[Federal Register: June 3, 1998 (Volume 63, Number 106)]
[Notices]
[Page 30185-30194]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-427-811]
Certain Stainless Steel Wire Rods From France: 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 January 26, 1998, the Department of Commerce (the
Department) published the preliminary results of the third
administrative review of the antidumping duty order on certain
stainless steel wire rods from France. This review covers Imphy S.A.
and Ugine-Savoie, two manufacturers/exporters of the subject
merchandise to the United States. The period of review (POR) is January
1, 1996 through December 31, 1996. We gave interested parties an
opportunity to comment on our preliminary results. Based on our
analysis of the comments received, we have changed the results from
those presented in the preliminary results of review.
EFFECTIVE DATE: June 3, 1998.
FOR FURTHER INFORMATION CONTACT: Robert Bolling or Stephen Jacques, AD/
CVD Enforcement Group III, Office 9, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, DC 20230; telephone:
(202) 482-3434 or (202) 482-1391, respectively.
SUPPLEMENTARY INFORMATION
The Applicable Statute
    Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to 19 C.F.R. Part 353 (1997).
Background
    On January 26, 1998, the Department published in the Federal
Register the preliminary results of the third administrative review of
the antidumping duty order on certain stainless steel wire rods from
France (63 FR 3704, January 26, 1998). The Department has now completed
this administrative review in accordance with section 751 of the Act.
Scope of the Review
    The products covered by this administrative review are certain
stainless steel wire rod (SSWR) products which are hot-rolled or hot-
rolled annealed, and/or pickled rounds, squares, octagons, hexagons, or
other shapes, in coils. SSWR are made of alloy steels containing, by
weight, 1.2 percent or less of carbon and 10.5 percent or more of
chromium, with or without other elements. These products are only
manufactured by hot-rolling, are normally sold in coiled form, and are
of solid cross section. The majority of SSWR sold in the United States
is round in cross-sectional shape, annealed, and pickled. The most
common size is 5.5 millimeters in diameter.
    The SSWR subject to this review is currently classifiable under
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0020, 7221.00.0030,
7221.00.0040, 7221.00.0045, 7221.00.0060, 7221.00.0075, and
7221.00.0080 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and Customs purposes, our written description of the scope of the order
is dispositive.
Analysis of Comments Received
    We gave interested parties an opportunity to comment on the
preliminary results. We received comments and rebuttal comments from
Imphy S.A. and Ugine-Savoie, manufacturers/exporters of the subject
merchandise (respondents), and from Al Tech Specialty Steel Corp.,
Armco Stainless & Alloy Products, Carpenter Technology Corp., Republic
Engineered Steels, Talley Metals Technology, Inc., and United
Steelworkers of America, AFL-CIO/CLC (petitioners).
    Comment 1: Respondents argue that the Department improperly
resorted to constructed value (CV), instead of utilizing
contemporaneous home market sales made in the ordinary course of trade.
Respondents note that in the Department's preliminary results, the
Department disregarded numerous home market sales that were below the
cost of production and, therefore, outside the ordinary course of
trade. In these instances, respondents contend that the Department
inappropriately resorted to CV, despite the existence of
contemporaneous home market sales of the foreign like product made in
the ordinary course of trade. Consequently, respondents argue that the
Department contravened the Court of Appeals for the Federal Circuit
(CAFC) January 8, 1998 decision in CEMEX v. United States, 133 F.3d 897
(Fed. Cir. 1998) (CEMEX). Respondents state that in CEMEX, the
Department disregarded home market sales of subject merchandise that
was comparable to the merchandise sold in the United States, as not in
the ordinary course of trade and, thus, ineligible as the basis for
determining foreign market value. Therefore, the Department used CV as
the basis for comparing U.S. sales.
    Respondents note that although CEMEX was decided under pre-URAA
law, the reasoning of the Court is applicable to the new statute. The
new statute continues to subordinate CV to home market sales for
determining normal value, therefore, allowing the Department to use CV
only where price for home market sales of the foreign like product in
the ordinary course of trade cannot be determined.
    Respondents note that in recent Departmental decisions, the
Department has referenced CEMEX, but never applied it's holding due to
time constraints and the fact that the case was decided under pre-URAA
law. Respondents contend that although CEMEX was decided under pre-URAA
law, the principles are applicable and must be applied. Respondents
argue that by applying its own matching hierarchy, the Department has
the facts on the record to confirm that contemporaneous sales of
foreign like product in the ordinary course of trade exist; therefore,
the Department does not need to resort to CV in these instances.
    Petitioners argue that the Department should not modify its
preliminary results with regard to the CEMEX decision. Petitioners
contend that the Department has examined and rejected arguments that it
should depart from its normal methodology and base normal value on
other models if the Department finds that all contemporaneous sales of
the identical or most similar merchandise are made at below-cost
prices, citing Final Results of Antidumping Administrative Review:
Canned Pineapple Fruit from Thailand;
[[Page 30186]]
63 FR 7392, 7393 (February 13, 1998) (Pineapple). In the Pineapple
case, petitioners note that the Department determined that it should
not modify its preliminary methodology to conform to CEMEX, ``Because
the Court's decision was issued so close to the deadline for completing
this administrative review, we have not had sufficient time to evaluate
and apply (if appropriate and if there are adequate facts on the
record) the decision to the facts of the ``post-URAA'' case. For these
reasons, we have determined to continue to apply our policy regarding
the use of CV when we have disregarded below-cost sales from the
calculation of NV.'' Petitioners also state that a similar approach was
applied in Final Results of Antidumping Administrative Review: Silicon
Metal from Brazil; 63 FR 6899 (February 11, 1998).
    Petitioners state that if the Department was to revise its model-
match methodology, the Department should focus on the facts on the
record because, when this review began, it was assumed that the
Department would use constructed value when the identical or most
similar matches identified were at below-cost prices. Thus, petitioners
argue that the record of this case does not permit use of the CEMEX
methodology. Petitioners point to the preliminary determinations in the
investigations of stainless steel wire rod as evidence. See Notice of
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Stainless Steel Wire Rod from
Taiwan; 63 FR 10841 (March 5, 1998) (SSWR from Taiwan). Petitioners
note that in SSWR from Taiwan, the Department stated that in order to
apply the CEMEX methodology, it would need information on the
appropriate product comparisons following application of the below-cost
test. Additionally, petitioners argue that in SSWR from Taiwan, the
Department did not rely on respondents' internal-code systems to
identify the next most similar models as a means to implement CEMEX.
Therefore, the Department issued a supplemental questionnaire in SSWR
from Taiwan requesting additional information on product
characteristics in order to be able to search for the next most similar
model when a matched product was sold below cost.
