67 FR 31268, May 9, 2002

DEPARTMENT OF COMMERCE

International Trade Administration

[A-421-810]
 
Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Cold-Rolled Carbon Steel Flat Products from The 
Netherlands

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

ACTION: Notice of preliminary determination of sales at less than fair 
value.

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

SUMMARY: We preliminarily determine that certain cold-rolled carbon 
steel flat products (``cold-rolled steel'') from the Netherlands are 
being, or likely to be, sold in the United States at less than fair 
value (``LTFV''), as provided in section 733(b) of the Tariff Act of 
1930, as amended.
    Interested parties are invited to comment on this preliminary 
determination. We will make our final determination not later than 75 
days after the date of this preliminary determination.

EFFECTIVE DATE: May 9, 2002.

FOR FURTHER INFORMATION CONTACT: Geoffrey Craig or David Salkeld, AD/
CVD Enforcement Office VI, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-4161 or (202) 482-1168, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    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. In addition, unless 
otherwise indicated, all citations to the Department of Commerce 
(``Department's'') regulations are to 19 CFR Part 351 (April 2001).

Case History

    Since the initiation of this investigation (Notice of Initiation of 
Antidumping Duty Investigations: Certain Cold-Rolled Carbon Steel Flat 
Products From Argentina, Australia, Belgium, Brazil, France, Germany, 
India, Japan, the Netherlands, New Zealand, the People's Republic of 
China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, 
Thailand, Turkey, and Venezuela, 66 FR 54198 (October 26, 2001)) 
(Initiation Notice), the following events have occurred:
    On October 31, 2001, we solicited comments from interested parties 
regarding the criteria to be used for model-matching purposes, and we 
received comments on our proposed matching criteria from petitioners on 
our proposed matching criteria on November 8, 2001. On November 26, 
2002, we informed respondent of our revised model match criteria.
    Corus Staal BV, a Dutch manufacturer of cold-rolled steel and its 
U.S. affiliate, Corus Steel, USA, Inc. (collectively ``Corus''), 
requested in a November 7, 2001, letter that the Department revoke the 
Initiation Notice with respect to the Netherlands. In the alternative, 
Corus asked the Department to amend the Initiation Notice by revising 
the margin alleged by petitioners and to eliminate

[[Page 31269]]

the cost of production (``COP'') investigation. On November 16, 2001, 
petitioners \1\ rebutted Corus' argument that the Department should 
rescind or amend the Initiation Notice. See Request to Revoke 
Initiation section below.
---------------------------------------------------------------------------

    \1\ The petitioners are Bethlehem Steel Corporation, LTV Steel 
Company, Inc., National Steel Corporation, Nocor Corporation, Steel 
Dynamics, Inc., United States Steel LLC and WCI Steel, Inc. 
(collectively, the petitioners).
---------------------------------------------------------------------------

    On November 13, 2001, the United States International Trade 
Commission (``ITC'') preliminarily determined that there is a 
reasonable indication that an industry in the United States is 
materially injured or threatened with material injury by reason of 
imports from Argentina, Australia, Belgium, Brazil, China, France, 
Germany, India, Japan, Korea, the Netherlands, New Zealand, Russia, 
South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela of 
cold-rolled steel products. See Certain Cold-Rolled Steel Products From 
Argentina, Australia, Belgium, Brazil, China, France, Germany, India, 
Japan, Korea, the Netherlands, New Zealand, Russia, South Africa, 
Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, 66 FR 57985 
(November 19, 2001).
    We issued a questionnaire to Corus on November 16, 2001.\2\ The 
petitioners made an allegation of sales below COP in the petition. The 
Statement of Administrative Action (SAA), submitted to the U.S. 
Congress in connection with the interpretation and application of the 
URAA provides that ``new section 773(b)(2)(A) retains the current 
requirement that Commerce have `reasonable grounds to believe or 
suspect' that below cost sales have occurred before initiating such an 
investigation. `Reasonable grounds' exist when an interested party 
provides specific factual information on costs and prices, observed or 
constructed, indicating that sales in the foreign market in question 
are at below-cost prices.'' SAA, H. Doc. 103-316, Vol. 1, 103d Cong., 
2d Session, at 833 (1994). We found ``reasonable grounds to believe or 
suspect'' that there were sales of the foreign like product below the 
COP within the meaning of section 773(b)(2)(A)(i) of the Act. 
Initiation Notice, 66 FR at 54213. Accordingly, the Department 
initiated the requested country-wide cost investigation.
---------------------------------------------------------------------------

