Certain Cut-to-Length Carbon Steel from Finland; Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-405-802]

Certain Cut-to-Length Carbon Steel from Finland; Final Results of

Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

review.

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SUMMARY: On October 4, 1996, the Department of Commerce (the

Department) published the preliminary results of its 1994-95

administrative review of the antidumping duty order on certain cut-to-

length carbon steel from Finland. The review covers one manufacturer/

exporter, Rautaruukki Oy (``Rautaruukki''), for the period August 1,

1994 through July 31, 1995. We gave interested parties an opportunity

to comment on our preliminary results. Based on our analysis of the

comments received, we have made the changes described in this notice.

EFFECTIVE DATE: April 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Jacqueline Wimbush or Linda Ludwig, Office of AD/CVD Enforcement, Group

III, Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, NW,

Washington, DC 20230; telephone (202) 482-1374 or 482-3833,

respectively.

SUPPLEMENTARY INFORMATION:

Background

On October 4, 1996, the Department published in the Federal

Register (61 FR 51901) the preliminary results of the

[[Page 18469]]

antidumping duty order on certain cut-to-length carbon steel plate from

Finland (58 FR 44165). The Department has now completed this

administrative review in accordance with section 751 of the Tariff Act.

Applicable Statute and Regulations

Unless otherwise stated, all citations to the Tariff Act of 1930,

as amended (the Tariff Act) are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the

Tariff Act by the Uruguay Round 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).

Scope of the Review

The products covered by this administrative review constitute one

``class or kind'' of merchandise: certain cut-to-length carbon steel

plate. These products include hot-rolled carbon steel universal mill

plates (i.e., flat-rolled products rolled on four faces or in a closed

box pass, of a width exceeding 150 millimeters but not exceeding 1,250

millimeters and of a thickness of not less than 4 millimeters, 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

hot-rolled carbon steel flat-rolled products in straight lengths, 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 millimeters or more in thickness and

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, 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, and

7212.50.0000. Included are flat-rolled products of 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. Excluded is grade X-70 plate. These HTS item numbers are

provided for convenience and Customs purposes. The written description

remains dispositive.

The period of review (``POR'') is August 1, 1994, through July 31,

1995. This review covers entries of certain cut-to-length carbon steel

plate by Rautaruukki.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. We received briefs and rebuttal comments from

Bethlehem Steel Corporation, U.S. Steel Group a unit of USX

Corporation, Inland Steel Industries, Inc., LTV Steel Company, Inc.,

National Steel Corporation, AK Steel Corporation, Gulf States Steel

Inc. of Alabama, Sharon Steel Corporation, and WCI Steel Inc.,

collectively petitioners, and from Rautaruukki, respondent, an exporter

of the subject merchandise. At the request of respondent, we held a

hearing on December 2, 1996.

Comment 1

The respondent argues that the Department erred by failing to

consider all subject merchandise with shipbuilding specification ``A''

as identical merchandise. Respondent states that the Department

assigned new control numbers (``CONNUMs'') to shipbuilding steel for

each specification and/or grade (``PLSPECH'') based on the national

classification society. Consequently, respondent argues that the

Department considered only the shipbuilding plate certified as ``ABA''

for sale in the Finnish home market and the U.S. market as identical

merchandise, and erroneously treated shipbuilding plate which was

certified by a different national classification society as non-

identical merchandise.

Respondent claims that its customers sometimes demand that

identical merchandise be certified in accordance with the

specifications of the national classification society of the country in

which the product will be used. As a result of this, respondent states

that it reported multiple PLSPECH codes for the same CONNUM. Respondent

argues that the administrative record shows that merchandise

manufactured to the ``A'' specification is identical regardless of

national classification society certification. Respondent alleges that

it gave the Department a table of identical and most similar

merchandise which demonstrated that the physical characteristics,

including chemistry, delivery condition, elongation, yield strength and

tensile strength are identical for all shipbuilding plate with the

``A'' specification (see Exhibit SUPP-17, dated December 6, 1996, as

part of Rautaruukki's response to the Department's supplemental

questionnaire). Respondent notes that it provided the Department with

mill certificates for various shipbuilding (``A'') specifications,

which indicated that the chemical and physical properties are the same

for shipbuilding steel with the ``A'' specification, and the steel from

the same cast or heat was used to meet orders of shipbuilding plate

sold to two different classification society certifications.

Respondent claims that the Department has acknowledged that all

``A'' specification shipbuilding plate are identical products.

Respondent cites the Department's verification report which states:

``We examined mill certificates for products which have identical

physical characteristics but were sold to different countries with

different specifications: It is clear that the products were identical

based on physical characteristics.''

Respondent also contends that the Department has improperly changed

its model-match program from the previous administrative review.

Respondent notes that in the first review, the Department assigned

identical designated values for PLSPECHs which represented subject

merchandise manufactured to the ``A'' specification of shipbuilding

steels. Respondent states that in the first administrative review, the

Department recognized that these products are identical products with

the same chemical and physical characteristics.