    Petitioners argue that the Department's approach in the SSWR from
Taiwan is in contrast to this case. In this review, petitioners argue
that the Department has accepted respondents' internal product-coding
system, in lieu of Department-developed criteria. Thus, petitioners
assert that by relying on respondents' internal product-coding system
and using the CEMEX methodology, the Department would use sales of less
similar models as the basis for normal value instead of CV. Moreover,
petitioners contend that the Department has not obtained additional
information regarding more precise physical characteristics of the
subject merchandise, or alternative matches to the models proposed,
that it would need in order to implement CEMEX. Petitioners note that
the respondents offered no more than three similar types of merchandise
as a basis for comparison. Additionally, petitioners claim that the
record data does not provide adequate alternative matches for the
Department to apply the CEMEX methodology. Finally, petitioners
maintain that were the Department to apply CEMEX in this case, it would
be inconsistent with its own conclusions in SSWR from Taiwan. For these
reasons, petitioners argue that the Department should reject
respondents' allegation that it should apply CEMEX and state that,
given the short time since the Federal Circuit decision and the lack of
adequate record data, the Department will continue to apply its normal
methodology of resorting to CV where the model selected for comparison
is not in the ordinary course of trade. Department's Position: We agree
with the respondents. In CEMEX, based on the pre-URAA version of the
Act, the Court discussed the appropriateness of using CV as the basis
for foreign market value when the Department finds home market sales to
be outside the ``ordinary course of trade.'' The URAA amended the
definition of sales outside the ``ordinary course of trade'' to include
sales disregarded under section 773(b)(1) of the Act. See section
771(15) of the Act. Consequently, the Department has reconsidered its
practice in accordance with this court decision and has determined that
it would be inappropriate to resort directly to CV, in lieu of foreign
market sales, as the basis for normal value if the Department finds
foreign market sales of merchandise identical or most similar to that
sold in the United States to be outside the ``ordinary course of
trade.''
    We will match a given U.S. sale to foreign market sales of the next
most similar model when all sales of the most comparable model are
below cost. The Department will use CV as the basis for normal value
only when there are no above-cost sales that are otherwise suitable for
comparison. Therefore, in this proceeding, when making comparisons in
accordance with section 771(16) of the Act, we considered all products
sold in the home market as described in the ``Scope of Review'' section
of this notice, that were in the ordinary course of trade for purposes
of determining appropriate product comparisons to U.S. sales. Where
there were no sales of identical merchandise in the home market made in
the ordinary course of trade to compare to U.S. sales, we compared U.S.
sales to sales of the most similar foreign like product made in the
ordinary course of trade, based on the characteristics listed in
Sections B and C of our antidumping questionnaire. We have implemented
the Court's decision in this case, to the extent that the data on the
record permitted. Where there were neither identical nor similar
matches reported by respondents, we have used CV as the basis for
normal value.
    Comment 2: Respondents argue that the Department should base CV
profit only on information pertaining to the POR as stated in section
773(a)(4) of the Act. Further, respondents contend that in its
preliminary results, the Department did not follow this methodology,
but based CV on data from both within and outside the POR. They note
that the Department used the cost of manufacturing (COM) and general
and administrative expenses (G&A) for the POR, but calculated CV profit
on all reported home market sales made in the ordinary course of trade.
Finally, respondents argue that the approach taken by the Department
was inaccurate and unfair because this approach encompassed the 26-
month home market window.
    Respondents contend that the purpose of this administrative review
is to determine whether imports into the United States during the POR
were sold at prices that would constitute dumping. Respondents assert
that the statute requires that ``a fair comparison shall be made
between the export price or constructed export price and normal
value,'' and section 773(a)(1)(A) of the Act provides that in order to
achieve a fair comparison with the export price or constructed export
price, normal value shall be the price ``at a time reasonably
corresponding to the time of the sale used to determine the export
price or constructed export price.'' They argue that CV is a surrogate
for price, and must be contemporaneous with the U.S. sale being
compared. Thus, the Department should use information to calculate CV
that corresponds to sales during the POR.
    Respondents state that they reported actual costs incurred for the
POR for both COP and CV as required by the Department's questionnaire.
However, in calculating CV profit for this case, the Department did not
use POR data, but
[[Page 30187]]
used all reported home market sales, which covered the period January
1995 through February 1997. Respondents argue that basing CV profit on
market behavior and conditions outside the POR leads to distortions and
is inappropriate, and the Department should revise its methodology for
the final results to calculate CV profit based on home market sales in
1996.
    Petitioners state that the Department's calculation of CV profit is
consistent with the Act and past practice. Petitioners note that the
calculation of CV profit is to be based on profits earned ``in
connection with the production and sale of a foreign like product, in
the ordinary course of trade, for consumption in the foreign country.''
See section 773(e)(2)(A) of the Act.
    Petitioners note that the home market sales identified in this
review are consistent with the Department's established practice. The
home market sales span the period from three months before the first
U.S. sale to two months after the last U.S. sale in the POR. Thus,
these sales fit the meaning of the Act. Petitioners contend that the
fact that respondents reported and made U.S. sales in a 26 month period
is not a flaw or unfair but merely reflects respondents' particular
reporting period.
    Petitioners assert that the Department may not use one database of
home market sales for its determination of normal value sales
comparisons and another for its determination of CV profit.
    Furthermore, petitioners contend that, contrary to respondents'
claim, the Department has traditionally interpreted the phrase ``at a
time reasonably corresponding to the time'' found in section
773(a)(1)(A) to mean a home market sale within the 90-60 day window.
Since respondents accepted this window, petitioners argue that
respondents must also accept this same database in identifying home
market sales from which to calculate CV profit.
    Petitioners state that it is the Department's practice to rely on
all home market sales reported in the foreign market sales database for
determining normal value as the basis for calculating CV profit.
Moreover, petitioners argue that the Department has used this approach
in Notice of Preliminary Results of Antidumping Duty Administrative
Review: Tapered Roller Bearings from Japan; 61 FR 25200 (May 20, 1996).
Accordingly, petitioners assert that the Department should continue
using respondents' reported home market sales as the basis for
calculating CV profit.
    Department's Position: We disagree with respondents. In this case,
the respondents reported home market sales based on the standard 60-
day/90-day contemporaneous window which, in this review, encompassed a
26-month period. The Department has used the home market sales during
this 26-month period to form the basis of its normal value calculation.
Thus, in accordance with its normal practice, the Department calculated
CV profit based on the contemporaneous sales data. In this case, U.S.
sales span a period of 21 months. It would not be appropriate to limit
the CV profit calculation to 12 months of home market sales, since this
would not reflect profit on all contemporaneous sales.
    The fact that we used costs based on a different period (in this
case, 12 months) does not render our CV profit calculation
inappropriate or unreasonable. The respondents only reported cost of
manufacture and general administrative expenses for the 1996 calendar
year (the POR) as the basis for costs of all reported home market
sales. The respondents did not claim that the costs reported for this
period were in any way unrepresentative of the costs incurred for sales
throughout the 26-month period. In fact, these same cost figures formed
the basis for COP in determining whether any of the home market sales
made during the 26-month sales reporting period had been sold at below-
cost prices within the meaning of section 773(b) of the Act. Thus, it
was not unreasonable for the Department to calculate CV profit using
the same home market cost data that it used to test for below-cost
sales.
