Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61731

withdrawn from warehouse, for

consumption on or after the date on

which the ITC published its notice of

final determination of threat of material

injury in the Federal Register are liable

for the assessment of antidumping

duties. Accordingly, the Department

will direct the Customs Service to

terminate the suspension of liquidation

for entries of collated roofing nails

imported from Taiwan entered, or

withdrawn from warehouse, for

consumption before the date on which

the ITC published its notice of final

determination of threat of material

injury in the Federal Register, and to

release any bond or other security, and

refund any cash deposit, posted to

secure the payment of estimated

antidumping duties with respect to

these entries.

In accordance with section 736 of the

Act, the Department will direct United

States Customs officers to assess, upon

further advice by the administering

authority pursuant to section 736(a)(1)

of the Act, antidumping duties equal to

the amount by which the normal value

of the merchandise exceeds the export

price or constructed export price of

merchandise for all relevant entries of

CRN from Taiwan except for imports

manufactured and exported by Unicatch

or Lei Chu. All bonds may be released

and entries of Unicatch and Lei Chu

may be liquidated without regard to

antidumping duties. For all other

manufacturers/exporters antidumping

duties will be assessed on all

unliquidated entries of CRN from

Taiwan entered, or withdrawn from

warehouse, for consumption on or after

the date on which the ITC published its

final affirmative determination notice in

the Federal Register. On or after the

date of publication of this notice in the

Federal Register, U.S. Customs officers

must require, at the same time as

importers would normally deposit

estimated duties, the following cash

deposits for the subject merchandise:

The ad valorem weighted-average

dumping margins are as follows:

Manufacturer/producer/exporter

Revised

weighted-average

margin

percentage

S&J Wire Products Company, Ltd./

New Lan Lung ............................. 2.98

Romp Coil Nail Industries ............... 40.28

K. Ticho ........................................... 40.28

All Others ........................................ 2.98

This notice constitutes the

antidumping duty order with respect to

CRN from Taiwan, pursuant to section

736 (a) of the Act. Interested parties may

contact the Central Records Unit, Room

B–099 of the Main Commerce Building,

for copies of an updated list of

antidumping duty orders currently in

effect.

This order is published pursuant to

section 736 (a) of the Act (19 USC 1673e

(a)) and 19 CFR 353.21.

Dated: November 17, 1997.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–30400 Filed 11–18–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration A–

791–804

Notice of Final Determination of Sales

at Less Than Fair Value: Certain Cutto-Length Carbon Steel Plate From

South Africa

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Determination of

Sales at Less Than Fair Value.

EFFECTIVE DATE: November 19, 1997.

FOR FURTHER INFORMATION CONTACT:

Charles Rast, Nancy Decker, or Linda

Ludwig, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–5811, (202) 482–0196, and

(202) 482–3833, respectively.

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Act)

by the Uruguay Rounds Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department’s regulations are in

reference to the regulations, codified at

19 CFR Part 353, as they existed on

April 1, 1996.

Final Determination

We determine that certain cut-tolength carbon steel plate (CTL plate)

from South Africa is being, or is likely

to be, sold in the United States at less

than fair value (LTFV), as provided in

section 735 of the Act.

Case History

Since the preliminary determination

in this investigation (Preliminary

Determination of Sales at Less Than Fair

Value and Postponement of Final

Determination: Certain Cut-to-Length

Carbon Steel Plate From South Africa,

62 FR 31963 (June 11, 1997)), the

following events have occurred:

In July and August 1997, we verified

the respondents’ questionnaire

responses. On August 22, 1997 and

September 3, 1997, the Department

issued its reports on verification

findings for Iscor Ltd. (Iscor). On August

25, 1997 and September 15, 1997, the

Department issued its reports on

verification findings for Highveld Steel

and Vanadium Corporation Ltd.

(Highveld). On September 22, 1997,

respondents submitted new computer

sales listings which included data

corrections identified through

verification. Petitioners and respondents

submitted case briefs on September 15,

1997, and rebuttal briefs on September

22, 1997. A public hearing was not held.

Scope of Investigation

The products covered by this

investigation are hot-rolled iron and

non-alloy steel universal mill plates

(i.e., flat-rolled products rolled on four

faces or in a closed box pass, of a width

exceeding 150 mm but not exceeding

1250 mm and of a thickness of not less

than 4 mm, not in coils and without

patterns in relief), of rectangular shape,

neither clad, plated nor coated with

metal, whether or not painted,

varnished, or coated with plastics or

other nonmetallic substances; and

certain iron and non-alloy steel flatrolled products not in coils, of

rectangular shape, hot-rolled, neither

clad, plated, nor coated with metal,

whether or not painted, varnished, or

coated with plastics or other

nonmetallic substances, 4.75 mm or

more in thickness and of a width which

exceeds 150 mm and measures at least

twice the thickness. Included as subject

merchandise in this petition are flatrolled products of nonrectangular crosssection where such cross-section is

achieved subsequent to the rolling

process (i.e., products which have been

‘‘worked after rolling’’)—for example,

products which have been bevelled or

rounded at the edges. This merchandise

is currently classified in the

Harmonized Tariff Schedule of the

United States (HTS) under item

numbers 7208.40.3030, 7208.40.3060,

7208.51.0030, 7208.51.0045,

7208.51.0060, 7208.52.0000,

7208.53.0000, 7208.90.0000,

7210.70.3000, 7210.90.9000,

7211.13.0000, 7211.14.0030,

7211.14.0045, 7211.90.0000,

7212.40.1000, 7212.40.5000,

7212.50.0000. Excluded from the subject
61732 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

merchandise within the scope of the

petition is grade X–70 plate. Although

the HTS subheadings are provided for

convenience and Customs purposes, our

written description of the scope of this

investigation is dispositive.

Period of Investigation

The period of investigation (POI) is

October 1, 1995, through September 30,

1996.

Fair Value Comparisons

To determine whether sales of the

subject merchandise by respondents to

the United States were made at less than

fair value, we compared the Export

Price (EP) or Constructed Export Price

(CEP), where appropriate, to the Normal

Value (NV), as described in the ‘‘Export

Price’’ and ‘‘Normal Value’’ sections of

this notice. In accordance with section

777A(d)(1)(A)(i) of the Act, we

compared the weighted average EPs or

CEPs to weighted-average NVs during

the POI. In determining averaging

groups for comparison purposes, we

considered the appropriateness of such

factors as physical characteristics and

level of trade.

(i) Physical Characteristics

In accordance with section 771(16) of

the Act, we considered all products

covered by the description in the

‘‘Scope of Investigation’’ section of this

notice, produced in South Africa by the

respondents and sold in the home

market during the POI, to be foreign like

products for purposes of determining

appropriate product comparisons to

U.S. sales. Where there were no sales of

identical merchandise in the home

market to compare to U.S. sales, we

compared U.S. sales to the most similar

foreign like product on the basis of the

characteristics listed in the

Department’s antidumping

questionnaire. In making the product

comparisons, we relied on the following

criteria (listed in order of preference):

paint, quality, specification and/or

grade, heat treatments, standard

thickness, standard width, whether or

not checkered, and descaling. It is our

practice where sales were made in the

home market on a different weight basis

from the U.S. market (theoretical versus

actual weight) to convert all quantities

to the same weight basis, using the

conversion factors supplied by the

respondents, before making our fairvalue comparisons. (See Final

Determination of Sales at Less Than Fair

Value: Cut-to-Length Carbon Steel Plate

from Finland, 58 FR 37122 (July 9,

1993) and Final Determination of Sales

at Less Than Fair Value: Certain Welded

Stainless Steel Pipes from Taiwan, 57

FR 53705 (November 12, 1992).) For

Iscor, we found that it did not properly

report a weight conversion factor. In

order that all price comparisons be

made on the same weight basis, we

converted Iscor’s reported home market

and U.S. prices, quantities and costs, as

appropriate, based on information on

the record (see Comment 10 of the

‘‘Interested Party Comments’’ section of

this notice).