Respondent argues that an administrative agency must either follow

existing decisions and precedents or else explain its deviation, citing

Citrosuco Paulista, S.A. v. United States, 12 CIT 1196, 1209, 704 F.

Supp. 1075, 1088 (1988). Respondent argues that the Department should

have either conformed to, or explained the reasons for its departure

from, its prior determination. Respondent claims that no new facts were

presented that supported a different conclusion than that reached in

the prior administrative review, citing Shikoku Chemicals Corp. v.

United States, 16 CIT 382, 795 F. Supp. 417, 421 (1992).

Respondent argues that the Department never asked for information

explaining in greater detail its product code system nor did it ever

notify Rautaruukki regarding any change in the review. Thus,

Rautaruukki claims that it was never given an opportunity to supplement

or clarify the record or change its existing reporting methodology,

citing SKF USA Inc. v. United States, 888 F. Supp. 152 (CIT

[[Page 18470]]

1995). Respondent also cites Bowe-Passat v. United States, 17 CIT 335,

343 (1993), in which its states that the Department sent out a general

questionnaire and a brief deficiency letter, without disclosing other

deficiencies unspecified in the letter until after ``it was too late,

i.e., after preliminary determination.''

Petitioners contend that if Rautaruukki's PLSPEC matching hierarchy

was accepted as accurate by the Department, the Department would be

faced with insurmountable obstacles that would prevent it from

correcting Rautaruukki's CONNUM and PLSPEC data. Petitioners argue that

acceptance of Rautaruukki's ``explanation'' would necessitate the

collapsing and ``splitting'' of CONNUMs, which the Department should

not and could not do. Petitioners claim that Rautaruukki's PLSPEC

matching hierarchy indicates some specifications with a given CONNUM to

be identical to the PLSPEC sold in the U.S., some to be ``similar'' to

that PLSPEC, and that separate CONNUMs should have been created for

other PLSPECs.

Petitioners contend that Rautaruukki's database would have to be

reconfigured before it could be used if Rautaruukki's submitted PLSPEC

matching hierarchy were deemed accurate and dispositive. Petitioners

note that it is not the Department's responsibility to make such

changes, citing Neuweg Ferrigung GmbH v. United States, 797 F. Supp.

1020, 1023-24 (CIT. 1992). Petitioners argue that the Department's

acceptance of Rautaruukki's matching hierarchy would necessarily render

its sales and cost databases unusable for purposes of the sales-below-

cost test, because Rautaruukki's reported matching hierarchy only

identifies a limited number of PLSPECs. Thus, the Department would be

preluded from reconfiguring the vast majority of Rautaruukki's

database.

Petitioners argue that it would be impossible for the Department to

correct Rautaruukki's PLSPEC and CONNUM information. Petitioners claim

that the ramifications of the Department's inability to correct

Rautaruukki's submitted data would affect the Department's analysis at

a most fundamental level. Petitioners argue that (1) the creation of

new CONNUMs would require correcting the corresponding model-specific

cost information, by creating new costs for newly collapsed and split

CONNUMs; and (2) that the Department's inability to correct

Rautaruukki's CONNUMs prevents it from performing its sales-below-cost

test. Petitioners argue that the Department's acceptance of

Rautaruukki's matching hierarchy would necessarily render its sales and

cost databases unusable for purposes of the arm's-length test.

Petitioners claim that the fact that the arm's-length test cannot be

performed is of great significance given the number of sales in the

home market that were made to affiliated parties.

Petitioners argue that Rautaruukki's attempts in its case brief to

focus the Department's attention on its treatment of four PLSPEC

designations, and two CONNUMs under which these PLSPECs are reported in

the home market database overlook the deficiencies throughout

Rautaruukki's database. Petitioner argue that such a decision would set

a terrible precedent, and that the respondent would only need to ensure

that it report correctly certain home market sales that it predicted

would match to U.S. sales, and not bother ensuring that the rest of its

submitted information was correct. Petitioners state that the

Department gave Rautaruukki notice of the problems inherent in its data

and an opportunity to correct or clarify this information.

Petitioners argue that the statute does not, and cannot

legitimately be read to, require notification of data deficiencies or

failures where the department could not know the extent or particulars

of the problem until verification. Petitioners state that if the

Department were not allowed to reject unreliable, inaccurate, or

incomplete information provided by the respondents and discovered at

verification, the very basis of the Department's statutory authority

would be negated, citing Sweaters Wholly or in Chief Weight of Man-Made

Fiber from Taiwan, 55 FR 34,587 (Aug. 23, 1990) (Final Determination of

Sales at Less Than Fair Value); and Silicon Metal from Brazil, 59 FR

42,806, 42,812 (Aug. 19, 1994) (Final Results of Antidumping Duty

Review). To do otherwise, in petitioner's view, would require either

the acceptance of unverified information or additional verification by

the Department. Petitioners claim that the major deficiencies in

Rautaruukki's data base were discovered and raised by the Department at

the earliest opportunity at verification, and the department had no

opportunity or reason to inquire into these issues prior to

verification. Petitioners argue that Rautaruukki should have been aware

of the deficiencies in its data base prior to verification and has had

every opportunity to clarify or correct its submitted information.