    Further, if the respondents believed that for any reason the
submitted costs were not representative of the 26-month period, they
should have informed the Department that the 12-month costs used to
calculate CV profit were not representative of its 26-month costs.
Respondents knew from past experience that it is the Department's
practice, when calculating CV profit based on reported home market
sales, to calculate CV profit based on all reported contemporaneous
home market sales. The respondents have accepted this approach in past
administrative reviews (see Certain Stainless Steel Wire Rods from
France: Final Results of Antidumping Duty Administrative Review, 61 FR
47874 (September 11, 1996); Certain Stainless Steel Wire Rods from
France: Final Results of Antidumping Duty Administrative Review, 62 FR
7206 (February 18, 1997)) and have offered no compelling reason to
alter it in this review.
    Comment 3: Respondents argue that in calculating CEP profit in the
preliminary results, the Department inappropriately excluded non-arm's
length home market sales used in the calculation of CEP profit.
Respondents contend that this methodology is contrary to both the
statute and the Statement of Administrative Action (SAA), and is a
departure from the methodology used in the prior review.
    Respondents assert that section 772(f)(2)(C)(i) of the Act provides
that CEP profit will be calculated based on expenses and profit for all
sales in the United States and home market. Also, respondents note that
the SAA states that ``the total profit is calculated on the same basis
as the total expenses.'' See SAA at 155. Additionally, the SAA states
that ``the total expenses are all expenses incurred by or on behalf of
the foreign producer and exporter and the affiliated seller in the
United States with respect to the production and sale of the first of
the following alternatives which applies: (1) The subject merchandise
sold in the United States and the foreign like product sold in the
exporting country (if Commerce requested this information in order to
determine normal value and the constructed export price).'' See SAA at
154. Therefore, respondents argue that the statute and the SAA are
clear that both the expenses used to allocate the profit to the U.S.
sales, and the profit to be allocated, should be based on all sales of
the subject merchandise in the United States and the foreign like
product in the foreign market. Respondents maintain the statute does
not contain any provision for disregarding any sales in the calculation
of CEP profit; and maintain that disregarding any such sales would be
contrary to section 772(f) of the Act.
    Respondents note that the Department's recent policy bulletin
(``Calculation of Profit for Constructed Export Price'' Policy Bulletin
No. 97/1 (``CEP Profit Policy Bulletin'')) is incorrect because the CEP
profit calculation does not reflect actual profit or loss for actual
market prices. Respondents maintain that section 772(f)(2)(D) of the
Act states that ``actual profit'' represents the profit earned on all
sales for which expenses were ``determined'' under section
772(f)(2)(C), and section 772(f)(2)(C) states that total expenses are
all expenses incurred with respect to the subject merchandise sold in
the United States and the foreign like product sold in the home market
if requested by the Department in order to determine normal value and
constructed export price. Thus, because the Department
[[Page 30188]]
requested that respondents report all home market sales, and the Act
states that the calculation of total actual profit and total expenses
are made on the same basis, profits associated with non-arm's length
sales must be included in determining actual profit.
    Respondents argue that excluding non-arm's length home market sales
from the calculation of CEP profit distorts the calculation of total
actual profit and is inconsistent with the statute and the SAA.
Although the Department includes unprofitable sales to an unaffiliated
party in determining CEP profit--even if the sales are not in the
ordinary course of trade--respondents contend that the Department has
no justification for excluding sales with an affiliated party
(including profitable sales) only because these sales do not pass the
Department's arm's length test. Therefore, respondents argue that the
Department should base its calculation of CEP profit on all home market
sales, including sales found not to be made at arm's length.
    Petitioners state that the Department should continue to exclude
non-arm's length home market sales from its CEP profit calculation.
Petitioners argue that the Department has carefully analyzed this issue
in the past and has concluded that it would not be proper to consider
the profit (or lack thereof) on non-arm's length sales when attempting
to calculate total actual profit on CEP sales. Petitioners state that
the Department provided several reasons for its decision in its ``CEP
Profit Policy Bulletin.''
    Petitioners state that the Department properly recognized that non-
arm's length sales do not provide an indication of the actual profits
associated with these sales. Thus, petitioners argue that relying on
non-arm's length transfer prices affords respondents a chance to
manipulate the profit calculations by shifting profit to downstream
sales by affiliated customers. In order to avoid this manipulation,
petitioners contend that the Department must exclude sales that are not
at arm's-length prices from its calculation of CEP profit.
    Furthermore, petitioners assert that the Department's policy of
excluding sales that are not at arm's length from its calculation of
CEP profit is consistent with the Act because it requires the
calculation of total actual profit. Consequently, since the Act
recognizes that non-arm's length sales are not reliable indicators of
normal value or input costs, then they also are not reliable for
calculating actual profit.
    Department's Position: We agree with petitioners. As we stated in
our CEP Profit Policy Bulletin, ``sales to affiliates made at non-arm's
length prices . . . are excluded from the CEP profit calculation
because they do not reflect actual market prices and, thus, do not
represent actual profit (or loss).'' Further, the Department stated
that ``non-arm's length sales are not a reliable indicator of `actual
profit,' just as they are not treated as a reliable indicator of normal
value or input costs.'' See sections 773(a)(5) and 773(f) of the Act.
Moreover, the Department's Bulletin states that ``inclusion of non-
arm's length sales would inappropriately distort the calculation of
total actual profit. Therefore, we include below-cost sales but exclude
non-arm's length sales for purposes of computing sales revenues and
expenses for CEP profit.''
    Comment 4: Petitioners argue that the Department made a fundamental
legal error in determining a CEP offset was appropriate by identifying
the level of trade of CEP sales on an adjusted basis while identifying
the level of trade of home market sales on an unadjusted basis.
Petitioners argue that the comparison is inaccurate and leads to the
wrong conclusion that CEP sales were at a different and less advanced
level of trade than the home market sales. Petitioners argue that if
the Department were to look at the levels of trade for sales in the
U.S. and home market on the same basis, and rely on the unadjusted
starting price for both sales as the proper levels of trade, the
Department would conclude that the U.S. and home market levels of trade
are the same and that a CEP offset would not be necessary.
    Petitioners contend that the Department's position that the CEP
level of trade is an adjusted price but the normal value level of trade
is linked to the starting price is not supported by the statute.
Section 772(b) of the Act states that CEP is ``the price the subject
merchandise is first sold . . . to a purchaser not affiliated with the
producer or exporter, as adjusted under subsections (c) and (d).
Therefore, petitioners contend that the starting price for a CEP sales
comparison is the price at which the product is sold to an unaffiliated
purchaser. Additionally, petitioners assert that the statute defines
normal value as the price at which the foreign like product is first
sold, under a variety of terms and conditions which provide for the
price to be adjusted. See sections 773(a)(1)(A) and 773(a)(1)(B).
Moreover, petitioners contend that section 773(a)(6)(C)(iii) of the Act
requires that normal value be adjusted for ``other differences in the
circumstances of sale,'' between the CEP and normal value sale, which
includes adjustments for the same types of expenses deducted from CEP.