(ii) Level of Trade

To the extent practicable, we

determine normal value for sales at the

same level of trade as the U.S. sales

(either EP or CEP). When there are no

sales at the same level of trade we

compare U.S. sales to home market (or,

if appropriate third country) sales at a

different level of trade. For both EP and

CEP, the relevant transaction for level of

trade is the sale from the exporter to the

importer. While the starting price for

CEP is that of a subsequent resale to an

unaffiliated buyer, the construction of

the EP results in a price that would have

been charged if the importer had not

been affiliated. We calculate the CEP by

removing from the first resale to an

independent U.S. customer expenses

and the profit associated with those

expenses under section 772(d) of the

Act. These expenses represent activities

undertaken by, or on behalf of, the

affiliated importer. Because the

expenses deducted under section 772(d)

represent selling activities in the United

States, the deduction of these expenses

normally yields a different level of trade

for the CEP than for the later resale

which is used for the starting price.

Movement charges, and duties and taxes

deducted under section 772(c) of the

Act do not represent activities of the

affiliated importer and we do not

remove them to obtain the CEP level of

trade. The NV level of trade is that of

the starting price of sales in the home

market. When NV is based on

constructed value, the level of trade is

that of the sales from which we derive

SG&A and profit.

To determine whether home market

sales are at a different level of trade than

U.S. sales, we examine whether the

home market sales are at different stages

in the marketing process than the U.S.

sales. The marketing process in both

markets begins with goods being sold by

the producer and extends to the sale to

the final user. The final user could be

an individual consumer or an industrial

user, but the marketing process for all

goods starts with a producer and ends

with a user. The chain of distribution

between the two may have many or few

links, and the respondent’s sales occur

somewhere along this chain. In the

United States, the respondent’s sales are

generally to an importer, whether

independent or affiliated. We review

and compare the distribution systems in

the home market and U.S. export

markets, including selling functions,

class of customer, and the extent and

level of selling expenses for each

claimed level of trade. Customer

categories such as distributor, original

equipment manufacturer (OEM), or

wholesaler are useful as they are

commonly used by respondents to

describe levels of trade, but, without

substantiation, they are insufficient to

establish that a claimed level of trade is

valid. An analysis of the chain of

distribution and of selling functions

substantiates or invalidates claimed

customer classifications based on levels

of trade. If the claimed levels are

different, the selling functions

performed in selling to those levels

should also be different. Conversely, if

levels of trade are nominally the same,

the selling functions performed should

also be the same. Different levels of

trade necessarily involve differences in

selling functions, but differences in

selling functions, even substantial ones,

are not alone sufficient to establish a

difference in the level of trade. Different

levels of trade are characterized by

purchasers at different places in the

chain of distribution and sellers

performing qualitatively or

quantitatively different functions in

selling to them.

When we compare U.S. sales to home

market sales at a different level of trade,

we make a level-of-trade adjustment if

the difference in level of trade affects

price comparability. We determine any

effect on price comparability by

examining sales at different levels of

trade in a single market, the home

market. Any price effect must be

manifested in a pattern of consistent

price differences between home market

sales used for comparison and sales at

the equivalent level of trade of the

export transaction. To quantify the price

differences, we calculate the difference

in the average of the net prices of the

same models sold at different levels of

trade. We use net prices because any

difference will be due to differences in

level of trade rather than other factors.

We use the average difference in net

prices to adjust the NV when it is based

on a level of trade different from that of

the export sale. If there is a pattern of

no price differences, then the difference

in level of trade does not have a price

effect, and no adjustment is necessary.

In terms of granting a CEP offset, the

statute also provides for an adjustment

to NV if NV is established at a level of

trade that is different from that of the
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61733

CEP, provided the NV level is more

remote from the factory and we are

unable to determine whether the

difference in levels of trade affects the

price comparability between the CEP

and NV. This latter situation can occur

where there is no home market level of

trade equivalent to the U.S. sales level

or where there is an equivalent home

market level, but the data are

insufficient to support a conclusion on

price effect. The CEP offset is the lower

of: (1) the indirect selling expenses on

the home market sale; or (2) the indirect

selling expenses deducted from the

starting price in calculating CEP. The

CEP offset is not automatic each time

export price is constructed. It is only

applicable when the level of trade of the

home market sales used for NV are more

advanced than the level of trade of the

CEP and there is not an appropriate

basis for determining whether there is

an affect on price comparability.

Iscor did not claim a difference in

level of trade. Consistent with our

findings in the preliminary

determination, for this final

determination we have treated all of

Iscor’s home market and U.S. sales as

being at a single level of trade and we

have made no level of trade adjustment

when matching its U.S. sales to home

market sales.

Highveld claimed for the preliminary

determination of this investigation, that

its sales in the home market were made

at two different levels of trade, and that

all of its U.S. sales (both EP and CEP)

were made at one level of trade. Based

on our analysis of selling functions

performed by Highveld, we found that

a single level of trade existed in each

market.

For this final determination Highveld

argued that its sales in the home market

were at a different, more remote, level

of trade that its sales to the United

States. Highveld has asserted that its

sales in the home market were at a

different stage in the marketing process

than its CEP sales in the United States

because they were to a different class of

customer, and that the selling functions

performed by Highveld were both

qualitatively and quantitatively different

between its home market and U.S. sales.

Accordingly, because its home market

sales are at a different, more remote,

LOT than its sales to the United States,

and because the Department cannot

quantify whether the different LOTs

affect price comparability, Highveld

claims it should be granted a CEP offset.

Petitioners dispute Highveld’s

arguments that sales in the home market

are more remote than its U.S. sales and

that steel service centers and

distributors are at different stages in the

marketing process. Petitioners also

argue that many of the selling functions

described by Highveld are intangible,

and because there is neither a

quantitative or qualitative difference in

selling functions performed in the two

markets, Highveld should not be granted

a CEP offset.

In determining whether separate

levels of trade actually existed between

the U.S. and home markets, we

examined Highveld’s marketing stages.

In reviewing the chains of distribution

and customer categories reported in the

home market and in the United States,

we are unable to make clear distinctions

between different stages of the

marketing process claimed by Highveld.

Based on our review of the selling

functions in the U.S. and home markets,

the distinctions are not sufficient to

constitute a difference in level of trade

between sales in the two markets. As a

result, we have not granted Highveld a

CEP offset. See Comment 23 for a more

complete discussion of this issue.

Export Price

We calculated the price of U.S. sales

based on EP, in accordance with section

772(a) of the Act, when the subject

merchandise was sold to unaffiliated

purchasers in the United States prior to

the date of importation. In certain

instances, however, we determined that

CEP as defined in section 772(b) of the

Act was a more appropriate basis for the

price of the U.S. sales. These instances

involved sales made by Highveld to its

U.S. affiliate, Newco Steel Trading (NST

or Newco), which negotiates prices and

quantities with its U.S. customers, and

sells the subject merchandise to the U.S.

customers. Newco operates as

Highveld’s exclusive distributor for

sales of the subject merchandise in the

United States, and as such, undertakes

selling activities exceeding those of

processing sales-related documentation.

Specifically, Newco negotiates prices for

particular products with its customers

on a case-by-case basis, pays Highveld

for the product order based on a price

agreement, and takes title to the

merchandise which is physically

transferred to U.S. customers by

common carriers.

For both respondents, we calculated

EP sales based on packed prices to

unaffiliated customers in the United

States. Where appropriate, and pursuant

to sections 772 (a) and (c) of the Act, we

made deductions from the starting price

for foreign inland freight, international

freight, foreign brokerage and handling,

marine insurance, early payment

discounts, pre-sale warehousing

expenses, and U.S. Customs duties.

We calculated CEP based on packed

prices to unaffiliated customers in the

United States. Where appropriate, and

pursuant to sections 772(b) and (c) of

the Act, we made deductions for the

starting price for the foreign inland

freight, foreign brokerage and handling,

international freight, marine insurance,

U.S. Customs duties, survey expenses,

stevedoring and wharfage, commissions,

inventory carrying expenses, credit

expenses, and indirect selling expenses.

We also made an adjustment for the

amount of profit allocated to these

expenses, in accordance with section

772(d)(3) of the Act.

We corrected the respondents’ data

for certain errors and omissions found at

verification and submitted to the

Department. Specifically, for Iscor we

corrected for certain errors and

omissions found at verification as

submitted by the company on

September 22, 1997, and we made

adjustments to U.S. and home market

credit expenses, certain rebates, ocean

freight, and Iscor’s weight conversion

factors based on findings from

verification. See ‘‘Interested Party

Comments’’ section of this notice. For

Highveld, we corrected for certain errors

and omissions found at verification as

submitted by the company on

September 22, 1997, and we made

adjustments to U.S. and home market

credit expenses, marine insurance,

brokerage and handling charges, certain

rebates, survey expenses, stevedoring

and wharfage, inland freight, packing,

U.S. warranty expenses, and certain

direct selling expenses and unreported

U.S. sales. See ‘‘Interested Party

Comments’’ section of this notice.