    \2\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales, or, if the 
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in 
non-market economy (NME) cases). Section C requests a complete 
listing of U.S. sales. Section D requests the cost of production and 
constructed value related to the merchandise under investigation. 
Section E requests data related to cost of further manufacturing or 
assembly performed in the United States of the merchandise under 
investigation.
---------------------------------------------------------------------------

    Corus submitted its response to the section A questionnaire on 
December 7, 2002, and sections B-E on January 14, 2002. The Department 
issued supplemental questionnaires to Corus on March 6, 2002, March 13, 
2002, April 17, 2002, and April 22, 2002. Corus responded to these 
supplemental questionnaires, except the April 17, 2002, questionnaire, 
and April 22, 2002, questionnaire, by April 3, 2002. The deadline for 
the April 17, 2002, questionnaire is April 26, 2002, and the deadline 
for the April 22, 2002, questionnaire is May 6, 2002.
    On December 7, 2001 and January 14, 2002, the petitioners requested 
that the Department make an expedited finding that critical 
circumstances exist with respect to imports from the Netherlands. The 
Department preliminarily determined that critical circumstances exist 
with respect to imports of cold-rolled steel. See Notice of Preliminary 
Determinations of Critical Circumstances: Certain Cold-Rolled Carbon 
Steel Flat Products From Australia, the People's Republic of China, 
India, the Republic of Korea, the Netherlands, and the Russian 
Federation, 67 FR 19157 (April 18, 2002) (Critical Circumstances 
Notice). On December 19, 2002, Corus submitted a letter regarding the 
Critical Circumstances Notice. As Corus' comments are pursuant to our 
request for comment on the surge analysis contained in the Critical 
Circumstances Notice, we will address Corus' December 19, 2002, letter 
in the final critical circumstances determination.
    On February 22, 2002, the Department published a notice postponing 
the preliminary determination of this investigation until April 26, 
2002. See Postponement of Preliminary Determinations of Antidumping 
Duty Investigations. Certain Cold-Rolled Carbon Steel Flat Products 
from Argentina (A-357-816), Australia (A-602-804), Belgium (A-423-811), 
Brazil (A-351-834), the People's Republic of China (A-570-872), France 
(A-427-822), Germany (A-428-834), India (A-533-826), Japan (A-588-859), 
Korea (A-580-848), the Netherlands (A-421-810), New Zealand (A-614-
803), Russia (A-821-815), South Africa (A-791-814), Spain (A-469-812), 
Sweden (A-401-807), Taiwan (A-583-839), Thailand (A-549-819), Turkey 
(A-489-810) and Venezuela (A-307-822), 67 FR 8227 (February 22, 2002).

Request to Revoke Initiation

    On November 7, 2001, Corus submitted a letter stating that the 
petition upon which the Initiation Notice was based was deficient in 
that it did not include very specific information, ``reasonably 
available,'' as required by the Department's regulations (19 CFR 
351.202(b)(7)), the statute (section 732(b)(1) of the Act), and U.S. 
international obligations (Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade (1994) at Article 5.2). 
Corus argues that the alleged dumping margin was computed from a non-
representative subset of Dutch import values on the U.S. side, and from 
constructed value data based on non-Dutch and non-Corus specific cost 
data on the home market side. Further, Corus argues that the petition 
ignored COP data that Corus served to petitioners' counsel in the 
recently completed hot-rolled steel investigation. Corus argues that 
the Department has the obligation and authority to revoke, or in the 
alternative, amend the margin contained in the Initiation Notice and 
rescind the sales-below-cost investigation.
    Petitioners responded in a November 16, 2001, letter that the 
Department should deny Corus' request because there is no requirement 
that the Department rescind or amend a notice of initiation because a 
petitioner did not utilize all information ``reasonably available'' to 
it. Petitioners contravene Corus'' argument that it should have used 
certain public information from the hot-rolled steel investigation on 
the basis that said data was ``unverified, uncorrected, and 
inaccurate.''
    We agree with petitioners that we should not rescind the instant 
investigation. As detailed in the ``Initiation Checklist,'' we examined 
the data used by petitioners to calculate the alleged dumping margin. 
We stated that, ``Based on an examination of the information submitted 
in the petition, adjusted where appropriate, and comparing export price 
(``EP'') to constructed value (``CV''), we have determined that, for 
purposes of this initiation, there is a reasonable basis to believe or 
suspect that dumping has occurred.'' Initiation Notice 66 FR at 54209 
(emphasis added). Moreover, Corus does not take issue with the fact 
that the petition contains ``information reasonably available,'' as 
required by section 702(c)(1)(A) of the Act. Corus' assertion that 
there is additional public information reasonably available which 
petitioner did not use to calculate the