Petitioners state that in the original questionnaire, the Department

provided clear instructions for providing specification/grade

information, emphasized the importance of the specification/grade

classification, and gave Rautaruukki every opportunity to request

guidance from the Department regarding the assignment of specification

or grade information.

Petitioners argue that Rautaruukki never requested guidance from

the Department, and that the Department issued a lengthy supplemental

questionnaire in this case, which requested clarification of

Rautaruukki's PLSPEC and CONNUM assignments. Petitioners argue that

Rautaruukki's claims in this regard are without merit and should be

rejected by the Department.

Department's Position

We agree in part with petitioners. Under the Department's

methodology for assigning CONNUMs, each product, based on the

Department's model match criteria, should be assigned its own unique

CONNUM. Based on these criteria, there should not be more than one

PLSPEC in any CONNUM because different specifications have different

physical, mechanical or chemical requirements. Respondent has not

assigned its CONNUMs consistent with the Department's model match

criteria. In certain instances, respondent reported within the same

CONNUM shipbuilding ``A'' specifications, as well as non-shipbuilding

specifications. In the Department's preliminary results, we created new

CONNUMs for each of the shipbuilding ``A'' specifications identical or

most similar to the U.S. sales. this is a change from the prior review

in which this issue did not come to the Department's attention.

We relied on respondent's model match hierarchy, which indicates

that all shipbuilding ``A'' PLSPECs are identical, to weight the

physical characteristics for matching purposes. However, the statement

in the Department's verification report, that ``based on the mill

certificates it is clear that the products were identical based on

physical characteristics,'' referred only to the fact that products are

physically identical with respect to certain characteristics analyzed

by the Department, and not that the specifications that they are

meeting are identical. The PLSPEC variable is intended to identify the

differences in the specification to which the product is sold. Prices

can vary based on the specifications to which the product is sold, even

though the product is physically identical. It is inconsistent with the

Department's model matching criteria in this case to consider products

sold to different specifications as identical for margin calculation

[[Page 18471]]

purposes. We assigned one weight to ``ABA'', the only PLSPEC sold in

the United States. Since all other ``A'' grade shipbuilding

specifications possess different requirement from ``ABA'' but

essentially are the same product, we treated them as the next most

similar product, as we had no basis to distinguish among these PLSPECs

from respondent's model match hierarchy. All U.S. sales were matched to

shipbuilding ``A'' specification material.

While the Department did not specifically request respondent to

revise its CONNUMs, we did ask Rautaruukki to explain in detail how

each reported product characteristic was determined and assigned to

sales of subject merchandise. Respondent never explained why it

combined PLSPECs in CONNUMs as it did. Nor did Rautaruukki ask the

Department to consider modifying its methodology to allow Rautaruukki

to report CONNUMs as it did. We agree with petitioners that respondent

has likely incorrectly assigned CONNUMs throughout the data base. The

Department was able to and has revised the data base where it was

necessary to do so for purpose of the margin calculation.

This effort by the Department does not impair our ability to

perform the cost test in this review. As explained in Comment 3, we are

using facts available and assigning a single cost for all CONNUMs. (See

Comment 3, below.) Consequently, we are able to perform the cost test

without obtaining additional cost data from Rautaruukki, and have done

so for these final results.

With respect to the arm's length test, we are already using facts

available as NV for all U.S. sales matching to these sales, making this

issue moot.

Comment 2

Respondent argues that the Department has erred by comparing normal

cut-to-length carbon steel plate sold to the U.S. market with the wide

flats and beveled plate sold in the home market because these products

are not identical or similar. Respondent asserts that the United States

Customs Service has issued a number of definitional rulings concerning

the classification of ``wide flats'' under the Harmonized Tariff

Schedule of the United States (1996) (``HTSUS''). Respondent claims

that these rulings indicate that ``wide flats'' are considered to be

parts of steel structures and, therefore, classifiable under heading

7308 of the HTSUS. See, e.g., Headquarter Ruling 088116 (Feb. 27,

1991); Headquarters Ruling 084532 (July 14, 1989).

Respondent claims that beveled plate and wide flats are structural

steel products which require separate handling on a different product

line, and that the raw material for both is basic cut-to-length plate.

Respondent claims that the Department was provided extensive

information about the different and additional cost associated with

both products, as well as the additional processes which are necessary

to produce these products. Respondent claims that the Department has

verified that wide flats and beveled products require additional

processing, and that the Department erred in comparing sales of these

products with those of normal plate. Respondent states that it assigned

distinct CONNUMs to beveled plate and to wide flats although they may

have the same physical characteristics as basic cut-to-length plate,

because they are manufactured by different processes and have different

end uses.