Normal Value

Based on a comparison of the

aggregate quantity of home-market and

U.S. sales, we determined that the

quantity of the foreign like product sold

in the exporting country was sufficient

to permit a proper comparison with the

sales of the subject merchandise to the

United States, pursuant to section 773(a)

of the Act. Therefore, in accordance

with section 773(a)(1)(B)(i) of the Act,

we based NV on the price which the

foreign like product was first sold for

consumption in the home market, in the

usual commercial quantities and in the

ordinary course of trade. Where

appropriate, we deducted rebates,

discounts, credit, inland freight, pre-sale

warehousing, and packing. We also

made adjustments, where appropriate,

for home-market indirect selling

expenses to offset U.S. commissions in

CEP comparisons. In comparisons to EP

and CEP sales, we increased NV by U.S.

packing costs in accordance with
61734 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

section 773(a)(6)(A) of the Act. We also

made adjustments to NV for physical

differences in merchandise (‘‘difmer’’).

Cost of Production Analysis

As discussed in the preliminary

determination, the Department

conducted an investigation to determine

whether Iscor and Highveld made home

market sales during the POI at prices

below their cost of production (COP)

within the meaning of section 773(b) of

the Act.

A. Calculation of COP

We compared sales of the foreign like

product in the home market with the

model-specific cost of production

figures for the POI. In accordance with

section 773(b)(3) of the Act, we

calculated the COP based on the sum of

the costs of materials and fabrication

employed in producing the foreign like

product plus selling, general and

administrative (SG&A) expenses and all

costs and expenses incidental to placing

the foreign like product in condition

ready for shipment. Based on our

verification of the cost responses for

Highveld, we adjusted the company’s

COP to reflect dimensional cost

differences, correct for overstated

fabrication costs, include the effect of

yield loss on fixed overhead, calculate

interest expense using the company’s

consolidated financial results and

correct for errors in the SG&A rate

calculation. For Iscor we adjusted the

COP to reflect the reclassification

variance on a more product-specific

basis, include certain year-end

adjustments and minor corrections,

account for the difference between

reported costs and those recorded in its

normal accounting records, include

headquarters cost in SG&A, and allocate

G&A over cost of sales.

B. Test of Home Market Prices

In order to test Iscor’s and Highveld’s

home market prices, we compared their

weighted-average COP figures to home

market sales of the foreign like product

as required under section 773(b) of the

Act, in order to determine whether these

sales had been made at prices below the

COP. On a product-specific basis, we

compared the COP to the home market

prices, less any applicable movement

charges, rebates, and direct selling

expenses.

C. Results of the COP Test

Pursuant to section 773(b)(2)(C)(i) of

the Act, where less than 20 percent of

a respondent’s sales of a given product

were at prices less than the COP, we did

not disregard any below-cost sales of

that product because we determined

that the below-cost sales were not made

in ‘‘substantial quantities.’’ Where 20

percent or more of a respondent’s sales

of a given product were at prices less

than the COP, we disregarded the

below-cost sales where such sales were

found to be made at prices which would

not permit the recovery of all costs

within a reasonable period of time (in

accordance with section 773(b)(2)(D) of

the Act). Where all sales of a specific

product were at prices below the COP,

in accordance with section 773(b)(1) of

the Act, we disregarded all sales of that

product, and calculated NV based on

constructed value (CV) in accordance

with section 773(e) of the Act.

D. Calculation of Constructed Value

(CV)

In accordance with section 773(e) of

the Act, we calculated CV based on the

sum of the respondent’s cost of

materials, fabrication, SG&A, interest

expenses, and profit. In accordance with

sections 773(e)(2)(A), we based SG&A

and profit on the amounts incurred and

realized by the respondent in

connection with the production and sale

of the foreign like product in the

ordinary course of trade, for

consumption in the home market. For

selling expenses, we used the weightedaverage home market selling expenses.

Based on our verification of the cost

responses submitted by Iscor, we

adjusted the reported CV for the same

items noted in the COP section above.

Based on our verification of the cost

responses submitted by Highveld, we

adjusted the reported CV for the same

items noted in the COP section above.

Facts Available

Section 776(a)(2) of the Act provides

that ‘‘if an interested party or any other

person—(A) withholds information that

has been requested by the administering

authority; (B) fails to provide such

information by the deadlines for the

submission of the information or in the

form and manner requested, subject to

subsections (c)(1) and (e) of section 782;

(C) significantly impedes a proceeding

under this title; or (D) provides such

information but the information cannot

be verified as provided in section 782(i),

the administering authority * * * shall,

subject to section 782(d), use the facts

otherwise available in reaching the

applicable determination under this

title.’’

In addition, section 776(b) of the Act

provides that, if the Department finds

that an interested party ‘‘has failed to

cooperate by not acting to the best of its

ability to comply with a request for

information,’’ the Department may use

information that is adverse to the

interests of the party as the facts

otherwise available. The statute also

provides that such an adverse inference

may be based on secondary information,

including information drawn from the

petition.

In this case, the Department has

applied partial facts available for

various expenses and adjustments. (See

‘‘Interested Party Comments’’ section of

this notice, comments 9, 10, 22, 31, 33,

and 37.) We have also applied facts

available to account for unreported

sales. (See ‘‘Interested Party Comments’’

section of this notice, comment 28.)

Currency Conversion

For purposes of the preliminary

determination, we made currency

conversions using the official daily

exchange rate in effect on the date of the

U.S. sale. These exchange rates were

derived from actual daily exchange rates

certified by the Federal Reserve Bank of

New York. (See Change in Policy

Regarding Currency Conversions, 61 FR

9434 (March 8, 1996).) Section 773A(a)

of the Act directs the Department to use

a daily exchange rate in order to convert

foreign currencies into U.S. dollars,

unless the daily rate involves a

‘‘fluctuation.’’ In accordance with the

Department’s practice, we have

determined that a fluctuation exists

when the daily exchange rate differs

from a benchmark by 2.25 percent. (See

Change in Policy Regarding Currency

Conversions, 61 FR 9434, 9435 (March

8, 1996).) The benchmark is defined as

the rolling average of rates for the past

40 business days. When we determine

that a fluctuation exists, we substitute

the benchmark for the daily rate, in

accordance with established practice.

Further, section 773A(b) of the Act

directs the Department to allow a 60-day

adjustment period when a currency has

undergone a sustained movement. A

sustained movement has occurred when

the weekly average of actual daily rates

exceeds the weekly average of

benchmark rates by more than five

percent for eight consecutive weeks.

Such an adjustment period is required

only when a foreign currency is

appreciating against the U.S. dollar and

was not applicable in this case.

In this investigation, there were

certain days of the POI for which we

substituted the benchmark for the daily

rate because the daily rate involved a

fluctuation. Consistent with our

findings in the preliminary

determination, for the final

determination we saw no reason in this

case to deviate from established

practice, since South Africa is not a

high-inflation economy, and the decline

in the rand was not so precipitous and
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61735

large as to reasonably preclude the

occurrence of a fluctuation. (See

Comment 14 of the ‘‘Interested Party

Comments’’ section of this notice.)

Verification

As provided in section 782(i) of the

Act, we verified the information

submitted by Iscor and Highveld for use

in our final determination. We used

standard verification procedures,

including examination of relevant

accounting and sales/production

records and original source documents

provided by respondents.

Interest Party Comments

Comment 1

Petitioners state that the Department

should correct for the errors Iscor

reported on the first day of verification.

Iscor reported that the submission

contained an error in the calculation of

the tonnage allocation factor that it used

to calculate the variable and fixed cost

adjustments and the company’s total

variance. According to the petitioners,

these corrections are necessary because

Iscor’s errors effect the differences in

merchandise adjustments and the 20%

test for product matching. In addition,

petitioners state that Iscor omitted yearend cost adjustments from its reported

costs. According to the petitioners, these

year-end adjustments are costs that

relate to the whole period. Thus, the

Department should also correct for this

omission for the final determination.