    Accordingly, petitioners argue that it is not accurate for the
Department to determine that CEP is a price that is exclusive of all
selling expenses, since these expenses are required to be adjusted for
pursuant to section 772(d) of the Act, but to describe normal value as
a price that is inclusive of all selling functions and ignore the
adjustments to normal value that are statutorily mandated by section
773(a)(6) of the Act. The Department must consider levels of trade in
the same manner in order to arrive at a fair comparison. Furthermore,
petitioners contend that Congress intended for the Department to look
at the sale to an unaffiliated purchaser, when examining CEP sales. See
section 772(b) of the Act. Petitioners argue that a CEP transaction is
between the foreign producer/U.S. affiliate, and the unaffiliated U.S.
producer. Petitioners argue that the Department has ignored these
transactions and has incorrectly focused on the adjusted CEP sale.
Consequently, they argue the Department is examining a level of trade
between a foreign producer and U.S. affiliate that is artificial.
    Respondents argue that the Department properly examined the CEP
level of trade based on the price after adjustments under section
772(d) of the Act. Respondents argue that in the preliminary results,
the Department properly determined that its CEP sales to MAC (i.e., its
U.S. super-distributor), were made at a different level of trade than
home market sales (which were made to end-users).
    Respondents maintain that petitioners argument is the identical
argument from the first and second administrative reviews in which the
Department granted a CEP offset. In fact, the argument also has been
considered and rejected by the Department, in other administrative
proceedings and in its final regulations. See Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR 27296, 27414 (May 19, 1997);
and Notice of Final Determination of Sales at Less Than Fair Value:
Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909,
8919-8120 (February 23, 1998), Notice of Final Determination of Sales
at Less Than Fair Value: Large Newspaper Printing Presses and
Components Thereof, Whether Assembled or Unassembled from Japan, 61 FR
38139, 38143 (July 23, 1996). Respondents maintain that the
Department's position is clear with
[[Page 30189]]
regard to identifying the level of trade of CEP sales. The Department
has stated ``in those cases where a level of trade comparison is
warranted and possible, then for CEP sales the level of trade will be
evaluated based on the price after adjustments are made under section
772(d) of the Act . . . In every case decided under the revised
antidumping statute, the Department has consistently adhered to this
interpretation of the SAA and of the Act.'' See Final Results of
Antidumping Duty Administrative Review, Dynamic Random Access Memory
Semiconductors of One Megabit or Above from the Republic of Korea; 62
FR 965, 966 (January 7, 1997). Therefore, respondents argue that the
Department should continue its past practice of beginning its level of
trade analysis for CEP sales after adjusting for U.S. selling expenses
and profit, as required by the SAA and the statute. See SAA at 159, and
section 772(d) of the Act.
    Department's Position: We disagree with petitioners. The Department
is continuing its practice, articulated in section 351.412(c) of the
new regulations (see 62 FR 27296, 27414), of making the level of trade
comparisons for CEP sales on the basis of the CEP after adjustments
provided for in section 772(d) of the statute.
    As we stated in the second administrative review (see Certain
Stainless Steel Wire Rods from France: Final Results of Antidumping
Duty Administrative Review, 62 FR 7206 (February 18, 1997) (``SSWR
II'')) the starting price is not the basis for comparison for CEP
sales. The comparison is based on the CEP, which is net of the CEP
deductions (i.e., those deductions provided for in section 772(d) of
the Act which are only applicable to CEP sales). The statute requires
the Department to make comparisons between NV and EP or CEP to the
extent practicable, at the same level of trade. See section
773(a)(1)(B) of the Act. If the starting price is used to determine the
level of trade for CEP sales, the Department's ability to make
meaningful comparisons at the same level of trade (or appropriate
adjustments for differences in levels of trade) would be severely
undermined in cases involving CEP sales. Similarly, using the
unadjusted price to determine the level of trade of both EP and CEP
sales would result in a finding of different levels of trade for an EP
and a CEP sale when, after adjustment, the selling prices reflect the
same selling functions. Moreover, using the adjusted CEP for
establishing the level of trade is consistent with the purposes of the
CEP adjustment; to determine what the sales price would have been had
the transaction between the producer and its U.S. affiliate qualified
as an export price sale. Accordingly, we have followed our practice
from the previous administrative review, which specifies that the level
of trade analyzed for EP sales is that of the unadjusted price, and for
CEP sales it is the level of trade of the price after the deduction of
U.S. selling expenses and profit associated with economic activity in
the United States pursuant to section 772(d) of the Act. Therefore, for
the final results, the Department has continued to apply the level-of-
trade analysis from its preliminary results in this review.\1\
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    \1\ This approach was recently criticized by the Court of
International Trade in Borden, Inc. v. United States, Slip Op. 98-36
(March 26, 1998), at 55-59 (Borden) (rejecting the Department's
practice of adjusting the CEP starting price pursuant to section
772(d) of the Act prior to making the level of trade comparisons).
The Department intends to appeal this decision and, thus, will
continue to apply the methodology articulated in its new regulations
(19 C.F.R. Sec. 351.412).
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    Comment 5: Petitioners argue that there are no differences in
selling functions between the U.S. and home market sales. Consequently,
even if the Department relies on an adjusted CEP to identify the U.S.
level of trade, respondents are not entitled to a CEP offset.
Petitioners maintain that the channels of distribution and the selling
activities for home market sales made during the POR are comparable to
the adjusted CEP sales.
    Petitioners note that they informed the Department that sales in
the home market were predominantly through a different channel of
distribution and involved fewer selling functions than the Department
had examined in past reviews. In prior reviews, petitioners stated that
respondents' sales were primarily through Ugine Service (i.e., channel
2) and involved an extra layer of selling expenses when compared to
direct home market sales (i.e.,  channel 1) or CEP sales, and it was
the Ugine Service sales that respondents focused on to distinguish the
level of trade of the CEP and the home market sales.
    Petitioners assert that they ran a test on the data which showed
that sales through Ugine Service are not predominate in terms of home
market sales for comparison. Petitioners noted that respondents
identify selling functions associated with channel 1 home market sales
but not with CEP sales, such as, customer sales contacts, technical
services and administrative functions. Nevertheless, petitioners
contend that the record demonstrates that the selling functions and
expenses associated with sales to both home market channel 1 and the
CEP sales, on an adjusted basis, are the same. Petitioners maintain
that the indirect selling expenses and their magnitude are the same for
both home market sales through channel 1 and CEP sales. Thus,
petitioners argue there can be no difference between the levels of
trade for home market channel 1 and CEP sales based on the intensity or
nature of the expenses for both home market channel 1 and U.S. CEP
sales, citing Professional Electric Cutting Tools from Japan: Final
Results of Antidumping Duty Administrative Review, 63 FR 6891, 6895
(February 11, 1998).