Petitioners claim that Rautaruukki's arguments regarding the

Department's treatment of beveled and wide flat products are without

merit. Petitioners argue that Rautaruukki raised the same arguments in

the first administrative review regarding beveled plate products and

the Department rejected them. Petitioners state that the Department

correctly determined in the first administrative review that

Rautaruukki failed to establish the relevance of the beveling as a

product matching criteria, and that ``beveled plate does not possess

physical characteristics which make it unique from non-beveled plate

with regards to applications and uses,'' citing Certain Cut-to-Length

Carbon Steel Plate from Finland, 61 FR 2792, 2795 (Jan. 29, 1996)

(Final Results of Antidumping Duty Administrative Review). Petitioners

also note that in response to a letter from the Department to

interested parties on model match prior to the first administrative

review, Rautaruukki commented on several issues, but did not mention

the treatment of beveled plate or wide flat products in any regard.

Petitioners argue that nothing has changed with respect to this

issue in the second review, and the Rautaruukki has not established on

the record the relevance of beveling or wide flats as product matching

criteria. Petitioners argue that Rautaruukki has simply ignored the

Department's hierarchy and attempted to create its own and, therefore,

the Department has correctly determined that neither beveled plate nor

wide flat products possess any physical characteristics that set them

apart from non-beveled or non-wide flats plate products.

Department's Position

We agree with petitioners. The Department issued clear instructions

on how to construct CONNUMs. Whether or not subject merchandise is

beveled or wide flat is not a model match criterion. Rautaruukki never

explained that it had modified the Department's model match criteria or

why it had done so. Rautaruukki did not ask the Department to consider

modifying the model match criteria. As petitioners correctly note,

respondent cannot modify the Department's model match criteria on its

own initiative. The Department agrees with the petitioners that

respondent did not submit any information on the record to establish

the revelance of beveling and wide flats as a product matching

criterion, nor did respondent provide information to demonstrate that

the beveled and wide flats plate possess physical characteristics to

make them unique from the non-beveled or non-wide flats with regard to

applications and uses. Therefore, the Department continues to consider

these products identical to other subject merchandise. With respect to

the cited Customs Rulings, Rautaruukki did not provide any information

on the record to suggest that wide flats are not subject merchandise.

For the preliminary results, the Department modified Rautaruukki's

submitted CONNUMs for the products identical or most similar to the

U.S. sales to combine beveled, wide flat and other plate into a single

CONNUM. We have not changed this for these final results.

We used facts available as NV for U.S. sales matching to home

market CONNUMs that included beveled or wide flat sales as we were

unable to verify cost for beveled or wide flat products. We have

identified additional CONNUMs as containing beveled or wide flat

material for these final results. See Comment 3 below.

Comment 3

Petitioners argue that the Department should reject Rautaruukki's

submitted cost information and resort to total facts available. While

petitioners support the Department's determination in the preliminary

results that the cost data for beveled and wide flat products could not

be verified, they claim that the Department erred by failing to

recognize that other significant cost information reported by

Rautaruukki could not be verified.

In petitioners' view, the product-specific cost information

submitted by Rautaruukki (the ``cost extras'') could not be verified.

Petitioners state that

[[Page 18472]]

Rautaruukki's reported COP/CV values are derived from a two-step

calculation: A single weighted-average base cost for all plate

products; and an adjustment to that weighted-average cost to account

for dimensional cost extras and quality cost extras. Petitioners argue

that these two cost extras could not be verified. Petitioners claim

that these cost extras are a significant portion of Rautaruukki's total

cost and the only product-specific element of the submitted product

costs.

According to petitioners, Rautaruukki failed to provide accurate or

relevant source documentation for the cost extras at verification, and

the documentation provided by Rautaruukki at verification was

insufficient to demonstrate that its reported costs were accurate,

reliable, or related to the period of review. Petitioners state that

the Department's verification agenda states that complete supporting

documentation should be available for selected CONNUMs. It is argued by

petitioners that Rautaruukki did not provide the requisite information

as it pertains to the product-specific cost extras identified above.

Petitioners cite the Department's cost verification report, at 4, which

states that ``Rautaruukki representatives indicated to the Department

at verification that they do not maintain a log or any documentation

which identifies product-specific cost changes from one period to

another.'' Petitioners claim that Rautaruukki did not maintain crucial

supporting documentation that was required to verify the accuracy of

its reported cost extras.

Petitioners question the relevance or accuracy of Rautaruukki's on-

line computer system as a source document to verify cost extras.

Petitioners note that Rautaruukki employs a continuously updated

computer cost system (i.e., the product-specific costs the Department

reviewed at verification were the costs relevant to the time of

verification, and were not the costs in effect during the period of

review, nor were they the costs in effect at the time the questionnaire

response was prepared). Petitioners hold that reliance on such a

computer system in the course of a verification does not meet a

``reasonable standard'' incumbent upon the Department. (See Micron

Technology, Inc. v. United States, 893 F. Supp. 21, 39 (CIT 1995) and

Hercules, Inc. v. United States, 673 F. Supp. 454, 469 (CIT 1987).) At

the hearing, petitioners clarified that their objection to an on-line,

live system is not the lack of a print-out, but the absence of ties to

financial statements.

Petitioners state that Rautaruukki also showed the Department a

cost extras book published in July 1995 to verify cost extras.