Iscor concurs with the petitioners in

that the Department should adjust the

company’s submitted COP and CV

figures for this error and omission.

Moreover, Iscor states that it gave the

Department the appropriate information

to adjust its submitted costs for the final

determination.

DOC Position

We agree with both Iscor and

petitioners. The Department’s normal

practice is to capture production costs

for the specific product sold during the

period of investigation. Therefore, we

have adjusted Iscor’s reported costs to

account for the omission of the

company’s year-end adjustments from

costs and to correct the reported values

for the minor errors pointed out by Iscor

on the first day of verification.

Comment 2

Petitioners assert that Iscor’s reported

costs are based on a distortive

methodology and that we should reject

its reported COP and CV data.

Petitioners claim that the submitted

costs are based on estimates and not

actual costs. Specifically, petitioners

claim that Iscor assigns labor costs and

hours on a budgeted basis and that

production costs are based on

approximate production quantities.

According to petitioners, Iscor’s product

groupings are being aggregated in

contravention of the statue. In addition,

petitioners argue that Iscor grouped

costs for various products with different

physical characteristics into a single

control number.

Iscor states that it acted to the best of

its ability in responding to the

Department’s questionnaires and has

reasonably determined the production

cost for each control number based on

the company’s existing data. Contrary to

the petitioners’ assertion, Iscor claims

that it based its submitted costs on

actual production quantities. As for the

petitioners’ specific concerns on

product groupings, Iscor contends that

this issue only arose in one control

number sampled by the Department

during verification. Therefore, Iscor

argues that this does not make its home

market sales data unusable nor does it

warrant a determination of facts

available as suggested by the petitioners.

Iscor then elaborates that the reason it

grouped internal product codes with

variations in costs was that this control

number consists of physically similar

reclassified product codes (i.e., reserve

stock, flange material, and scrap) and

prime product codes. Iscor further

points out that a variation in costs exists

between these internal product codes

because it values reclassified product

codes in a different manner than prime

product codes.

DOC Position

We disagree with the petitioners’

claim that we cannot rely on Iscor’s

submitted costs. Although the reported

COP and CV amounts were calculated

based on estimated labor costs and

hours, Iscor adjusted all estimated or

standard amounts to actual costs by

calculating and applying production

variances. (See cost verification exhibit

14). In addition, we disagree with

petitioners’ claim that we cannot rely on

Iscor’s submitted costs because they are

based on approximate production mix

tonnages. Although the reported

production mix tonnages for each

CONNUM were based on estimates, we

believe that Iscor’s method of estimating

these tonnages resulted in a reasonable

measure of the actual production

tonnages by CONNUM. In the ordinary

course of business Iscor does not retain

production information on a model

specific basis as defined by a CONNUM.

Iscor does, however, maintain

information on its sales mix which,

because the company produces largely

to order, resembles its production mix.

Thus, Iscor used its sales dispatches to

identify the quantity sold of each model.

Iscor then used this information to

determine the POI sales mix which was

used as a surrogate for its production

mix. Iscor adjusted this surrogate

production mix tonnage to equal its

actual total production tonnage. To

show that this methodology was

reasonable, Iscor provided a POI

inventory movement report for the

merchandise under investigation. (See

verification exhibit 21.) According to

this movement report, Iscor’s

production tonnages and sales tonnages

were essentially the same amounts

during the POI.

As Iscor has pointed out, the product

codes it grouped together for the one

commercial plate specification control

number sampled by the Department

during verification consisted of prime

products and reclassified prime

products (i.e., reserve stock, flange

material, and scrap) that had similar

physical characteristics. To calculate a

weighted-average cost for this control

number, Iscor assigned manufacturing

costs to the reclassified products based

on the product code under which it sold

the product rather than the actual costs

based on what it intended to produce.

(See cost verification exhibit 13.) While

we do not disapprove of Iscor grouping

prime products of similar physical

characteristics within the same control

number, we do consider the

methodology used by Iscor to account

for the cost of reclassified products

inappropriate. Rather, in this instance,

we consider it appropriate to use the

actual cost incurred to manufacture the

product rather than the cost assigned to

the product by Iscor based on the

product’s classification for sale. We note

that despite the fact that Iscor captured

the difference between the cost of

producing the intended merchandise

and that which it ultimately sold

through its reclassification variance,

Iscor’s reclassification variance

approach spreads product-specific costs

from models with commercial plate

specifications to other product

groupings.

For the final determination, we have

adjusted the submitted cost of

manufacturing for control numbers with

commercial plate specifications by

disallowing the assigning of lower costs

to reclassified products. This

adjustment is limited to models with

commercial plate specifications because

testing of Iscor’s other product

groupings at verification did not

indicate the same problem. To avoid

double counting costs, we have reduced

the reclassification and reserve stock

variances by the aggregate amount in
61736 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

which we increased reported costs for

models with commercial plate

specifications.

As for our position concerning Iscor’s

methodology of grouping product codes

with different physical characteristics,

see comment 7 for further details.

Comment 3

Iscor maintains that the Department

should not adjust its reported costs for

the slight deviation reported on the

reconciliation worksheet that it

submitted as part of its cost verification

exhibit 8. Iscor claims that this

deviation only shows that its reported

costs based on simulated production

mixes are reasonable. Iscor suggests that

the Department should expect some

difference because its reported

production mixes are based on what it

sold during the POI and not what it

produced. According to Iscor, using

sales quantities was necessary because

the company does not maintain modelspecific production information. As for

the cause of the deviation, Iscor

provides the following explanations.

Iscor first points out that the specific

product mixes it manufactured during

the POI was not necessarily the same as

that sold during the POI. According to

Iscor, this difference will statistically

equal out over time because it only

produces against orders. Iscor’s second

explanation is that its internal product

codes consist of various similar

products that have a similar cost makeup. However, these product codes have

different physical characteristics and

dimensions which made it necessary for

the company to use them more than

once when compiling the reported

CONNUMs. The final reason stated by

Iscor is that it can attribute the

difference to the fact that it has

historically used a standard cost system

and not an actual costing system. Thus,

Iscor had to adjust its standard costs to

calculate the reported costs.

Petitioners contend that the

Department must adjust Iscor’s reported

costs to account for the discrepancy

between reported costs and costs

recorded in the financial accounting

system. According to petitioners, Iscor’s

explanation for the discrepancy does

not mitigate the difference. If there is

indeed a different product mix between

the financial and cost accounting data

that results in a difference in costs that

have been calculated, then it is evidence

that Iscor’s reported costs are unreliable.

Petitioners point out that one would not

expect a difference between Iscor’s

reported and recorded costs because it

actually derived the reported section D

costs from the cost of sales recorded in

the financial accounting system.

Moreover, the petitioners state that Iscor

provided its costs on this basis

specifically because it assumed that it

produces products in the same ratio as

sold over a representative period. If the

difference in the reported costs and

financial system costs disproves this

assumption, then the Department

should reject Iscor’s costs. Otherwise,

the Department should increase Iscor’s

reported costs by the verification

finding.

DOC Position

We agree with petitioners that we

should increase Iscor’s reported

production costs to account for the

difference between the reported costs

and those recorded in its accounting

system. As part of verification, Iscor

prepared a reconciliation worksheet that

shows its reported costs are less than

the costs recorded in its accounting

records. Although Iscor speculated as to

the cause of the reconciling difference,

the company could neither document

nor quantify the specific reasons why its

reported costs differed from those

recorded normally in its records. With

respect to Iscor’s explanations for the

difference, the fact that the company

had to use relative sales quantities to

determine product specific production

quantities, or that it had to include sales

of different models within a product

code in different CONNUMs does not

justify it not capturing all costs as

recorded in its financial accounting

system in accordance with its home

country GAAP. In addition, Iscor having

to adjust its standard costs to actual for

the submission should cause the

reported costs to agree with the actual

costs recorded in its accounting system,

not cause a reconciling item. Absent

support for each of the reconciling

assumptions noted by Iscor, we consider

it appropriate to adjust the company’s

reported costs to include all costs as

captured by its normal accounting

system.

Comment 4

Petitioners argue that the Department

must adjust Iscor’s reported G&A

expense for methodological errors. The

petitioners cite the Department’s cost

verification report which states that

Iscor omitted headquarters’ costs from

G&A and allocated G&A against fixed

costs rather than cost of sales. Thus, the

petitioners contend that the Department

should correct these figures for the final

determination.