    Moreover, petitioners note that the Department did not deduct
indirect selling expenses in calculating the adjusted CEP price. Thus,
petitioners argue that the selling functions must still be considered
as selling functions associated with the CEP sale in the level of trade
analysis. Petitioners contend that the indirect selling activities and
expenses incurred by respondents (i.e., MAC and Techalloy) in the U.S.
do not replace the selling activities and expenses incurred in the home
market, but provide an extra layer of functions and expenses in the
U.S. market.
    Petitioners argue that the only difference in selling functions
between the home market and the CEP sales is the indirect selling
expenses associated with sales through channel 2 (Ugine Service).
Petitioners maintain that these additional selling expenses cannot
justify finding different levels of trade because the Department found
that these additional selling expenses do not support a finding of
different home market levels of trade between channel 1 and channel 2
sales. Therefore, petitioners argue that the record does not establish
any differences in selling functions between channel 1 home market
sales and CEP sales, and there are insufficient differences in selling
functions between channel 2 sales and CEP sales to justify different
levels of trade.
    Respondents argue that they had different and fewer selling
functions which were performed for the CEP sales than for home market
sales to end-users, which are at a more advanced stage of distribution
than the CEP sales. Therefore, respondents argue that pursuant to
section 773(a)(7)(B) of the Act, the Department was correct in granting
a CEP offset.
    Respondents state that petitioners mischaracterize the Department's
analysis of a CEP offset. Respondents assert that in the first and
second administrative reviews of this case, the Department examined and
compared the selling functions performed by Imphy and Ugine-Savoie for
sales to its
[[Page 30190]]
U.S. affiliate (i.e., MAC), and found the selling expenses in the home
market to end-users were different than selling expenses in sales to
MAC and involved different levels of trade. See Preliminary Results of
Antidumping Administrative Review: Certain Stainless Steel Wire Rods
from France, 61 FR 53199, 53201-53202 (September 11, 1996)(``SSWR I'').
Specifically, the Department found that the record reflected that
customer sales contacts, technical services, inventory maintenance,
computer systems and other administrative functions were selling
functions involved in home market sales to end-users and not in sales
to MAC. The Department found these differences demonstrate a difference
in level of trade. Respondents argue that the exact same selling
functions exist in this review and more differences are apparent when
the totality of selling functions are analyzed. Respondents assert that
Imphy and Ugine-Savoie perform certain selling functions in the home
market for direct sales, (e.g., suggesting product improvements,
developing sales strategy, providing information on market potential
and competitors, pricing, scheduling production and delivery, visiting
customers/potential customers and receiving orders, promoting new
products, etc.) but only to a limited extent or not at all, for CEP
sales.
    Respondents assert that petitioners' argument that respondents'
home market sales involved the same selling functions as CEP sales is
the exact same argument from the first administrative review.
Respondents argue that, in this administrative review, they have more
responsibility for generating, administering and servicing sales to
end-users in the home market than for U.S. sales to MAC. According to
respondents, MAC's role as a super-distributor is to remove and assume
virtually all of the risks and selling functions involved in selling to
the U.S. market. Thus, these differences in selling functions support
the Department's determination of two different levels of trade.
    Respondents argue that petitioners' allegation that there is no
difference in indirect selling expenses incurred by Imphy and Ugine-
Savoie between home market channel 1 and CEP sales is a false
allegation. Respondents state that they allocated their headquarters
indirect selling expenses based on worldwide net sales revenue for the
purpose of this administrative review, because respondents do not
separately book selling expenses by market. Additionally, headquarters
indirect selling expenses are difficult to separate by market. Any
separation of these expenses could produce rough and potentially
unverifiable estimates. Payroll expense is the predominant expense
which is difficult to separate by market since many of the same
headquarters personnel support sales to various markets. Nevertheless,
respondents contend that this allocation does not negate the
differences in the selling functions for sales to home market end-
users, compared to sales to MAC. Respondents maintain that in
responding to the Department's questionnaire, they tried to avoid
obtaining any advantage through their headquarters selling expenses,
and should not be penalized for the documented and verified differences
in selling functions between the two markets.
    Moreover, respondents argue that petitioners' argument that direct
sales predominate in the home market is inaccurate because their
analysis examined raw information, not what was actually used in the
margin calculation. Analysis of the preliminary results shows that
sales through Ugine Service predominated in the comparisons,
particularly in comparisons to CEP. Respondents assert that this is
important, because the Department calculates CV using home market
selling expenses to derive a weighted average expense factor to add to
the cost of manufacture, citing Department of Commerce, Import
Administration Policy Bulletin, ``Treatment of adjustments and selling
expenses in calculating the cost of production (COP) and constructed
value (CV)'' (March 25, 1994). Respondents note that the selling
expense factor included selling expenses attributable to sales through
Ugine Service, which were greater than the selling expenses involved in
direct sales. Lastly, respondents state that more than half of the CEP
sales were compared to prices or CV reflecting the selling expenses of
Ugine Service. Therefore, respondents argue that they are entitled to a
CEP offset for comparisons to home market sales to end-users because
the home market sales involve a different and more advanced level of
distribution than sales to MAC and petitioners have not provided any
evidence to reverse the level of trade analysis.
    Department's Position: We disagree with petitioners. We reviewed
respondents' selling functions and activities, and found that no single
selling function was sufficient to warrant a separate level of trade in
the home market. Specifically, we analyzed the respondents' level of
trade chart for the home market and found that only three selling
functions differed between the two home market channels of trade
(visiting customers/receiving orders, promoting new products, and
contacting customers/preparing claim reports). Additionally, we found
that the vast majority of the selling functions were either identical
or only differed moderately in intensity (i.e., order evaluation for
production of specific products, analyzing and paying warranty claims,
pre-sale inventory, packing, post-sale warehousing, suggesting
potential product improvements, developing sales strategy, providing
information on market potential and competitors, pricing, scheduling
production and delivery, follow-up on unpaid invoices, technical advice
regarding use, general administrative support including personnel,
advertising, computer systems and arranging freight and delivery).
Therefore, we have determined that the selling functions reported for
the home market channels of distribution are not different enough to
warrant two levels of trade in the home market.
    To determine whether separate levels of trade exist between the
U.S. market and home market, we examined the respondents' level of
trade claims. In order to make this determination, we reviewed the
selling activities associated with each channel of distribution. The
Department compared EP sales to home market sales, and determined that
sales were made at the same LOT (i.e., to end-users) in both markets.
See May 7, 1997, Questionnaire Response, Exhibit 11.
    For CEP sales, consistent with our practice, discussed above in
Comment 4, we consider only the selling activities reflected in the
constructed price, i.e., after the expenses and profit are deducted
under section 772(d) of the Act. Whenever sales are made by or through
an affiliated company or agent in CEP situations, we consider all
selling activities of both affiliated parties, except for those selling
activities related to the expenses deducted under section 772(d) of the
Act to determine the CEP level of trade.
    The record indicates that the following selling functions were
performed for HM sales to end users (at varying levels of intensity)
but are not reflected in CEP: developing sales strategy, providing
information on market potential and competitors, order evaluation for
pricing and production scheduling, promoting new products, following-up
on unpaid invoices, providing technical services, and performing
administrative functions.