Petitioners note that the book was published at the end of the POR and

there is no evidence on the record indicating that the values of the

extras in the book were related to the POR. Petitioners also question

whether the cost extras book is a reference for costs of production for

particular extras or whether the book is used to determine the charges

to be paid by customers for particular extras.

Petitioners allege that when the Department attempted to verify

these cost extras, it was unable to tie the cost extras values reported

by respondent to source documentation and that when compared to the

documentation that did exist, numerous errors were uncovered.

Petitioners note that of 48 cost extras examined at verification, 38

percent of the cost extras had been misreported.

Petitioners argue that in situations where respondent has failed to

retain and failed to provide the necessary supporting documentation for

such key components of the cost data set, the respondent is said to

have failed verification, and the Department should therefore apply

total facts available, citing Grain Oriented Electrical Sheet Steel

from Italy (59 FR 33952, (July 1, 1994)); Certain Cut-to-Length Carbon

Steel Flat Products from Sweden (61 FR 51,898, 51,899, (Oct. 4, 1996))

(Flat Products from Sweden). Petitioners note that in Flat Products

from Sweden, the Department applied total facts available because the

respondent was unable to reconcile its submitted cost data to its

normal accounting books and records and was unable to demonstrate that

the submitted COP/CV data was based on the company's actual production

experience. Like respondent in Flat Products from Sweden, in

petitioners view, Rautaruukki did not provide documentation at

verification that could demonstrate that the submitted COP/CV data was

based on the company's actual production experience.

Rautaruukki contends that the Department conducted a

``comprehensive and proper cost verification'' and that the Department

confirmed that the cost information submitted by Rautaruukki was based

on Rautaruukki's normal accounting and financial records. Moreover,

Rautaruukki claims that the Department verified Rautaruukki's reported

base cost figures for allocation of indirect costs to direct cost

centers, maintenance expenses, by-product and scrap allocations, cost

of manufacturing, selling, general and administrative expenses, and

reported per-unit costs. Respondent asserts that no discrepancies were

noted in the course of verifying these items.

Rautaruukki distinguishes this case from Flat Products from Sweden

by arguing that in that case the Department found that the respondent

had based its AD response on a special system which was not used as

part of the respondent's normal accounting system. Rautaruukki claims

that the Department found that its submitted cost information was based

both on its normal accounting books and records and on its actual

production experience.

Rautaruukki notes that the values for quality extras were taken

from data in its on-line computer system, which is constantly updated

to reflect changes in costs so that Rautaruukki can make the

corresponding changes in its prices. Respondent states that it ``does

not maintain a log of the changes in extras costs from one period to

another.'' Rautaruukki admits that the Department found at verification

that some quality extras values were different from those reported by

Rautaruukki, but attributed these differences to the system being

updated since Rautaruukki had prepared its questionnaire response.

Respondent claims that these differences were slight, about one or two

FIM per cost extra. In response to a question at the hearing,

Rautaruukki explained that the extras cost book is in fact a cost book,

not a price extras book. In some cases, respondent noted that the

discrepancies in cost extras were positive and in other cases

negatives.

Department's Position

We agree, in part, with both parties. We agree with respondent that

the Department was able to tie Rautaruukki's base costs to appropriate

financial and accounting documentation. This represents by far the

largest portion of Rautaruukki's total cost.

We agree with petitioners that the Department was unable to tie

Rautaruukki's extras costs to supporting documentation at verification.

With respect to beveled and wide flat products, as we stated in our

preliminary results, the use of facts available is appropriate because

the Department was unable to verify Rautaruukki's total COP data. This

was because Rautaruukki made no attempt to provide supporting

documentation with respect to its cost extras, simply indicating that

these extras could not be verified.

Rautaruukki did provide some documentation to support its cost

extras submission with respect to other products. This documentation

consisted of its on-line computer system and a

[[Page 18473]]

cost extras book. However, neither of these sources was for the POR--

the on-line system was current as of the date of verification and the

cost extras book was prepared at the end of the POR, with no indication

as to the period for which the costs in the book were in effect. As

stated in the Department's cost verification report concerning a

particular CONNUM, ``in reviewing the extras costs associated with this

product, we could not verify the accuracy of the reported cost for (a

particular plate extra) * * *. Respondents were unable to provide

documentation indicating that the figure was correct when the material

was manufactured or when the response was prepared.''

At verification, we did compare 48 different reported cost extras

to the costs listed in the cost extra book. Of these, there were

discrepancies for 16, or 38 percent. The differences were extremely

small, usually only one or two FIM. For all of the home market products

that were matched to U.S. sales, the reported cost extras represented a

small percentage of total cost. No documentation was provided to link

either the cost extra book or the on-line computer system into

Rautaruukki's audited financial accounting system.

Because of Rautaruukki's failure to report properly extra cost data

based on the POR, failure to retain the data that it did use to prepare

its questionnaire response, and the failure of Rautaruukki to provide

documentation linking the reported extras costs with accounting and

financial documentation, the Department has determined to use facts

available for Rautaruukki's reported extras costs.