Iscor claims that it is appropriate for

it to allocate general expenses as a

percentage of the fixed costs incurred to

manufacture each specific product code.

Iscor argues that it uses this

methodology in the normal course of

business and that the methodology

appropriately applies the G&A

percentage to each product code’s

reported fixed cost amount. Moreover,

Iscor claims that the effect of expressing

the percentage in terms of fixed cost

instead of total cost has little effect on

the reported costs because it is basically

the same amount.

DOC Position

We agree with the petitioners that

Iscor should allocate its G&A expense

based on cost of sales rather than fixed

costs. As set forth in Large Newspaper

Printing Presses and Components

Thereof, Whether Assembled or

Unassembled, From Japan, Final

Determination of Sales at Less Than Fair

Value, 61 FR 38139, 38150 (July 23,

1996), our normal methodology for

allocating G&A expenses to

merchandise is based on cost of sales.

Our methodology recognizes the fact

that the G&A expense category consists

of a wide range of different types of

costs which are so unrelated or

indirectly related to the immediate

production process that any allocation

based on a single factor (e.g., head

counts, fixed costs) is purely

speculative. The Department’s normal

method for allocating G&A costs based

on cost of sales takes into account all

production factors (i.e., materials, labor,

and overhead) rather than a single

arbitrarily chosen factor. Absent

evidence that our normal G&A

allocation method unreasonably states

G&A costs, we allocated such costs for

the final determination based on cost of

sales.

In addition to allocating Iscor’s G&A

expenses based on the company’s cost

of sales, we increased Iscor’s reported

G&A expenses to account for

headquarters costs incurred during the

first half of the POI. Iscor indicated that

this expense is a cost of production and

that it should have included it in COP

and CV. (See Iscor’s cost verification

report, at page 2.) Furthermore, Iscor

included similar costs incurred during

the second half of the POI in the

submitted COP and CV.

Comment 5

Petitioners argue that ABS Grade A

shipbuilding plate should not be

matched to ASTM A36 plate because

the majority of the shipbuilding plate

was dual-certified to the A36

specification and is sold as structural

plate. According to petitioners, the

Department’s plate specification

hierarchy dictates that the more

appropriate match is to the most

stringent standard to which the product
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61737

is produced: the ABS grade. This grade,

they allege, exhibits the closest physical

characteristics.

Iscor argues that ABS Grade A

shipbuilding plate is sold as structural

steel and is intended to be used

primarily as ASTM A36 material. Iscor

claims that the Department verified

Iscor’s plate specification model match

hierarchy.

Petitioners counter that the fact that

shipbuilding plate may be used as

structural plate or sold to structural

plate customers is irrelevant to the

Department’s plate specification model

match hierarchy, which focuses on

physical characteristics. In petitioners’

view, the fact that this steel is dualcertified to both the ABS and ASTM

A36 specification does not mean that

A36 is the best match. Petitioners state

that because this material meets the

more stringent ABS shipbuilding

standard, it should be matched to a

product with similar characteristics.

Iscor responds that the dual certified

ABS and A36 plate was sold in the

United States as a structural steel and

not as shipbuilding plate. Iscor

acknowledges that its customers

requested the dual certification to

enable them to sell this material as

shipbuilding plate, but argues that the

vast majority of this material was sold

as A36 material. Iscor claims that

matching this steel to Lloyds

shipbuilding plate Grade A would

ignore the first intent for the material

sold in the United States, which is

structural steel. Iscor likens matching

the two shipbuilding steels under these

circumstances to matching a pressure

vessel steel to a structural steel. Iscor

notes that it gives dual certified ABS

and A36 material the same internal

quality code as it gives to single

certified A36 material, while single

certified ABS plate has a different

quality code. Iscor cites this as evidence

that the company treats the dual

certified material as equivalent to A36

and that this is the best home market

match for dual certified material sold in

the United States.

DOC Position

We agree with petitioners. As

petitioners correctly note, the fact that

shipbuilding plate may be used as

structural plate or sold to structural

plate customers is irrelevant to the

Department’s plate specification model

match hierarchy, which focuses on

physical characteristics of the most

stringent specification to which a

product is made. In this case the ABS

Grade A specification is the more

stringent specification and this is the

specification that is controlling in

selecting a home market product. As

Iscor acknowledges, the reason the

product sold in the United States is dual

certified is that its customers requested

the dual certification to enable them to

sell this material as shipbuilding plate.

Regardless of how this product is

ultimately used by the customer, this

remains the most stringent specification

to which this product is made. For this

final determination we are continuing to

consider the best match specification for

dual certified ABS/A36 plate sold in the

United States to be Lloyds Grade A plate

sold in the home market.

Comment 6

Petitioners allege that Iscor seemed to

have difficulty reporting the correct

chemical requirements of the certain

plate specifications examined at

verification, which may distort the

appropriate product matching of grades.

They state that the Department should

ensure that the correct chemical

requirements are reviewed when

matching grades and creating product

control numbers. Petitioners note that a

large and divergent number of products

were included in one product control

number. Petitioners state that Iscor was

unable to determine the actual

characteristics of much of the plate in

this product control number, and that

therefore the Department should reject

Iscor’s product control numbers and

base the final determination on facts

available.

Iscor maintains that it correctly

constructed each product control

number using information that

pertained to the order on which the

invoice was issued. Iscor notes that

petitioners’ claims relate to information

submitted in response to Part D of the

Department’s antidumping duty

questionnaire, the cost portion of this

review. Iscor references its response to

Comment 2 above and alleges that

because the effect and cost deviations

were declared and explained in the

costing system, the deductions made

from the variances in cost are accounted

for.

DOC Position

We agree with both respondent and

petitioners, in part. During our review of

the product characteristics for numerous

sample sales, we did not identify any

discrepancies in reported product

characteristics between mill certificates

and product specifications. That is, each

product we examined met its stated

product specification. This was also true

of the commercial quality plate that we

examined. We note that with respect to

the one product control number

referenced by petitioners, the relevant

specification covers a broad range of

steels. Again, all of the products we

examined for this specification were

within the stated specifications of this

product. While the specifications of the

product that Iscor intended to make, as

opposed to the specifications that the

product actually met and were sold to,

are relevant in terms of analyzing costs

of production, they are not relevant for

this portion of our analysis.

While we agree with petitioners that

at verification we found some minor

inconsistencies between the product

characteristics noted on Iscor’s plate

specification model match hierarchy

tables and the actual specifications

themselves, we did not find any

inconsistencies which were significant

enough to change the model match

hierarchy. Therefore, we have not

modified Iscor’s plate specification

model match hierarchy from the one

used in the preliminary determination.

Comment 7

Petitioners allege that Iscor

improperly constructed its product

control numbers. They claim that

material such as flange material, which

is described by Iscor as the ‘‘lowest of

the low’’ in the market, has generally

been downgraded from other

specification products, and Iscor admits

that it cannot determine what the

original specification might be.

Petitioners assert that flange products

cannot be said to be like other prime

commercial products. See 19 U.S.C.

1677(16)(B)(ii). Petitioners also argue

that like other non-prime products,

flange material is not equal in

commercial value to prime commercial

products. See 19 U.S.C. 1677(16)(B)(iii).

In petitioners view, flange material

should not be compared to prime

commercial grade or structural material

sold in the United States.

Petitioners argue that certain

downgraded products may also be sold

outside the ordinary course of trade.

Petitioners cite the factors in Laclede v.

United States: the price of the

merchandise compared to other home

market sales, the profitability of the

merchandise compared to other home

market sales, the number of customers

purchasing the product, quality

assurances provided for the product,

differences in how the product is sold,

the end use of the product, the average

size of the sale compared to other sales,

and whether the product is

distinguished by the seller from other

merchandise of the same type. See

Laclede Steel Co. v. United States, Slip

Op. 95–144 (CIT August 11, 1995).

Petitioners claim that many of these

factors apply to this case. Petitioners
61738 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

argue that the Department verified that

certain products (such as flange

material) are sold at a discount and are

less profitable than prime products.