[[Page 30191]]
See May 7, 1997, Questionnaire Response, Exhibit 11.
    The differences between the CEP level of trade and the home market
level of trade are sufficient to constitute different levels of trade.
We found that the data on the record did not allow the Department to
determine whether the differences in levels of trade affect price
comparability. Since there is only one home market level of trade which
has no equivalent to the CEP level of trade, price differences between
the relevant levels of trade can not be quantified. Further, the
Department has determined that home market sales involved a more
advanced stage of distribution (to end-users) as compared to
respondents' CEP sales in the United States (MAC and Techalloy).
    Section 773(a)(7)(B) of the Act states that a CEP ``offset'' may be
made when two conditions exist: (1) normal value is established at a
level of trade which constitutes a more advanced stage of distribution
than the level of trade of the CEP; and (2) the data available do not
provide an appropriate basis for a level-of-trade adjustment.
    The Department has considered petitioners' argument that there is
no difference between the home market channel 1 and CEP sales with
regard to indirect selling expenses and we do not find it persuasive.
Record evidence indicates that there are differences in selling
activities between home market sales to end users and CEP sales.
Notwithstanding these different activities, the indirect selling
expenses reported by Imphy and Ugine-Savoie are the same for home
market channel 1 and CEP. This does not mean, however, that the selling
activities are the same for these two groups of sales. The amount of
selling expenses in itself is not a dispositive indicator of whether
different levels of trade exist. In this case, there clearly are
sufficient differences in selling activities despite similar amounts of
expenses.
    Comment 6: Petitioners argue that in calculating CEP, the
Department failed to deduct all selling expenses incurred in selling
the subject merchandise to the United States. Petitioners assert that
the Department did not deduct certain selling expenses (i.e., indirect
selling expenses and inventory carrying costs) that were incurred with
respect to U.S. sales.
    Petitioners argue that section 772(d)(1) of the Act states that the
Department is required to deduct all direct and indirect selling
expenses ``incurred by or for the account of the producer or exporter,
or the affiliated seller in the United States, in selling the subject
merchandise.'' Additionally, petitioners maintain that the SAA states
that indirect selling expenses are to be deducted from CEP, citing SAA
at 824. Also, petitioners maintain that the Department should read the
SAA, at page 823, to mean that it should deduct indirect selling
expenses incurred by the producer with respect to U.S. sales of subject
merchandise in the home market or expenses incurred in selling to its
affiliated U.S. importer.
    Lastly, petitioners argue that the Court of International Trade
upheld the Department's past practice of deducting indirect selling
expenses incurred in the home market or in selling to an affiliated
importer in the calculation of exporter's sales price (ESP), the
predecessor to CEP. See Silver Reed America, Inc. v. United States, 683
F. Supp. 1393 (1988). Also, petitioners note that the URAA did not
substantively amend the CEP provision to alter the deductions from CEP
as compared to ESP. In fact, petitioners argue the URAA was more
explicit than the prior statute in requiring all selling expenses be
deducted from CEP, citing section 772(d)(1) of the Act.
    Respondents argue that petitioners made the same allegations in the
first and second administrative reviews of this proceeding and the
Department has rejected the argument in both instances. Further,
respondents contend that these expenses were not incurred with respect
to U.S. sales.
    Respondents assert that in the first and second administrative
reviews, the Department did not deduct indirect selling expenses
incurred in France or inventory carrying costs imputed to the country
of manufacture in determining CEP, and there is no new information in
this review to cause the Department to reconsider its decision.
Respondents argue that the Department decided this exact issue in the
second administrative review, wherein the Department stated that
section 772(d)(1) of the Act provided for the deduction of specified
expenses incurred in selling in the United States; it did not provide
for the deduction of indirect expenses incurred in the home market. See
SSWR II, 62 FR at 7210. Therefore, respondents contend that pursuant to
section 772(d)(1) of the Act, home market expenses are not properly
deducted from the starting price in determining CEP and they do not
represent expenses associated with economic activities occurring in the
United States. See SAA at 153.
    Moreover, respondents assert that the Department's approach is
consistent with its past practice and with section 351.402(b) of its
new regulations. See Preliminary Results of Antidumping Administrative
Review: Calcium Aluminate Flux from France, 61 FR 40396, 40397 (August
2, 1996). Respondents note that section 351.402(b) indicates that the
Secretary will deduct only expenses associated with a sale to an
unaffiliated customer in the United States. Hence, the indirect
expenses reported in the DINDIRSU field are expenses associated with
selling to MAC, Imphy and Ugine-Savoie's affiliated reseller in the
U.S., and are not deducted in the calculation of CEP. Additionally,
respondents assert that home market inventory carrying costs for sales
to the U.S. reported in the DINVCARU field are imputed inventory
carrying costs related to selling to MAC. Respondents argue that
deducting these expenses would be inconsistent with the statute.
Finally, respondents argue that petitioners' citation to Silver Reed is
not appropriate because, as the Department previously has found,
``cases addressing pre-URAA practice are not applicable.'' See SSWR I,
61 FR at 47882. Therefore, respondents argue that the Department should
reject petitioners' arguments and not deduct these expenses in
calculating CEP.
    Department's Position: We disagree with petitioners. As we stated
in the final results of the first and second administrative review of
this order (see SSWR I, 61 FR at 47874; SSWR II, 62 FR at 7206), the
Department does not deduct indirect expenses incurred in selling to the
affiliated U.S. importer under section 772(d) of the Act. Section
772(d) of the Act is intended to provide for the deduction of expenses
associated with economic activities occurring in the United States. See
SAA at 823; see also, GATT 1994 Antidumping Agreement, article 2.4; see
also, Final Results of Antidumping Duty Administrative Review; Certain
Cold-Rolled Carbon Steel Flat Products from the Netherlands: 63 FR
13204, 13212 (March 18, 1998).
    The Department's practice regarding deductions from CEP under
section 772(d) of the Act is articulated in its new regulations.
Section 351.402(b) of these regulations state that ``the Secretary will
make adjustments for expenses associated with commercial activities in
the United States that relate to the sale to an unaffiliated purchaser,
no matter where or when paid.'' 62 FR 27296, 27411. Additionally, the
Department's regulations state that ``the Secretary will not make an
adjustment for any expense that is related solely to the sale to an
affiliated importer in the United States.'' Id. The inventory carrying
costs petitioners refer to are expenses related solely to the sale to
the affiliated importer (i.e., MAC). Similarly, the indirect selling
expenses
[[Page 30192]]
incurred in the home market do not represent expenses associated with
economic activities in the United States. Therefore, for the final
results, the Department has not deducted the indirect selling expenses
and inventory carrying costs referred to by petitioners in its
calculation of CEP.