However, the Department disagrees with petitioners' suggestion that

it apply total facts available in this review. The cases cited by

petitioners, Grain Oriented Electrical Sheet Steel from Italy and Flat

Products from Sweden, differ from this case. In both of those cases,

the Department was unable to verify numerous and fundamental aspects of

the respondents' responses. In this case, however, the significant

problems encountered at verification were limited to cost extras. Base

costs--the primary component of cost--were fully verified. The observed

discrepancies with respect to cost extras for products other than wide

flats and beveled plate were extremely small, and for the home market

products used to match to U.S. sales, reported cost extras represented

a small portion of total cost. As a result, rather than resort to total

adverse facts available for these products, as advocated by

petitioners, for products other than wide flats and beveled plate we

are using facts available only for the cost extras in the calculation

of COP and CV. As facts available, we are using the highest reported

cost extras for products that are not beveled or wide flat. Due to the

significant difference in cost between painted and non-painted

products, we have also separately identified the highest reported extra

costs for painted and non-painted plate. In calculating difference of

merchandise (difmer) adjustments, we have assigned a difmer of zero to

shipbuilding specification ``A'' material that same cost as the U.S.

product.

For wide flats and beveled products, Rautaruukki made no attempt to

provide information to verify its reported extras data. Indeed

Rautaruukki admitted that this information could not be verified. As

stated in the cost verification report: We also noted that the costs

reported for wide flats and beveled material are incorrect. The report

goes on to state that this failure to correctly report the extras cost

of these products rendered moot our attempt to verify the costs.

(Department's Cost Verification report at 4.) We are continuing to use

facts available as NV for U.S. sales matching to CONNUMs including wide

flats and beveled plate as we did in the preliminary results.

We also note that respondent improperly reported COP and CV data

for two separate periods, 1994 and seven months of 1995, rather than

report a single weighted average COP/CV for the entire POR. Respondent

also improperly included data for all of calendar year 1994 in its COP/

CV data, rather than limiting the data used to the months of the POR.

For the final results of this review, we are weight averaging

respondent's submitted data, with the modifications noted above.

Comment 4

Petitioners argue that the Department is compelled to reject

Rautaruukki's submitted sales information and resort to total facts

available. Petitioners claim that respondent has offered three

inconsistent and mutually exclusive explanations of how it assigned

PLSPEC and CONNUM codes to its various products:

That whenever multiple PLSPECs are assigned to a

particular CONNUM, those PLSPECs are identical to one another because

they merely reflect various countries' designations of the same

specification/grade;

That respondent's PLSPEC codes each reflect different

specification and grades; and

That the various PLSPECs within a given CONNUM in some

cases are identical to one another, in other cases are only similar

(although not identical), and in still other cases are dissimilar.

Petitioners argue that the submitted sales information should be

rejected because: (1) The PLSPEC and CONNUM codes are critical to the

Department's dumping analysis; (2) the Department has no basis for

selecting among Rautaruukki's various inconsistent explanations of

these codes; and (3) the Department is unable to correct Rautaruukki's

data. Petitioners argue that the assignment of PLSPEC and CONNUM codes

directly affects almost every critical element of the Department's

analysis of the existence and magnitude of dumping, including

attribution and allocation of costs, model match, and application of

the arm's length test.

Petitioners summarize the record evidence in support of each of the

three explanations which it believes respondent has offered.

Petitioners offer various cites to the record in support of the first

proposition that certain different PLSPEC designations included within

a single CONNUM are in fact identical and that respondent merely

assigned different PLSPECs to reflect the nomenclature of different

international standards for identical products. Petitioners claim that

the Department verified that these PLSPECs are identical. In support of

the second proposition, petitioners cite the cost verification report,

which they claim indicated that respondent separately tracked and

recorded costs for certain PLSPECs within the same CONNUM. Petitioners

also reference the sales verification report which states that

``Rautaruukki has correctly assigned different PLSPEC codes to

different specifications and grades. The specifications and grades are,

indeed, different* * *.'' Petitioners also cite respondent's submitted

model match hierarchy in support of their third proposition, that some

PLSPECs under a CONNUM are identical, while others only similar and

others are not even similar.

Petitioners argue the quantum of evidence of the record and the

number of statements made by Rautaruukki consistent with each of the

alternatives is roughly equivalent, and Rautaruukki has supported each

of its claims with documentation, and in two of the three instances,

the Department purportedly confirmed this information at verification.

Petitioners argue that if the Department were to accept the first

claim, that all PLSPECs under a single CONNUM are identical, the

Department would have to collapse PLSPECs within

[[Page 18474]]

a CONNUM, and also collapse PLSPECs that are identical to each other

but are assigned different CONNUMs throughout the entire database.

Petitioners claim that this would entail extraordinarily complex

computer programming and the Department could not be certain of making

all the necessary corrections. Petitioners also note that if this claim

were accepted, the Department would have to correct all corresponding

cost information and revisit the issue of downstream sales. Petitioners

also argue that the Department would have to reject Rautaruukki's

submitted model match hierarchy and, as a result, would be precluded

from performing the model match.

