths which, if of a

thickness less than 4.75 millimeters, are of a width of 0.5 inch or

greater and which measures at least 10 times the thickness or if of a

thickness of 4.75 millimeters or more are of a width which exceeds 150

millimeters and measures at least twice the thickness, as currently

classifiable in the Harmonized Tariff Schedule (HTS) under item numbers

7209.11.0000, 7209.12.0030, 7209.12.0090, 7209.13.0030, 7209.13.0090,

7209.14.0030, 7209.14.0090, 7209.21.0000, 7209.22.0000, 7209.23.0000,

7209.24.1000, 7209.24.5000, 7209.31.0000, 7209.32.0000, 7209.33.0000,

7209.34.0000, 7209.41.0000, 7209.42.0000, 7209.43.0000, 7209.44.0000,

7209.90.0000, 7210.70.3000, 7210.90.9000, 7211.30.1030, 7211.30.1090,

7211.30.3000, 7211.30.5000, 7211.41.1000, 7211.41.3030, 7211.41.3090,

7211.41.5000, 7211.41.7030, 7211.41.7060, 7211.41.7090, 7211.49.1030,

7211.49.1090, 7211.49.3000, 7211.49.5030, 7211.49.5060, 7211.49.5090,

7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7217.11.1000,

7217.11.2000, 7217.11.3000, 7217.19.1000, 7217.19.5000, 7217.21.1000,

7217.29.1000, 7217.29.5000, 7217.31.1000, 7217.39.1000, and

7217.39.5000.

Included in this review 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. Excluded from this review is certain shadow mask steel,

i.e., aluminum-killed, cold-rolled steel coil that is open-coil

annealed, has a carbon content of less than 0.002 percent, is of 0.003

to 0.012 inch in thickness, 15 to 30 inches in width, and has an ultra

flat, isotropic surface. These HTS item numbers are provided for

convenience and Customs purposes. The written description remains

dispositive.

Verification

As provided in section 782(i)(3) of the Act, we verified

information provided by Hoogovens and its U.S. affiliate, Rafferty-

Brown Steel Co., Inc. of Connecticut, using standard verification

procedures, including on-site inspection of the manufacturer's

facilities, the examination of relevant sales and financial records,

and selection of original documentation containing relevant

information. Our verification results are outlined in the public

versions of the verification reports.

Transactions Reviewed

In accordance with Section 751 of the Act, the Department is

required to determine the normal value and export price (EP) of each

entry of subject merchandise during the relevant review period, and the

normal value and constructed export price (CEP) of each sale to the

first unaffiliated customer in

[[Page 51890]]

the United States during the extended window period.

Based on a comparison of the aggregate quantity of home market and

U.S. sales, we determined that the quantity of foreign like product

sold in the exporting country was sufficient to permit a proper

comparison with the sales of the subject merchandise to the United

States, pursuant to section 773(a) of the Act. Therefore, in accordance

with section 773(a)(1)(B)(i) of the Act, we based normal value (NV) on

the price at which the foreign like product was first sold for

consumption in the home market, in the usual commercial quantities and

in the ordinary course of trade. We determined that Hoogovens need not

report its home market sales made by an affiliated party to the first

unaffiliated customer (downstream sales), because these sales were

small. (See Memorandum for the File, November 8, 1995.) We used sales

to affiliated customers only where we determined such sales were made

at arm's-length prices, i.e., at prices comparable to prices at which

the respondent sold identical merchandise to unrelated customers. There

were no allegations of below-cost sales in the home market.

Product Comparisons

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

products produced by the respondent covered by the description in the

Scope of the Review section, above, and sold in the home market during

the POR, to be foreign like products for purposes of determining

appropriate product comparisons to U.S. sales. 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 listed in Appendix III of

the Department's September 14, 1995 antidumping questionnaire. In

making the product comparisons, we matched foreign like products based

on the physical characteristics reported by the respondent and verified

by the Department.