    Comment 7: Petitioners argue that if the Department does not deduct
certain selling expenses (i.e., indirect selling expenses and inventory
carrying costs) from the CEP calculation, it may not deduct the same
expenses from normal value through the CEP offset. Petitioners assert
that the CEP offset is used to balance deductions for selling expenses
made to CEP where there are different levels of trade. Petitioners
maintain that certain indirect selling activities undertaken by Imphy
and Ugine-Savoie in connection with their home market sales and CEP
sales are the same. See Comment 5 above. Petitioners contend that
because Department did not deduct indirect selling expenses and
inventory carrying costs in the calculation of CEP, they should not be
deducted from normal value as part of the CEP offset.
    Respondents argue that the Department's calculation of the CEP
offset in the preliminary results is in accordance with the Act.
Further, respondents contend that the CEP offset can include indirect
selling expenses and inventory carrying costs incurred in the home
market even if those expenses are not deducted from CEP. Respondents
assert that there is no statutory or other basis to consider whether a
particular home market indirect expense is also incurred with CEP
sales. Moreover, respondents cite to section 773(a)(7)(B) of the Act
and argue that the test is whether the home market indirect expenses
are incurred on sales in the home market. On that basis, all of the
indirect expenses incurred in the home market (i.e., indirect selling
expenses for Imphy's and Ugine-Savoie's commercial departments
(INDIRS1H), product liability premiums (PRLBPRMH), and inventory
carrying costs (INVCARH)) should be taken into account in calculating
the CEP offset for all home market sales. Additionally, respondents
argue that the indirect selling expenses for Ugine Service (INDIRS2H)
should be considered in calculating the CEP offset.
    Department's Position: We agree with the respondents. Section
773(a)(7)(B) of the Act states that when the constructed export price
offset is applicable, ``normal value shall be reduced by the amount of
indirect selling expenses incurred in the country in which normal value
is determined on sales of the foreign like product but not more than
the amount of such expenses for which a deduction is made under section
772(d)(1)(D).'' Accordingly, the statute directs the Department to make
deductions for the CEP offset for home market indirect expense(s)
incurred on sales in the home market. The statue does not require that
the indirect selling expenses deducted from normal value be identical
or comparable in nature to the direct or indirect selling expenses
deducted from CEP.
    Section 351.412(f)(2) of the Department's new regulations similarly
reflect the Department's practice that the amount of the CEP offset
``will be the amount of indirect selling expenses included in normal
value, up to the amount of indirect selling expenses deducted and
determining constructed export price.'' 62 FR 27296, 27415. This
regulation goes on to define indirect selling expenses as ``selling
expenses * * * that the seller would incur regardless of whether
particular sales were made, but that reasonably may be attributed, in
whole or in part, to such sales.'' Id. These regulations are consistent
with the Department's practice that the CEP offset is composed of home
market indirect selling expenses and there is no requirement that the
same or comparable types of expenses be deducted from CEP in order for
the expenses to be included in the CEP offset. For these reasons, the
Department has deducted all of the indirect expenses incurred in the
home market in calculating the CEP offset for home market sales matched
to CEP transactions.
    Comment 8: Petitioners argue that the Department should deny
respondents' adjustment for negative billing adjustments for certain
home market sales. Petitioners contend that respondents have failed to
correct double-counting errors with regard to these billing adjustments
and warranty costs in their revised questionnaire response, and to
prove that billing adjustments were due to billing errors or link the
billing adjustments to billing errors.
    Petitioners note that respondents stated in their July 28, 1997
supplemental questionnaire response, that ``[f]or certain sales, Ugine-
Savoie erroneously reported the associated warranty claim as a billing
adjustment.'' Also, petitioners note that the questionnaire response
indicated that ``on the revised HM Sales File submitted with this
response, the billing adjustment has been removed for these sales, as
the claim was included within warranty expense.'' See July 28, 1997
Supplemental Questionnaire Response at page 12. Thus, petitioners note
that respondents acknowledged that certain warranty expenses were
double-counted in their original response because certain billing
expense adjustments were also reported as warranty expenses, and the
billing adjustments were made to invoice prices (BILLADPH), not
quantities (BILLADQH). Therefore, petitioners contend that respondents
should have made corrections to the BILLADPH computer field. However,
petitioners assert that respondents did not correct the double-counting
error in their amended home market sales listing. See Petitioners'
letter of December 4, 1997.
    Petitioners note that respondents stated the double-counting error
was corrected in the amended home market sales listing because the
double-counted amounts were removed from the BILLADQH field. See
Respondents' letter of December 15, 1997 at pages 8-10. However,
petitioners argue that the amounts reported under BILLADQH related to
quantity adjustments for warranty claims, not the prices. Petitioners
assert that removing the quantity amounts cannot correct the error of
double-counting warranty expenses because the amounts associated with
warranty claims are still reported in the invoice prices (i.e.,
BILLADPH) and warranty expenses. Therefore, petitioners argue the
Department should deny respondents' claimed negative billing
adjustments because they failed to correct the double-counting of
billing adjustments and warranty expenses and did not provide the
Department the information needed to correct the errors.
    Petitioners also argue that respondents have failed to demonstrate
that the claimed billing adjustments were due to billing errors.
Petitioners have identified examples of where billing adjustments took
place for some sales but not others of the same product made on the
same day.
    Respondents argue that petitioners wrongly asserted that
respondents failed to correct the double-counting of reported warranty
expense in its revised sales listing (i.e., July 28, 1997 supplemental
questionnaire response) and failed to substantiate that the reported
billing adjustments were due to billing errors or to link the billing
adjustments to the billing errors. Respondents state that petitioners
are confusing invoice revenue and invoice unit price. Respondents note,
as stated in their December 15, 1997 letter to the Department, that
billing revisions relating to warranty expense items involved
adjustments to quantity (BILLADQH), rather than price (BILLADPH), and
affected the QTYH
[[Page 30193]]
and BILLADQU fields. Respondents stated that they corrected errors in
their billing adjustments and warranty expenses in their July 28, 1997
supplemental response. To correct the errors, respondents made
corrections to their BILLADQH and QTYH fields to correct the errors.
The warranty field was not revised.
    Respondents contend that petitioners have not commented on or
acknowledged their calculation example in their December 15, 1997
letter which illustrated the correction of the double-counting. In
reply to petitioners' identification of eight observations (which are
four pairs of transactions) that further question respondents' billing
adjustments, respondents state that for two pairs of the transactions,
Imphy should have reported billing adjustments in the BILLADPH field,
and that Imphy had a computer programming error that caused the
omission of the billing adjustments from these sales. Additionally,
respondents explain that this mistake was due to credit memos against
certain invoice numbers resulting from calculating invoice price on the
original invoices.
    Nevertheless, respondents argue that all of the other records
alleged to be errors by petitioners are reported correctly. Respondents
stated that for the other two pairs of observations that petitioners
alleged included errors in billing adjustments to price, respondents
provided the following explanations: one transaction reflected a
special price adjustment granted by Ugine-Savoie, which the customer
requested to meet a specific market condition, while the other
transaction was a price adjustment that the customer requested.
Therefore, respondents assert that petitioners have no basis to request
the Department to deny any of the billing adjustments reported.