[[Page 31270]]

alleged margin does not render the petition insufficient.
    Corus argues that, as an alternative to revoking the initiation, we 
should amend the margin contained in the petition. However, the alleged 
margin (assuming it is above de minimis or zero) is relevant only 
inasmuch as it is sufficient to initiate the investigation. We stated 
in the Initiation Notice, 66 FR at 54205 that, ``Should the need arise 
to use any of this information as facts available under section 776 of 
the Act in our preliminary or final determinations, we may re-examine 
the information and revise the margin calculations, if appropriate.'' 
In the instant investigation, we have not used facts available to 
calculate the margin for the preliminary determination. Thus, there is 
no further relevance to the petition margin.

Scope of Investigation

    For purposes of this investigation, the products covered are 
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel 
products. For a full description of the scope of this investigation, as 
well as a complete discussion of all scope exclusion requests submitted 
in the context of the on-going cold-rolled steel investigations, please 
see the ``Scope Appendix'' attached to the Notice of Preliminary 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Carbon Steel Flat Products from Argentina, published concurrently with 
this preliminary determination.

Selection of Respondent

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of 
subject merchandise. Where it is not practicable to examine all known 
producers/exporters of subject merchandise, section 777(A)(c)(2) of the 
Act permits the Department to investigate either (1) a sample of 
exporters, producers, or types of products that is statistically valid 
based on the information available at the time of selection, or (2) 
exporters and producers accounting for the largest volume of the 
subject merchandise that can reasonably be examined. Using company-
specific export data for the period of investigation (``POI''), which 
we obtained from a variety of sources under the Harmonized Tariff 
Schedule of the United States (HTSUS) number that corresponds to the 
subject merchandise, we found that thirteen producers/exporters may 
have exported cold-rolled steel to the United States during the POI. 
According to data on the record, Corus was the largest exporter/
producer of imports during the POI. Due to limited resources, we 
determined that we could only investigate this one largest producer/
exporter. On November 29, 2001, we confirmed our selection of Corus, 
the largest producer/exporter of cold-rolled steel from the 
Netherlands, as the sole mandatory respondent in this proceeding. See 
Memorandum from James Terpstra to Melissa Skinner, ``Antidumping Duty 
Investigation of Cold-Rolled Carbon Steel Flat Products from the 
Netherlands--Selection of Respondents,'' dated November 29, 2001, on 
file in the Central Records Unit (``CRU''), room B-099, of the 
Department's main building.

Period of Investigation

    The POI is July 1, 2000, through June 30, 2001. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of the filing of the petitioners (i.e., September 2001).

Fair Value Comparisons

    To determine whether sales of cold-rolled steel from the 
Netherlands to the United States were made at LTFV, we compared the 
constructed export price (``CEP'') to the normal value (``NV''), as 
described in the ``Constructed Export Price'' and ``Normal Value'' 
sections of this notice, below. In accordance with section 
777A(d)(1)(A)(i) of the Act, we compared POI weighted-average CEPs to 
POI weighted-average NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by Corus in the home market during the POI 
that fit the description in the ``Scope of Investigation'' section of 
this notice to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We compared U.S. sales 
to sales made in the home market, where appropriate. 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. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
the respondents in the following order of importance: hardening and 
tempering; painted; carbon level; quality; yield strength; minimum 
thickness; thickness tolerance; width; edge finish; form; temper 
rolling; leveling; annealing; and surface finish.