Fair Value Comparisons

To determine whether sales of certain cold-rolled carbon steel flat

products by Hoogovens to the United States were made at less than fair

value, we compared EP or CEP to NV, as described in the United States

Price and Normal Value sections of this notice. In accordance with

section 777A(d)(2), we calculated monthly weighted-average prices for

NV and compared these to individual U.S. transactions. In accordance

with section 773(a)(4) of the Act, we used constructed value (CV) as

the basis for NV when there were no contemporaneous sales of the

foreign like product in the comparison market. All the sales to which

CV was applied were CEP sales of secondary merchandise. We calculated

CV in accordance with section 773(e) of the Act and the methodology

enunciated in the Memorandum of April 19, 1995, entitled Treatment of

Non-Prime Merchandise for the First Administrative Review of Certain

Carbon Steel Flat Products. We included the cost of manufacture, and

selling, general and administrative expenses (SG&A). In accordance with

section 773(e)(2)(A) of the Act, we based SG&A expenses on the amounts

incurred by the respondent in connection with the production and sale

of the foreign like product in the ordinary course of trade for

consumption in the comparison market. For selling expenses, we used the

weighted average home market selling expenses. There were no

adjustments to CV for differences in circumstances of sale.

United States Price (USP)

For the price to the United States, we used export price (EP) or

constructed export price (CEP) as defined in sections 772(a) and 772(b)

of the Act, as appropriate. All of the CEP sales were further

manufactured in the United States.

We calculated EP and CEP based on the packed, delivered, duty-paid

price to unaffiliated customers in the United States. We made

deductions for movement expenses (foreign inland freight, foreign

brokerage and handling, international freight, marine insurance, U.S.

inland freight, U.S. brokerage and handling, and U.S. Customs duties)

in accordance with section 772(c)(2)(A) of the Act. For EP sales, we

made deductions from the gross unit price for discounts where

applicable. We accounted for post-sale price adjustments for individual

sales (reported in the ``Other Discounts'' field) by reducing or

increasing the gross unit price, as appropriate. In accordance with

section 772(d)(1) of the Act and the Statement of Administrative Action

(SAA) (at 823-824), we calculated the CEP by deducting discounts,

selling expenses associated with economic activities occurring in the

United States, including commissions, credit expenses, and indirect

selling expenses, inventory carrying costs and repacking expenses. In

accordance with section 772(d)(2) of the Act, we also deducted the cost

of further manufacturing. Finally, we made an adjustment for an amount

of profit allocated to these expenses in accordance with section

772(d)(3) of the Act. No other adjustments to EP or CEP were claimed or

allowed.

Normal Value

Home market prices were based on the packed, ex-factory or

delivered prices to affiliated or unaffiliated customers and were

reported net of value added tax. We deducted packing and movement

expenses in accordance with sections 773(a)(6) (A) and (B) of the Act.

We made adjustments, where appropriate, for discounts, rebates and

post-sale price adjustments. In comparisons to EP and CEP sales, we

also made adjustments to NV for differences in cost attributable to

differences in physical characteristics of the merchandise pursuant to

section 773(a)(6)(C)(ii) of the Act and increased NV by U.S. packing

costs in accordance with section 773(a)(6)(A) of the Act.

As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA

at 829-831, to the extent practicable, the Department will calculate

NVs based on sales at the same level of trade as the U.S. sales. When

the Department is unable to find sales in the comparison market at the

same level of trade as the U.S. sales, the Department may compare sales

in the U.S. and foreign markets at different levels of trade. See,

also, Final Determination of Sales at Less Than Fair Value: Certain

Pasta from Italy (61 FR 30326, June 14, 1996) (Pasta from Italy).

In accordance with section 773(a)(7)(A), if sales at different

levels of trade are compared, the Department will adjust the NV to

account for the difference in level of trade if two conditions are met.

First, there must be differences between the actual selling functions

performed by the seller at the level of trade of the U.S. sale and the

level of trade of the NV sale. Second, the difference must affect price

comparability as evidenced by a pattern of consistent price differences

between sales at the different levels of trade in the market in which

NV is determined.

In its response to Section A of the questionnaire, Hoogovens stated

that it made sales in the U.S. and home markets at two distinct levels

of trade: (1) sales to end-user customers, and (2) sales to steel

service centers. In its Section B response, Hoogovens explained that it

cannot differentiate among the selling functions performed and services

offered to the different classes of home market or export price

customers during the POR. Consequently, Hoogovens could not

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meet the Department's test and did not claim a level of trade

adjustment with respect to its EP sales in this review. Hoogovens

reported these sales using the code ``1'' in the CUSTLOTH and CUSTLOTU

fields. However, Hoogovens argued that all of its home market sales

used as the basis of NV involved the performance of various selling

activities, many of which are not accounted for by the direct selling

expense adjustment to NV. Therefore, Hoogovens claimed, there is no

home market equivalent to the CEP and Hoogovens requested that the

Department make an adjustment to NV for indirect selling expenses up to

the amount of indirect selling expenses deducted from CEP. Hoogovens

reported CEP sales using the code ``2'' in the CUSTLOTU field.