    Department's Position: We agree with respondents. The Department
has examined the respondents' home market sales database, specifically
the sales that petitioners alleged were double-counted with regard to
billing adjustments and warranty expenses, and found that the billing
adjustments had been revised and correctly reported. In its analysis,
the Department examined respondents' July 28, 1997 supplemental
questionnaire response, home market sales database, and letter of
December 15, 1997. From the information on the record, we found that
respondents had eliminated the billing adjustment quantity from the
BILLADQH field which respondents used to report credit memos associated
with warranty claims. In addition, we found that they subsequently
revised the quantity reported in the QTYH field, increasing it by the
amount that had been reported in the BILLADQH field. Further, the
Department performed mathematical calculations on the relevant home
market sales to ensure that respondents had corrected the double-
counting error. We found that respondents had indeed corrected their
double-counting error, and found that their explanation that the
double-counting error effected the invoice revenue and not the invoice
price was consistent with the reported data.
    Additionally, the Department has determined that respondents have
properly reported all of their billing adjustments. We examined
respondents' December 15, 1997 letter and related home market sales and
found that the alloy surcharge and billing adjustments were reported
correctly. Therefore, we have determined that respondents have properly
reported all of their billing adjustments with the exception of the two
invoices (fifteen home market sales observations) that did not have
adjustments reported due to a computer programming error. Respondents
reported these errors in their case briefs. The information submitted
regarding the correction of these errors constituted new factual
information which was untimely submitted. Petitioners did not have an
opportunity to comment on this new factual information which was
submitted too late for consideration by the Department. For these
reasons, the Department did not take this information into account for
these final results.
    Comment 9: Petitioners argue that the Department incorrectly
categorized certain U.S. sales as sales that were made outside the POR,
and excluded these sales from its model match program. Petitioners
state that the Department's computer program indicates that even though
the subject merchandise of these sales entered the U.S. prior to the
POR, the sales were made during the POR. Moreover, they contend that
the Department's past practice has been to examine CEP sales during the
POR, considering there is a significant lag between entry date and sale
date for the CEP sales. See Gray Portland Cement and Clinker from
Japan: Final Results of Antidumping Duty Administrative Review, 58 FR
48826 (1993).
    The respondents did not comment on this argument.
    Department's Position: We agree with the petitioners. The
Department incorrectly categorized certain U.S. sales as sales that
were made outside the POR, and excluded these sales from its model
match program. Therefore, for the final results, the Department has
corrected its computer program to include these sales.
    Comment 10: Respondents argue that the Department incorrectly
recalculated its reported home market credit expenses for sales with
missing payment and shipment dates. In the preliminary results,
respondents note that the Department stated that it intended to
calculate the missing payment or shipment date based on the average
time period between invoice date and payment or shipment date,
respectively. Respondents argue, however, that the Department committed
two programming errors in this recalculation. Therefore, respondents
stated that the Department should correct its errors and provided
programming language to fix the alleged errors.
    The petitioners did not comment on this argument.
    Department's Position: We agree with respondents and have corrected
the home market credit expense calculation for sales with missing
payment and shipment dates for the final results.
    Comment 11: Respondents argue that the Department did not include
indirect selling expenses related to EP sales in the total expenses
used to calculate CEP profit pursuant to section 772(d)(3) of the Act,
because the Department set indirect selling expenses for EP sales to
zero before calculating the CEP profit rate. Respondents maintain that
the Department requested indirect selling expenses related to both EP
and CEP sales, and the Department's recent policy bulletin on the
calculation of CEP profit states that the calculation of total actual
profit under section 772(f)(2)(D) includes all revenues and expenses
from EP sales. Thus, indirect expenses related to EP sales should have
been included in the expenses used to calculate CEP profit.
    The petitioners' did not comment on this argument.
    Department's Position: We agree with the respondents in part. We
agree that the calculation of total actual profit under section
772(f)(2)(D) of the statute includes all revenues and expenses
resulting from the respondent's U.S. sales and home market sales. See
Final Results of Antidumping Duty Administrative Review; Certain Cold-
Rolled Carbon Steel Flat Products from the Netherlands; 63 FR 13204,
13211 (March 18, 1998). The Department, however, has not adopted the
computer programming changes suggested by respondents. Instead, in the
final margin program, the Department changed the definition of a
variable (INDEXUS) to be
[[Page 30194]]
the sum of indirect selling expenses and inventory carrying costs
incurred in the United States, and deleted another variable (INDEXPU)
from the final margin program. For a complete listing of the changes
the Department has made to its final margin program, please see the
Department's analysis memorandum and final margin computer program.
    Comment 12: Respondents argue that the Department did not calculate
CV profit consistent with its determination of the CV profit rate.
Respondents assert that the Department calculated the CV profit rate as
the ratio of total home market profit on above-cost sales to the sum of
the total cost of manufacture, G&A, net financial expense, and packing
expenses. However, the Department applied the CV profit rate to a
larger base, in calculating the profit amount used to calculate profit
for CV. Respondents maintain that the CV profit rate should be applied
to the same expenses that were included in the denominator used to
calculate the CV profit rate. Therefore, respondents state that the
Department should correct its program to exclude direct and indirect
selling expenses from the base to which the CV profit ratio was
applied.
    The petitioners did not comment on this argument.
    Department's Position: We agree with respondents and have corrected
this error for the final results.
Final Results of Review
    As a result of our review, we have determined that the following
margins exist:
------------------------------------------------------------------------
                                                                 Margin
          Manufacturer/exporter                Time period     (percent)
------------------------------------------------------------------------
Imphy/Ugine-Savoie.......................    1/1/96--12/31/96      7.46
------------------------------------------------------------------------
    The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between United States price and normal value may vary from
the percentages stated above. The Department will issue appraisement
instructions directly to the Customs Service. The final results of this
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by this review. For duty assessment
purposes, we calculated an importer-specific assessment rate by
aggregating the dumping margins calculated for all U.S. sales to each
importer and dividing this amount by the total value of subject
merchandise entered during the POR for each importer.
    Furthermore, the following deposit requirements will be effective
upon publication of this notice of final results of review for all
shipments of certain stainless steel wire rods from France entered, or
withdrawn from warehouse, for consumption on or after the publication
date, as provided for by section 751(a)(1) of the Act: (1) the cash
deposit rates for the reviewed companies will be the rates for those
firms as stated above; (2) if the exporter is not covered in this
review, or the original 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 (3) the cash
deposit rate for all other manufacturers or exporters will continue to
be 24.51 percent for stainless steel wire rods, the all others rate
established in the LTFV investigation. See Amended Final Determination
and Antidumping Duty Order: Certain Stainless Steel Wire Rods from
France (59 FR 4022, January 28, 1994).
    These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
    This notice serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation or 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 the only reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with section 353.34(d) of the Department's
regulations. Timely 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 in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.33(c)(5).
    Dated: May 26, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-14759 Filed 6-2-98; 8:45 am]
BILLING CODE 3510-DS-P