Constructed Export Price

    Corus reported as CEP transactions its sales of subject merchandise 
sold through Rafferty-Brown Steel Company of Connecticut and Rafferty-
Brown Steel Company of North Carolina (collectively, ``RBN''), two 
affiliated steel service centers which further manufacture flat-rolled 
steel products.
    Corus reported the remaining sales as EP transactions which it 
described as ``direct sales.'' These reported EP sales were shipped 
from Corus to the unaffiliated U.S. customer. For these reported EP 
sales, Corus' U.S. affiliate, Corus USA (``CSUSA''), acted as a selling 
agent. We have preliminarily reclassified Corus'' reported EP sales as 
CEP sales, because the agreement for sale occurred in the United States 
between CSUSA and the unaffiliated customer. CSUSA provides the final 
written confirmation of the agreement, establishing the agreed prices 
and quantities, to the U.S. customer. Thus, in accordance with section 
772(b) of the Act, we calculated CEP for all of Corus' U.S. sales 
because the merchandise was sold (or agreed to be sold) in the United 
States before or after the date of importation by a seller affiliated 
with the producer or exporter, to a purchaser not affiliated with the 
producer or exporter. For further discussion, see Memorandum from 
Geoffrey Craig to James Terpstra, ``Preliminary Determination 
Calculation Memorandum-Corus Staal BV'' dated April 26, 2002 
(``Calculation Memo''). This reclassification is consistent with the 
Department's recent determination in the LTFV investigation of hot-
rolled steel from the Netherlands, in which Corus was a respondent. See 
Notice of Final Determination of Sales at Less Than Fair Value; Certain 
Hot-Rolled Carbon Steel Flat Products From The Netherlands, 66 FR 50408 
(October 3, 2001).
    We based CEP on the packed CIF, ex-factory, FOB, or delivered 
prices to the first unaffiliated customer in, or for exportation to, 
the United States. Where appropriate, we reduced these prices to 
reflect discounts. We deducted billing adjustments (upward adjustments 
were reported as negative amounts and downward adjustments to the gross 
unit price were reported as positive amounts). We added to the gross 
unit price an amount equal to the freight revenue that Corus received 
from U.S. customers as reimbursement for freight expenses.
    In accordance with section 772(c)(2) of the Act, we made 
deductions, where appropriate, for movement expenses including inland 
freight from plant to

[[Page 31271]]

port of exportation, foreign brokerage, handling and loading charges, 
international freight, marine insurance, U.S. duties, and U.S. inland 
freight expenses (freight from port to the customer).
    For CEP, in accordance with section 772(d)(1) of the Act, where 
appropriate, we deducted from the starting price those selling expenses 
that were incurred in selling the subject merchandise in the United 
States, including direct selling expenses (cost of credit and 
warranties). In addition, we deducted indirect selling expenses that 
related to economic activity in the United States. These expenses 
include certain indirect selling expenses incurred by Corus' U.S. 
affiliates, CSUSA and RBN. We also deducted from CEP an amount for 
profit in accordance with sections 772(d)(3) and (f) of the Act. In 
accordance with section 772(f) of the Act, we calculated the CEP profit 
rate using the expenses incurred by Corus and its affiliates on their 
sales of the subject merchandise in the United States and the foreign 
like product in the home market and the profit associated with those 
sales.
    We deducted the cost of further manufacturing for sales of subject 
merchandise to which value was added in the United States by RBN prior 
to sale to unaffiliated customers, in accordance with section 772(d)(2) 
of the Act.
    We also recalculated the imputed credit expense for those sales for 
which Corus has not received payment. On December 19, 2001, Corus 
requested that it be exempt from reporting sales by two affiliated U.S. 
re-sellers, GalvPro LP (``GalvPro'') and Apollo Metals, to the first 
unaffiliated customer. Corus, instead, reported sales by Corus to 
GalvPro and by RBN to Apollo Metals. With respect to sales by Apollo 
Metals, consistent with our past practice, because the volume of these 
sales was very small, we are granting Corus' request. See Preliminary 
Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled 
Carbon-Quality Steel Products From Japan, 64 FR 8291, 8295 (February 
19, 1999) (unchanged in the final determination). With respect to 
GalvPro, we are in the process of obtaining additional information in 
order to decide whether Corus must report sales by GalvPro. See 
Calculation Memo.

Normal Value

A. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared the respondent's volume of home market sales 
of the foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act. 
Because the respondent's aggregate volume of home market sales of the 
foreign like product was greater than five percent of its aggregate 
volume of U.S. sales for the subject merchandise, we determined that 
the home market was viable.