Petitioners argue that if the Department were to accept the second

claim that all reported PLSPECs are different, the Department would

have to split all the CONNUMs that contain multiple PLSPECs and

determine the correct cost for each new CONNUM. However, in

petitioners' view, the Department has no basis upon which to apportion

the COP/CV of the original CONNUM to the newly-created CONNUMs.

Petitioners claim that under this scenario the Department again would

have to reject Rautaruukki's submitted model match hierarchy and, as a

result, would be precluded from performing the model match.

Petitioners claim that if the Department were to accept

Rautaruukki's third claim that some PLSPECS reported under a CONNUM are

identical, while others are only similar and others are not similar at

all, then the Department would have to collapse the PLSPECs listed in

the model match hierarchy as identical and separate all of the non-

identical PLSPECs listed under the same CONNUM. Petitioners also claim

that the Department would have to correct the corresponding cost

information. However, petitioners noted that the model match hierarchy

does not list all PLSPECs and they argue the Department would be

precluded from running the arm's length test.

Respondent alleges that it provided the Department with a

consistent, accurate and verified explanation of its assignment of

CONNUMs and PLSPECs in this administrative review. Respondent asserts

that petitioners' claims are contradicted by the record, including the

Department's verification of the methodology and accuracy of

Rautaruukki's assignment of CONNUMs and PLSPECs. Respondent states that

PLSPECs may be identical, similar or different.

Citing the Department's analysis memorandum, respondent claims that

in performing the model match, the Department first identified home

market sales with the same CONNUM as the U.S. sales and, then matched

identical PLSPECs within that CONNUM. Respondent asserts that it has

assigned separate PLSPEC codes to separate specifications or grades.

Respondent notes that in some cases, these PLSPEC codes identify

identical products, but the codes are different to reflect the national

specification or classification standard to which the product was

certified. Rautaruukki claims that it clearly identified the PLSPEC

codes which it used, and the Department verified that information.

Respondent also states that it assigned different CONNUMs to

products with the same physical characteristics when those products

fell into different product groups which are manufactured by different

processes and have different end uses. Respondent contends that the

Department verified that some of these products, including wide flats

and beveled plate, require additional processing.

Respondent notes that the record establishes that:

The same CONNUM may have included two or more PLSPECs.

There are some PLSPECs within a CONNUM which define identical products

(e.g., the PLSPECs assigned to the certifications of shipbuilding plate

``A'' by the various national classification societies), while other

PLSPECs define similar or different products.

Different CONNUMs reflect different product groups with

the same physical characteristics, i.e., normal cut-to-length plate,

wide flats, and beveled plate.

Individual PLSPECs represent separate specification or

grade codes.

Respondent claims that petitioners attempt to construct a dilemma

where none exists, and that Rautaruukki's ``explanations'' are not

inconsistent and certainly not mutually exclusive.

Department's Position

We disagree with petitioners that Rautaruukki has offered three

inconsistent and mutually-exclusive explanations of how it assigned

PLSPEC and CONNUM codes and that the Department has no basis for

choosing among these explanations. We believe that the third

explanation cited by petitioners--that in some instances PLSPECs are

identical, in other instances they are similar, and in other instances

they are not similar--is consistent with the information submitted on

the record. The ``evidence'' which petitioners cite in support of the

other two explanations is not global in nature. For example, statements

cited by petitioners in support of the first explanation--that whenever

multiple PLSPECs are assigned to a particular CONNUM, those PLSPECs are

identical to one another because they merely reflect various countries'

designations of the same specification/grades--are referring to

shipbuilding specifications only. Similarly, none of the information

referenced by petitioners regarding the second explanation--that PLSPEC

codes each reflect different specification and grades--indicates that

this is true of all PLSPECs. Thus, we find that Rautaruukki's

explanations regarding PLSPECs are consistent.

This does not mean that we find that Rautaruukki has correctly

assigned CONNUMs. As indicated in response to Comment 1, we do not

agree that all shipbuilding ``A'' PLSPECs should be combined in a

single CONNUM. We are continuing to make the changes to Rautaruukki's

data base with respect to the reconfiguration of CONNUMs that were made

in the preliminary results. Petitioners' concerns with respect to cost

data, the sales-below-cost test and the arm's length test have been

addressed in Comment 1.

Comment 5

Petitioners state that Rautaruukki has compelled the Department to

use adverse total facts available, because Rautaruukki failed to

provide the Department with a response that is consistent; an

explanation of how Rautaruukki's response was prepared; and the

necessary information needed to verify the submitted cost information.

Petitioners argue that under the terms of the statute, the

Department is compelled to reject Rautaruukki's responses, and resort

to total facts available. Petitioners note that 19 U.S.C.

1677e(a)(1995) provides that if:

(1) Necessary information is not available on the record, or

(2) an interested party or any other person--

(A) withholds information that has been requested by the

administering authority . . .,

(B) fails to provide such information by the deadlines for

submission of the information or in the form and manner requested .