Petitioners also state that these products

are downgraded to more limited uses

than originally intended when

produced, and that they are sold as is

without mill certificates. Unlike most

products, according to petitioners, these

products are inventoried and given a

different designation, and these

products are sold to a more limited

group of customers.

Petitioners state that Iscor has

configured its database in such a way

that it has distorted product matching,

calculation of difference-in-merchandise

adjustments, and calculation of normal

value. For these reasons, they claim that

the final determination should be based

on the facts available.

Respondent maintains that its home

market database is usable and has been

verified. Iscor notes that it has

distinguished between prime and nonprime products. Iscor notes that it was

instructed by the Department in its

March 19, 1997, Supplemental

Questionnaire to reclassify non-prime

products to prime products if these

products meet any specification (even if

not the one originally intended). Iscor

claims that it followed the Department’s

instructions and that it would be unjust

to penalize Iscor for following these

directions.

Iscor argues that its reclassified

products are not sold outside the

ordinary course of trade. Iscor states that

in determining whether products are

outside the ordinary course of trade the

Department does not evaluate just one

factor in isolation but all the

circumstances particular to the sales in

question. See Murata Mfg. Co. v. United

States, 820 F. Supp. 603, 607 (CIT 1993)

and Portland Cement and Clinker from

Mexico, 62 FR 47626 (September 10,

1997). Iscor claims that its reclassified

products are not sold for unusual

reasons or under unusual

circumstances, and urges the

Department not to find these sales

outside the ordinary course of trade.

DOC Position

We agree with respondent. At

verification we found that Iscor

produces and sells certain products as

commercial quality products for general

engineering applications where

moderate bending, forming and drawing

are involved. These products are not

produced to specific mechanical

property requirements and, as a result,

they do not meet the same stringent

specifications that may be characteristic

of other Iscor products. Although Iscor’s

family of commercial products is sold to

certain customers in the local market

absent test certificates, this material is

accompanied by analysis certificates

which attest to its meeting certain

chemical specifications.

During our review of Iscor’s

commercial quality products, we found

that some of these products are

comprised of steel which has been

downgraded and reclassified during

production from its originally intended

specification. This material, like the

commercial quality material intended as

prime commercial quality material,

meets the limited characteristics and

specifications of Iscor’s family of

commercial quality products. We note

that for purposes of a price-to-price

comparison, the fact that some

commercial quality material may

originally not have been intended as

commercial quality material is

irrelevant. What is important is that the

material sold and valued as commercial

quality material meets the specifications

for which it is valued and sold; and our

analysis of sample sales at verification

involving these products demonstrated

that they conformed to the limited

specifications and guidelines of

commercial quality plate products. We

acknowledge that the Department

instructed Iscor to reclassify certain

non-prime products classified as

‘‘seconds’’ as prime products if they met

any specification (even if not the one

originally intended).

Regarding petitioners’ claim that

Iscor’s reclassified and downgraded

products may be sold outside the

ordinary course of trade, petitioners

appear to be primarily concerned with

flange material, the ‘‘lowest of the low.’’

We agree that several of the factors cited

as criteria used in making such a

determination with respect to sales

outside the ordinary course of trade

appear to apply in this case. For

example, certain flange material is sold

on a tender basis, and not per specific

orders. As a result, these products may

be sold at prices lower than other prime

commercial grade steel products. The

profitability of downgraded commercial

material is also less than the

profitability of as intended commercial

grade material. There is limited

information on the record with respect

to the other criteria. However, we note

that a very significant portion of the

commercial grade home market sales

that match to U.S. sales fail the cost test.

Because the steel in question is the

‘‘lowest of the low,’’ these prices are

presumably lower than those of as

intended commercial quality steel. To

the extent that certain sales in the

relevant product control number are

more properly designated as seconds

than prime (and therefore should be in

a separate control number and not

matched to prime U.S. sales (see Certain

Cold-Rolled Carbon Steel Flat Products

From the Netherlands, 62 FR 18476,

18482 (April 15, 1997)), we believe that

these sales are most likely to be the ones

that failed the cost test and are,

therefore, already not being used in our

matching analysis. Therefore, no further

adjustment is required. See Analysis

Memo, dated October 24, 1997.

Comment 8

According to petitioners, Iscor has

improperly calculated its home market

rebate adjustments. Petitioners note that

two of the rebates, REBATE2H and

REBATE6H, were allocated by

calculating the total rebates paid on all

direct and indirect sales and dividing

that amount by the direct sales tonnage.

This amount was allocated only to

direct sales, which petitioners allege

unfairly skews the price-to-price

comparisons. Petitioners argue that the

Department should not grant Iscor’s

reported REBATE2H or REBATE6H as

adjustments to normal value; but for

purposes of the cost/price test, the full

rebates should be granted. Petitioners

state that the amounts of two other

rebates, REBATE3H and REBATE5H

were skewed. Petitioners urge the

Department to use facts available for

this final determination, as the gross

unit price net of rebates cannot be

accurately determined for any sale

receiving any of these rebates.

Iscor claims that it used a reasonable

methodology in reporting rebates and

that the Department verified these

rebates. Iscor notes that customers were

entitled to a rebate on both direct and

indirect tonnage, that is irrespective of

whether the material was bought

directly from Iscor or through a

merchant. Iscor argues that it correctly

allocated the full rebate to direct sales

because it was requested to state the

rebates on a sales-specific basis and it

only stated direct sales tonnage in Part

B of its questionnaire response.

DOC Position

We agree, in part, with both

petitioners and respondents. With

respect to REBATE2H and REBATE6H,

we agree with petitioners that the

methodology employed by Iscor which

calculates these rebates on the basis of

both direct and indirect tons purchased

(rather than on direct tons purchased)

skews the treatment of these rebates.

This methodology was not explained to

the Department prior to verification.

Indeed, Iscor’s most detailed submission

on this issue indicated that the rebates
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61739

were calculated using total customer

tonnage (see response of June 27, 1997).

Iscor’s allocation methodology greatly

overstates the rebate amounts for

REBATE6H and REBATE2H for certain

sales, and understates these amounts for

other sales. Because these rebates are

allocated across all direct sales to a

particular customer, and customers may

buy more than one type of steel, these

distortions can significantly affect our

analysis. We note, however, that Iscor’s

reported amounts for REBATE6H do not

apply to home market sales that are

matched to U.S. sales. Consequently,

this portion of the comment is moot.

Regarding REBATE2H, we are

disallowing this rebate for the final

determination with the exception noted

below. For certain sales, we found at

verification that essentially all sales

were direct rather than a combination of

direct and indirect. For these sales, we

are continuing to use the reported rebate

amount as an adjustment to normal

value. (We note that certain sales for

which this rebate was reported do not

match to U.S. sales and although we are

disallowing this rebate, for these sales

this issue is moot.) With respect to

REBATE3H and REBATE5H, the

Department found at verification that

Iscor’s allocation methodology understated the actual amounts for the rebates

had they been calculated on a

transaction-specific basis. For the final

determination, therefore, we are using

the reported rebate amounts as

adjustments to NV. See Analysis Memo,

dated October 24, 1997.

Comment 9

Petitioners state that various errors in

Iscor’s U.S. sales database render it

unreliable as a basis for the final

determination. For example, petitioners

identify certain discrepancies relating to

ocean freight rates and early payment

discounts. Petitioners argue that U.S.

credit expenses were not verified as no

documentation of payment dates was

provided.

Iscor claims that the U.S. sales

database has been verified. With respect

to ocean freight, Iscor notes that the

discrepancy arose because the reported

amount was an estimate calculated prior

to the actual shipment. Iscor states that

the Department has the actual expense

and that an estimated freight rate will

always differ from the actual freight rate

as estimated rates are negotiated prior to

fixing sales price. With respect to early

payment discounts, Iscor alleges that it

employed a reasonable methodology.

DOC Position

We agree with petitioners in part.

While the Department identified certain

discrepancies relating to ocean freight

rates, early payment discounts, and U.S.

credit at verification, we disagree that

these errors render Iscor’s overall U.S.

sales database unreliable. The

Department considers these mistakes to

have been relatively minor and not to

call into question the integrity of the

entire database. As a result, we are using

Iscor’s submitted data, with the

revisions noted in these comments, and

not using total facts available in this

final determination.

With respect to ocean freight expenses

reported by Iscor for certain sales, we

found at verification that the reported

amounts misstated the actual amounts

for certain shipments. For the final

determination, we have corrected ocean

freight charges for these specific sales.