A. Arm's Length Test

    Sales to affiliated customers for consumption in the home market 
which were determined not to be at arm's length were excluded from our 
analysis. To test whether these sales were made at arm's length, we 
compared the prices of sales of comparison products to affiliated and 
unaffiliated customers, net of all movement charges, direct selling 
expenses, discounts, and packing. Pursuant to 19 CFR 351.403(c) and in 
accordance with our practice, where the prices to the affiliated party 
were on average less than 99.5 percent of the prices to unaffiliated 
parties, we determined that the sales made to the affiliated party were 
not at arm's length. See e.g., Notice of Final Results and Partial 
Rescission of Antidumping Duty Administrative Review: Roller Chain, 
Other Than Bicycle, From Japan, 62 FR 60472, 60478 (November 10, 1997), 
and Antidumping Duties; Countervailing Duties: Final Rule 
(``Antidumping Duties''), 62 FR 27295, 27355-56 (May 19, 1997). We 
included in our NV calculations those sales to affiliated customers 
that passed the arm's-length test in our analysis. See 19 CFR 351.403; 
Antidumping Duties, 62 FR at 27355-56.

B. Cost of Production Analysis

    Based on our analysis of an allegation contained in the petition, 
we found that there were reasonable grounds to believe or suspect that 
sales of cold-rolled steel in the home market were made at prices below 
their COP. Accordingly, pursuant to section 773(b) of the Act, we 
initiated a country-wide sales-below-cost investigation to determine 
whether sales were made at prices below their respective COP (see 
Initiation Notice at 66 FR 54209).
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus an amount for general and administrative 
expenses (``G&A''), including interest expenses, and home market 
packing costs (see ``Test of Home Market Sales Prices'' section below 
for treatment of home market selling expenses).
2. Test of Home Market Sales Prices
    On a product-specific basis, we compared the adjusted weighted-
average COP to the home market sales of the foreign like product, as 
required under section 773(b) of the Act, in order to determine whether 
the sale prices were below the COP. The prices were exclusive of any 
applicable movement charges, rebates, discounts, and direct and 
indirect selling expenses. In determining whether to disregard home 
market sales made at prices less than their COP, we examined, in 
accordance with sections 773(b)(1)(A) and (B) of the Act, whether such 
sales (1) were made within an extended period of time in substantial 
quantities, and (2) at prices which permitted the recovery of all costs 
within a reasonable period of time.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of the 
respondent's sales of a given product are at prices less than the COP, 
we do not disregard any below-cost sales of that product, because we 
determine that in such instances the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product during the POI are at prices less than the 
COP, we determine that in such instances the below-cost sales represent 
``substantial quantities'' within an extended period of time, in 
accordance with section 773(b)(1)(A) of the Act. In such cases, we also 
determine whether such sales were made at prices which would not permit 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(1)(B) of the Act.
    We found that, for certain specific products, more than 20 percent 
of Corus's home market sales were at prices less than the COP and, in 
addition, such sales did not provide for the recovery of costs within a 
reasonable period of time. We therefore excluded these sales and used 
the remaining sales, if any, as the basis for determining NV, in 
accordance with section 773(b)(1) of the Act.

D. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on delivered prices to unaffiliated 
customers or prices to affiliated customers that we determined to be at 
arm's-length. We

[[Page 31272]]

made deductions, where appropriate, from the starting price for early 
payment discounts, rebates, and billing adjustments (downward 
adjustments were reported as positive values and upward adjustments 
were reported as negative values). We made a change to the reported 
rebate variable, to account for the fact that for certain observations 
Corus inadvertently reported billing adjustments as rebates. We also 
made deductions for movement expenses, including inland freight (from 
the factory to the point at which the merchandise leaves Corus' 
premises, plant to customer, and affiliated reseller to customer) under 
section 773(a)(6)(B)(ii) of the Act. In addition, we made adjustments 
under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for 
differences in circumstances of sale (``COS'') for imputed credit 
expenses and inventory carrying cost.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411. We also deducted home market packing costs and added 
U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of 
the Act.
    In a December 19, 2002 letter, Corus requested that it be exempted 
from reporting downstream sales by Multisteel, an affiliated service 
center in the Netherlands due to the small quantity of sales involved 
and burden placed on Multisteel to report these sales. According to 19 
CFR 351.403(d), downstream sales by home market affiliates accounting 
for less than five percent of total sales are normally excluded from 
the NV calculation. See also section 773(a)(5) of the Act. Because the 
sales by Multisteel meet the five percent threshold, we are exempting 
Corus from reporting sales by Multisteel. For a further discussion, see 
Calculation Memo.

E. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP or CEP transaction. Sales are 
made at different LOTs if they are made at different marketing stages 
(or their equivalent). See 19 CFR 351.412(c)(2). Substantial 
differences in selling activities are a necessary, but not sufficient, 
condition for determining that there are differences in the stages of 
marketing. Id.; see also Notice of Final Determination of Sales at Less 
Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South 
Africa, 62 FR 61731, 61732 (November 19, 1997). In order to determine 
whether the comparison sales were at different stages in the marketing 
process than the U.S. sales, we reviewed the distribution system in 
each market (i.e., the ``chain of distribution''), \3\ including 
selling functions, \4\ class of customer (``customer category''), and 
the level of selling expenses for each type of sale.
---------------------------------------------------------------------------

    \3\ The marketing process in the United States and comparison 
markets begins with the producer and extends to the sale to the 
final user or consumer. The chain of distribution between the two 
may have many or few links, and the respondent's sales occur 
somewhere along this chain. In performing this evaluation, we 
considered the narrative responses of the respondent to properly 
determine where in the chain of distribution the sale appears to 
occur.
    \4\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of this preliminary determination, 
we have organized selling functions into four major categories: 
sales process and marketing support, freight and delivery, inventory 
and warehousing, and quality assurance/warranty services.
---------------------------------------------------------------------------

    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales (i.e., NV based on 
either home market or third country prices \5\), we consider the 
starting prices before any adjustments. For CEP sales, we consider only 
the selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F.3d 1301, 1316 (Fed. Cir. 
2001).
---------------------------------------------------------------------------

    \5\ Where NV is based on CV, we determine the NV LOT based on 
the LOT of the sales from which we derive selling expenses, G&A and 
profit for CV, where possible.
---------------------------------------------------------------------------

    When the Department is unable to find sales of the foreign like 
product in the comparison market at the same LOT as the EP or CEP, the 
Department may compare the U.S. sale to sales at a different LOT in the 
comparison market. In comparing EP or CEP sales at a different LOT in 
the comparison market, where available data make it practicable, we 
make a LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if a NV LOT is more remote from the factory than 
the CEP LOT and there is no basis for determining whether the 
difference in LOTs between NV and CEP affected price comparability 
(i.e. no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 
(November 19, 1997).
    We obtained information from Corus regarding the marketing stages 
involved in making the reported home market and U.S. sales, including a 
description of the selling activities performed by Corus for each 
channel of distribution.
    Corus reported home market sales through one channel of 
distribution (direct sales to the customer) and to two customer 
categories: end users and steel service centers. We examined the chain 
of distribution and the selling activities associated with sales 
reported by Corus to each of its customer categories in the home 
market. The information on the record demonstrates that Corus performs 
the same selling functions across customer categories. See Corus' March 
27, 2002, submission at Exhibit A-8. Specifically, Corus indicated that 
to all home market customers, it provides: a high level of strategic 
and economic planning; a low level of freight/delivery arrangements, a 
low level of inventory and warehousing support, and a high level of 
quality assurance/warranty services. The only selling function in which 
there is a discernible difference is market research. Because Corus 
performs essentially identical selling functions, regardless of 
customer category, we have preliminarily determined that one LOT exists 
for Corus' home market sales.
    In the U.S. market, Corus reported two channels of distribution for 
sales of subject merchandise during the POI (EP sales made directly 
from Corus to the U.S. customer and CEP sales made through affiliated 
service centers). For sales made directly by Corus, there were two 
customer categories (end users and steel service centers). As explained 
in the Constructed Export Price section above, we have reclassified 
reported EP sales as CEP sales.
    In CEP situations, we do not determine the U.S. LOT on the basis of 
the CEP starting price. Rather, as described above, we determine the 
U.S. LOT on the basis of the CEP starting price minus the expenses and 
profit deducted pursuant to section 772(d) of the Act. For both 
channels of distribution, Corus performed similar selling functions, 
including strategic and economic planning, market research, technical/
warranty services, and engineering/R&D/product development services. 
The remaining selling functions did not differ significantly by channel 
of distribution. Corus stated that it treats its affiliated U.S. 
service centers ``in the same manner as all other U.S. customers for 
all purposes.'' Corus Section A response at A-29 (public version). 
Corus also stated that its description of selling functions for 
reported EP sales ``should be considered as containing the information 
requested for Corus'' sales