. .,

(C) significantly impedes a proceeding under this subtitle, or

(D) provides such information but the information cannot be

verified . . ., the administering authority and the Commission shall

. . . use the facts otherwise available in reaching the applicable

determination under this subtitle.

[[Page 18475]]

Petitioners contend that the statute provides that any one of the

above five scenarios requires the Department to reject Rautaruukki's

responses and resort to facts available. Petitioners allege that

despite repeated requests by the Department, Rautaruukki did not

provide adequate information by which the Department could verify its

reported cost information, and it did not provide the Department with a

consistent and reliable explanation of how the company assigned PLSPEC

and CONNUM codes to its various products. Petitioners state that

section 1677m of the statute provides that the Department may still

rely on submitted information that fails to meet the above criteria in

certain circumstances which in petitioners' view have not been

satisfied by Rautaruukki. Petitioners claim that the Department has

complied with the statutory notice requirements necessary to reject

Rautaruukki's deficient submissions.

Petitioners state that section 1677m (d) of the statute requires

that, upon receiving a deficient submission, the Department is to,

``promptly inform * * * respondent of the nature of the deficiency and

shall, to the extent practicable, provide that person with an

opportunity to remedy or explain the deficiency in light of the time

limits established for the completion of * * * reviews.'' Petitioners

argue that in addition to its original questionnaire, the Department

issued a lengthy supplemental questionnaire in the case, which

specifically requested clarification of Rautaruukki's PLSPEC and CONNUM

assignments, as well as its submitted cost information, including cost

``extras.''

Petitioners state that section 1677e(b) of the statute provides

that if a respondent fails ``to cooperate by not acting to the best of

its ability to comply with * * * the Department's request for

information, * * * the Department in reaching its determination may use

an inference that is adverse to the interests of that party in

selecting from among the facts otherwise available.'' Petitioners claim

that Rautaruukki has not acted to the best of its ability to comply

with the Department's instructions in this review; therefore, the

Department should use an adverse inference when applying facts

available. Petitioners assert that the Department should apply the

highest rate from any prior segment of this proceeding--32.80 percent.

Respondent claims that it provided the necessary information

requested by the Department during this administrative review. In

Rautaruukki's view, its cooperation is confirmed by the record.

Respondent argues that it provided information which was within its

corporate control and sought information from other companies as well

as the Government of Finland. Respondent states that it was fully

cooperative and responsive during the sales and cost verifications by

the Department, which extended over a period of ten days. Rautaruukki

claims it responded fully and promptly to the Department's requests,

and it assigned sufficient and appropriate personnel to insure the

orderly and accurate progression of the verification. Respondent argues

that the Department confirmed that the information submitted by

Rautaruukki was accurate, complete and verifiable through its testing

of Rautaruukki's responses against the company's normal accounting and

financial records, and that the Department reconciled Rautaruukki's

response to those records.

Department's Position

As indicated in previous comments, we disagree with petitioners

that the Department should reject Rautaruukki's responses, and apply

adverse total facts available. We are making the adjustments to

Rautaruukki's submitted data described above and using this data to

calculate Rautaruukki's antidumping duty margin. As the Department

finds that the use of total facts available is not appropriate, the

issue of whether or not we should apply adverse facts available is

moot.

Final Results of Review

As a result of our review, we determine that the following

weighted-average margin exists:

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

Period of Margin

Manufacturer/exporter review (percent)

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

Rautaruukki Oy............................. 8/1/94-7/31/95 24.95

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

The Department shall determine, and the Customers Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between export price and normal value may vary from the

percentage stated above. The Department will issue appraisement

instructions directly to the Customs Service.

Furthermore, the following deposit requirements will be effective

upon publication of this notice of final results of review for all

shipments of certain cut-to-length carbon steel plate from Finland

within the scope of the order entered, or withdrawn from warehouse, for

consumption on or after the publication date, as provided by section

751(a) of the Tariff Act: (1) The cash deposit rate for the reviewed

company will be the rate listed above; (2) for previously reviewed or

investigated companies not listed above, the rate will continue to be

the company-specific rate published for the most recent period; (3) if

the exporter is not a firm covered in this review, a prior review, or

the original less-than-fair-value (LTFV) investigation, but the

manufacturer is, the cash deposit rate will be the rate established for

the most recent period for the manufacturer of the merchandise; and (4)

for cash deposit for all other manufacturers or exporters will continue

to be 32.80 percent, the ``all others'' rate established in the LTFV

investigation. See Antidumping Duty Order: Certain Cut-to-Length Carbon

Steel Plate from Finland, 58 FR 44165 (August 19, 1993). These

requirements, when imposed, shall remain in effect until publication of

the final results of the next administrative review.

This notice serves as a preliminary reminder to importers of their

responsibility under 19 CFR 353.26 to file a certificate regarding the

reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d). Timely written notification of

return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulations and the terms of an APO is a sanctionable violation.

This administrative review and notice are published in accordance

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

Dated: April 2, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-9426 Filed 4-14-97; 8:45 am]

BILLING CODE 3510-DS-M