For all other ocean freight expenses,

where such charges are applicable, we

are applying as facts available the

highest reported amount for any U.S.

sale. By not providing verifiable

information for ocean freight expenses

when such information was available to

Iscor, we have determined that Iscor

failed to cooperate by not acting to the

best of its ability to comply with a

request for information. See Certain

Pasta From Turkey, 61 FR 30309, 30312

(June 14, 1996) (Pasta). Consequently,

the use of adverse facts available under

section 776(b) of the Act is warranted.

Additionally, we did not convert ocean

freight from rand to dollars as we did in

the preliminary determination, as this

amount was in fact reported in dollars.

With respect to U.S. credit expenses,

we were unable to verify date of

payment, since Iscor did not provide

documentation of proof of payment for

its U.S. sales during verification. As

facts available for U.S. credit expenses,

we are applying the highest reported

U.S. credit expense to all U.S. sales. By

not providing verifiable information for

U.S. date of payment when such

information was available to Iscor, we

have determined that Iscor failed to

cooperate by not acting to the best of its

ability to comply with a request for

information. See Pasta. Consequently,

the use of adverse facts available under

section 776(b) of the Act is warranted.

We are allowing Iscor’s reported early

payment discounts. Our review of

Iscor’s allocation methodology, which

calculated a discount amount based on

all early payment discounts and tons

shipped to the customer was

determined to be reasonable. The

allocated amount reported is an average

for all sales—including sales which

received the discount and sales which

did not receive the discount.

Consequently, this amount will always

differ from the discount amount

specified by contract on individual

sales, as the discount was not in fact

paid on all sales. For the final

determination we are continuing to use

Iscor’s reported U.S. early payment

discount amounts.

Comment 10

Petitioners note that many U.S. sales

were made on a theoretical weight basis

and that because Iscor rolls larger than

the nominal dimensions, customers who

purchase on a theoretical weight basis

actually receive more tons than ordered.

Therefore, if the gross price is divided

by the actual weight, it will result in a

lower unit price than the theoretical

weight based unit price. Petitioners

argue that all price comparisons should

be made on the same weight basis, and

that all prices and expenses should be

converted to actual weights. Respondent

did not comment on this issue.

DOC Position

We agree with petitioners that all

price comparisons should be made on

the same weight basis. In its original

and supplemental questionnaire

responses, and as we found at

verification, Iscor failed to report

properly an actual to theoretical weight

conversion factor for both its U.S. and

home market sales, thereby prohibiting

price comparisons to be made on the

same weight basis. As facts available,

we are applying the average of the

verified U.S. ratio of theoretical to

actual weights to all U.S. quantities and

prices reported on an actual weight

basis. We are applying the same

conversion factor to CV. With respect to

the home market, as facts available we

are applying the verified ratio of

theoretical to actual weights to all home

market quantities and prices reported on

an actual weight basis. We are applying

this same conversion factor to the

reported COP. See Analysis Memo,

dated October 24, 1997. We are applying

facts available to these adjustments

under section 776(a)(2) because Iscor

did not provide information requested

by the Department in its submitted

database.

Comment 11

According to petitioners, Iscor did not

document its home market payment

dates at verification. Therefore, they

claim that the Department should not

grant Iscor a downward adjustment to

normal value for home market credit

expenses due to the fact that the

payment time could not be verified.

Iscor argues that the Department

incorrectly rejected Iscor’s proof of

payment. Iscor notes that verification is

a long process and it is often necessary
61740 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

to work long hours to complete

verification. Iscor explains that because

the verification continued past normal

business hours on the last day of

verification it lost access to the office

that had proof of payment records. Iscor

states that it forwarded this information

to the Department representatives after

verification, but the Department rejected

these records. Iscor urges the

Department to consider proof of

payment to be verified because it made

a good faith effort to provide the

information to the verification team.

In responding to petitioners, Iscor

noted that its data system does not

provide transaction specific payment

dates because local sales are paid by

statement, not by individual invoice.

Iscor claims that it devised a reasonable

methodology as the most accurate way

to determine payment dates based on

the information that it did have.

DOC Position

We agree with petitioners that we

were unable to verify Iscor’s home

market payment dates. While Iscor may

have devised a reasonable date of

payment methodology, we were not able

to verify this methodology on site. The

Department appropriately rejected

Iscor’s post-verification date of payment

submission as untimely. Date of

payment information and source

documentation was clearly requested in

the Department’s verification outline,

which was provided to Iscor in advance

of verification. This information should

have been prepared in advance of the

start of verification and should have

been part of the sales trace packages at

the time they were presented to the

Department. After verification had

ended, the verification team was not in

a position to tie date of sale information

to original company records or

otherwise verify any information

regarding payment date. Therefore, we

are denying home market credit

expenses as an adjustment to normal

value.

Comment 12

According to petitioners, no offset to

normal value for pre-sale warehousing

should be granted as the Department

was unable to verify pre-sale

warehousing expenses. Respondent did

not comment on this issue.

DOC Position

We disagree with petitioners. The

Department is not required to verify

every item in a respondent’s

questionnaire response. Rather, in

conducting verification, the Department

must prioritize its examination of a

respondent’s reported data according to

factors such as time availability, a

respondent’s general level of

compliance, and the relative dollar

value of the reported amounts.

‘‘[V]erfication is like an audit, the

purpose of which is to test information

provided by a party for accuracy and

completeness. Normally, an audit

entails selective examination rather than

testing of an entire universe.’’ Bomont

Indus. v. United States, 733 F. Supp.

1507, 1508 (CIT 1990). In this case, time

did not permit us to verify Iscor’s

reported pre-sale warehousing expenses.

Because we have no evidence that

would lead us to disregard respondent’s

reported pre-sale warehousing expenses,

we are granting this adjustment for the

final determination.

Comment 13

Petitioners argue that the scope of the

investigation should be clarified to

include: (a) purported ‘‘alloy’’ plate,

sold as ASTM A36 or another carbon

plate specification, to which trace

amounts of inexpensive alloying agents

have been added (‘‘low-alloy plate’’) and

(b) subject merchandise sold as having

a 3⁄16′′ nominal thickness but ‘‘rolled

light’’ to an actual thickness of just

under 4.75mm (the boundary of the

tariff classifications set forth in the

scope description of the preliminary

determination) (‘‘light-rolled 3⁄16′′

plate’’). Petitioners state that the

Department routinely makes minor

changes to its scope descriptions, both

during investigations and after an order

is issued, particularly where this is

thought necessary to prevent

circumvention. See Small Diameter

Circular Seamless Carbon and Alloy

Steel Standard, line and Pressure pipe

from Italy, 60 FR 31981, 31983–85 (June

19, 1995) and Freshwater Crawfish Tail

Meat from the People’s Republic of

China, 62 FR 41347, 41357–58 (August

1, 1997).

Petitioners claim that any argument

that the International Trade Commission

(ITC) preliminary determination

precludes this scope clarification is

based on a fundamental

misunderstanding of the

interrelationship between the scope of

investigation, the industry examined by

the ITC (defined as producers of the like

product), and the requirement for

industry support. Petitioners note that

although the Department frequently

modifies the scope of an investigation

during its course, the Department is

expressly prohibited by statute from

reconsidering the issue of industry

support. Petitioners claim that the

Department has explicitly rejected the

theory that the Department cannot

include merchandise within the scope

of an investigation unless precisely the

same merchandise was include in the

ITC’s injury determination. See HotRolled Lead and Bismiuth Carbon Steel

Products from the United Kingdom and

Germany, 62 FR 34213, 34215 (June 25,

1997) (initiation of anticircumvention

inquiry). Petitioners add that none of

the anticircumvention provisions

require a new injury determination.

According to petitioners, they have

demonstrated in their July 3, 1997,

submission that, using the five factors

traditionally employed by the

Department to decide whether

particular products are within the same

class or kind covered by the order, lowalloy plate and light-rolled 3⁄16′′ plate

share the same general physical

characteristics as other subject plate;

that ultimate purchasers have the same

expectations of low-alloy plate and

light-rolled 3⁄16′′ plate as of other subject

plate; and that low-alloy plate and lightrolled 3⁄16′′ plate are sold in the same

channels of trade, for the same ultimate

uses, and at the same cost, as other

subject plate.