During verification, the team interviewed Hoogoven's Senior Sales

Executive for Stripmill Products regarding services provided to

different categories of customers. He explained that the company

provides the same types of services to all customers in all markets.

See the public version of the verification report, p. 10. In

identifying the level of trade for CEP sales, we considered only the

selling activities reflected in the U.S. price after deduction of

expenses and profit under section 772(d) of the Act. Pursuant to

section 773(a)(1)(B)(i) of the Act, we considered the selling functions

reflected in the starting price of the home market sales before any

adjustments. Based on our analysis, we preliminarily find that no level

of trade differences exist between any sales in either the home market

or the U.S. market. Therefore, all price comparisons are at the same

level of trade, and neither an adjustment pursuant to section

773(a)(7)(A), nor a circumstances of sale adjustment in accordance with

section 773(a)(6)(C)(iii) of the Act and 19 C.F.R. 353.56, is

warranted.

Currency Conversion

For purposes of the preliminary results, we made currency

conversions based on the official exchange rates in effect on the dates

of the U.S. sales as certified by the Federal Reserve Bank of New York.

Section 773A(a) of the Act directs the Department to use a daily

exchange rate in order to convert foreign currencies into U.S. dollars,

unless the daily rate involves a ``fluctuation.'' In accordance with

the Department's practice, we have determined that a fluctuation exists

when the daily exchange rate differs from a benchmark by 2.25 percent.

The benchmark is defined as the rolling average of rates for the past

40 business days. When we determine a fluctuation existed, we

substitute the benchmark for the daily rate. However, for the

preliminary results we have not determined that a fluctuation exists,

and we have not substituted the benchmark for the daily rate.

Reimbursement

Section 353.26 of the antidumping regulations requires the

Department to deduct from the United States price the amount of any

antidumping duty that a producer or reseller either pays directly on

behalf of the importer or reimburses to the importer. Based on verified

evidence on the record in this review, the Department has preliminarily

determined that Hoogovens has agreed to reimburse Hoogovens Steel USA,

Inc. (formerly N.V.W. (USA), Inc.), the importer of record, for

antidumping duties to be assessed, and has reimbursed Hoogovens Steel

for antidumping duty cash deposits made on entries during the POR.

Therefore, the regulation applies.

Preliminary Results of the Review

As a result of this review, we preliminarily determine that the

following weighted-average dumping margin exists:

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

Margin

Manufacturer/exporter Period (percent)

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

Hoogovens Staal BV........................ 8/1/94-7/31/95 9.26

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

Parties to this proceeding may request disclosure within five days

of publication of this notice and any interested party may request a

hearing within 10 days of publication. Any hearing, if requested, will

be held 44 days after the date of publication, or the first working day

thereafter. Interested parties may submit case briefs and/or written

comments no later than 30 days after the date of publication. Rebuttal

briefs and rebuttals to written comments, limited to issues raised in

such briefs or comments, may be filed no later than 37 days after the

date of publication. The Department will publish a notice of the final

results of the administrative review, which will include the results of

its analysis of issues raised in any such written comments or at the

hearing, within 180 days from the issuance of these preliminary

results.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Individual differences

between USP and NV, taking into account reimbursed duties, may vary

from the percentage stated above. The Department will issue

appraisement instructions directly to Customs. The final results of

this review shall be the basis for the assessment of antidumping duties

on entries of merchandise covered by this review and for future

deposits of estimated duties.

The following deposit requirements will be effective upon

completion of the final results of this administrative review for all

shipments of certain cold-rolled carbon steel flat products from the

Netherlands 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)(1) of the Act and 19 CFR 353.26:

(1) the cash deposit rate for Hoogovens will be the rate established in

the final results of this administrative review; (2) if the exporter is

a firm not covered in this review, but the manufacturer is Hoogovens,

the cash deposit rate will be that established for Hoogovens in the

final results of this review; and (3) if neither the exporter nor the

manufacturer is a firm covered in this review, the cash deposit rate

will be 19.32 percent, the ``all others'' rate established after remand

in the LTFV investigation.

These deposit requirements, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act and 19 CFR 353.22.

Dated: September 27, 1996.

Barbara R. Stafford

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-25538 Filed 10-3-96; 8:45 am]

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