[[Page 31273]]

to its affiliated U.S. customers.'' Id. Because channels of 
distribution do not qualify as separate LOTs when the selling functions 
performed for each channel are sufficiently similar, we have determined 
that one LOT exists for Corus' U.S. sales.
    With regard to its reported CEP sales, respondent claims that a CEP 
offset is necessary because the RBN sales are made at a point in the 
distribution process that is less advanced than Corus' home market 
sales. As set forth in 19 CFR 351.412(f), a CEP offset will be granted 
where (1) normal value is compared to CEP sales, (2) normal value is 
determined to be at a more advanced LOT than the LOT of the CEP, and 
(3) despite the fact that the party has cooperated to the best of its 
ability, the data available do not provide an appropriate basis to 
determine whether the difference in LOT affects price comparability.
    In analyzing Corus' request for a CEP offset, we found there to be 
few differences in the selling functions performed by Corus on sales to 
its affiliated importers and those performed for sales in the home 
market. We note that Corus performs the following functions to the same 
degree for both the CEP and home market LOT: strategic and economic 
planning; market research; technical services, and engineering/R&D/
product development services. We have preliminarily determined that the 
record does not support Corus' claim that home market sales are at a 
different, more advanced LOT than the adjusted CEP sales. Thus, we are 
not granting a CEP offset.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our final determination.

Final Critical Circumstances Determination

    We will make a final determination concerning critical 
circumstances for the Netherlands when we make our final determination 
regarding sales at LTFV in this investigation, which will be no later 
than 75 days (unless postponed) after this preliminary determination.

Suspension of Liquidation

    Because of our preliminary affirmative critical circumstances 
finding, we are directing the U.S. Customs Service to suspend 
liquidation of all entries of cold-rolled steel entered, or withdrawn 
from warehouse, for consumption on or after the date which is 90 days 
prior to the date on which this notice is published in the Federal 
Register (see Critical Circumstances Notice). We are instructing the 
U.S. Customs Service to require a cash deposit or the posting of a bond 
equal to the weighted-average amount by which the NV exceeds the CEP, 
as indicated in the chart below. These instructions suspending 
liquidation will remain in effect until further notice.The weighted-
average dumping margins are provided below:

------------------------------------------------------------------------
                                                              Weighted-
                                                               Average
                   Exporter/Manufacturer                        Margin
                                                              Percentage
------------------------------------------------------------------------
Corus Staal BV.............................................         6.38
All Others.................................................         6.38
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
pursuant to section 735(b)(2) of the Act, the ITC will determine within 
45 days after our final determination whether these imports are 
materially injuring, or threaten material injury to, the U.S. industry.

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

Public Comment

    Case briefs for this investigation must be submitted to the 
Department no later than seven days after the date of the final 
verification report issued in this proceeding. Rebuttal briefs must be 
filed five days from the deadline date for case briefs. A list of 
authorities used, a table of contents, and an executive summary of 
issues should accompany any briefs submitted to the Department. 
Executive summaries should be limited to five pages total, including 
footnotes. Public versions of all comments and rebuttals should be 
provided to the Department and made available on diskette.
    Section 774 of the Act provides that the Department will hold a 
public hearing to afford interested parties an opportunity to comment 
on arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by an interested party. If a request for a hearing 
is made in this investigation, the hearing will tentatively be held two 
days after the rebuttal brief deadline date at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC. 
20230. Parties should confirm by telephone the time, date, and place of 
the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs.
    We will make our final determination no later than 75 days after 
this preliminary determination.
    This determination is issued and published pursuant to sections 
733(f) and 777(i) of the Act.

    Dated: April 26, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-11200 Filed 5-8-02; 8:45 am]
BILLING CODE 3510-DS-P