Petitioners assert that all 3⁄16′′ nominal

thickness plate is within the scope of

the investigation regardless of whether

its actual thickness is less than 4.75mm.

They state that because 3⁄16′′ plate is an

important part of the market for thin

gauge plates, the scope should be

clarified to state that it covers plate

4.75mm in thickness or more in

nominal or actual thickness. According

to petitioners, any customer ordering a

3⁄16′′ A36 plate, for example, would be

willing to accept any thickness within

the tolerance for that size plate. Thus,

any plate within the tolerance for

4.75mm nominal thickness plate will

compete directly with any other plate

within the tolerance.

Petitioners argue that all cut-to-length

plate that meets common non-alloy

plate specifications is within the scope

of the investigation, regardless of the

presence of alloys in excess of those

specified in the Harmonized Tariff

Schedule of the United States

(‘‘HTSUS’’) categories for non-alloy

steel. They state that the addition of

such alloys does not change the

specification, grade, physical

characteristics or applications of the

plate. Petitioners believe the published

description of the scope of the

investigation should be amended to

make clear that it covers all cut-tolength plate made to common non-alloy

plate specifications. This includes, but

is not limited to, ASTM A36, A572,

A709, A588, A283, PVQ A516, A573,

A455, and ABS grades, as well as

chemical or proprietary equivalents to
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61741

those specifications, regardless of the

alloy content or tariff classification.

Petitioners allege that certain

producers in the countries subject to

these investigations on cut-to-length

carbon steel plate have begun to vary

the alloy content slightly so that these

products no longer meet the tariff

definition of non-alloy steel. In

particular, petitioners believe that

certain producers may be adding boron

to their chemistries, because boron is

relatively inexpensive. Petitioners

believe such products are being used in

identical applications as other subject

merchandise. In petitioners’ view, in

any instance where the added alloy does

not change the performance

characteristics of the plate or affect the

product’s classification within the

industry specification the product

should remain within the scope of the

investigation.

Iscor urges the Department to reject

petitioners’ scope clarification because

this is not a routine minor change nor

have petitioners submitted any

information on the record that Iscor or

any other South African producer is

circumventing or trying to circumvent

the preliminary determination in this

investigation.

DOC Position

We disagree with petitioners. See

memorandum on Scope of

Investigations on Carbon Steel Plate,

Joseph Spetrini to Robert S. LaRussa

(October 24, 1997).

Comment 14

Iscor and Highveld urge the

Department to correct its exchange rate

methodology.

Highveld argues that the Department

should use without exception the actual

daily exchange rate certified by the

Federal Reserve Bank of New York to

convert the South African currency into

U.S. dollars instead of a benchmark rate.

According to Highveld, both the law

and Department practice direct the

Department to use actual unadjusted

daily exchange rates. See Section

773A(a) of the Act and the Statement of

Administrative Action, H.R. Doc. No.

103–316, at 841–842 (1994). See also

Notice of Final Results of Antidumping

Duty Administrative Review: Certain

Welded Carbon Steel Pipe and Tube

from Turkey, 61 FR 69067, 69071

(December 31, 1996). Highveld notes

that Certain Welded Carbon Steel Pipe

and Tube from Turkey states that the

actual daily exchange rates were used

rather than the benchmark rate because

the foreign currency depreciated

substantially against the U.S. dollar of

the period of review. Highveld also

claims that the Department is reviewing

the application of the benchmark in

situations where the foreign currency

depreciates substantially against the

U.S. dollar over the period of

investigation or review, situations in

which it may be appropriate to use daily

rates. See Department of Commerce

Policy Bulletin 96–1: Import

Administration Exchange Rate

Methodology, 61 FR 9434, 9435 n.2

(March 8, 1996). Highveld claims that

the South African currency steadily and

substantially depreciated against the

U.S. dollar during the period of

investigation. It cites the sales

verification report where verifiers noted

a ‘‘sharp devaluation during the POI.’’

Highveld also states that there need

not be a determination of significant

inflation or hyperinflation. Highveld

cites Certain Welded Carbon Steel Pipe

and Tube from Turkey and states that

Department practice does not require a

claim of significant inflation in order to

use daily exchange rates and that daily

exchange rates may be used on two

separate occasions: (a) if the foreign

currency has undergone a substantial

depreciation against the dollar or (b) if

domestic price inflation is significant.

Highveld claims that the first scenario

occurred for this case and urges the

Department to use daily exchange rates.

Iscor argues that the Department

incorrectly used a benchmark rate to

convert South African rand into U.S.

dollars instead of the daily rate on

certain days of the POI because of

currency fluctuations. Iscor maintains

that the use of the benchmark rate is

contrary to section 773A(a) of the law

and Commerce practice (Certain Welded

Carbon Steel Pipe and Tube from

Turkey). Iscor takes issue with the

Department’s statement in the

preliminary determination regarding the

decline in the South African rand. Iscor

argues that it is not a requirement in the

law, regulations or Policy Bulletin (see

above) that South Africa be a highinflation economy in order not to use a

benchmark. Like Highveld, Iscor urges

the Department to correct its exchange

rate methodology in the final

determination and use the actual

unadjusted daily exchange rates instead

of the benchmark rates for all dates.

Petitioners argue that the currency

conversion methodology used in the

preliminary determination was correct.

In petitioners’ view, the Department’s

methodology was both lawful and

consistent with past practice. Petitioners

cite section 773A of the Act and the

SAA as stating that in converting foreign

currencies into U.S. dollars fluctuations

in exchange rates shall be ignored.

Petitioners argue that the Department’s

preliminary determination in this case

is entirely consistent with the Policy

Bulletin on Currency Conversions. (See

Department of Commerce Policy

Bulletin 96–1: Import Administration

Exchange Rate Methodology, 61 FR

9434, 9435 n.2 (March 8, 1996).)

Petitioners explain that the reason the

methodology used in the preliminary

determination differs from that in

Certain Welded Carbon Steel Pipe and

Tube from Turkey is that the Turkish

case involved a hyperinflationary

economy in which the currency was

undergoing a dramatic depreciation.

Petitioners state that this case does not

involve dramatic currency depreciation

driven by hyperinflation, and cite the

Department’s finding in the preliminary

determination that the decline in the

rand was not so precipitous and large as

to reasonably preclude the occurrence of

fluctuations. Petitioners argue that

Highveld’s statements that the rand

underwent a sharp devaluation quoted

in the verification report is not evidence

of a precipitous and large depreciation

in the rand and the fact that the

benchmark was used only for certain

days also argues against the existence of

a precipitous and large depreciation in

the rand.

DOC Position

We agree with petitioners. This case

is distinguished from Certain Welded

Carbon Steel Pipe and Tube from

Turkey as that case involved a

hyperinflationary economy in which the

currency was undergoing a dramatic

depreciation. There is no evidence in

the present case of either a precipitous

and large depreciation in the rand

relative to the dollar or of hyperinflation

in the South African market. As

petitioners correctly note, section 773A

of the Act and the SAA both state that

in converting foreign currencies into

U.S. dollars fluctuations in exchange

rates shall be ignored. The Department’s

use of benchmark exchange rates in

place of daily exchange rates in

instances when a foreign currency is

considered fluctuating is consistent

with these statutory requirements. We

are continuing to use benchmark rates

in place of daily exchange rates in

instances when a foreign currency is

considered fluctuating for the final

determination. For further discussion of

this issue, see the ‘‘Currency

Conversion’’ section of this notice.

Comment 15

Petitioners argue that Highveld’s perunit COP data do not properly account

for differences in physical

characteristics. Petitioners further

contend that Highveld’s methodology
61742 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

ignores cost differences due to

differences in each product’s processing

time per ton. Petitioners support these

arguments by citing that (1) Highveld

allocated the same per-ton conversion

costs to slabs, billets, and blooms

although they have different production

processes, and (2) Highveld allocated

conversion costs for the flat-products

plant based on the tonnage of slab

inputs compared to the tonnage of slab

inputs used for other non-subject

products produced in the plant. The

petitioners reason that all products

produced by the flat products plant

require different machine times per ton

and, therefore, should have different

per-unit conversion costs according to

their thickness, width, length, and other

extras. Petitioners argue that Highveld

should have at least allocated the

conversion costs for as-rolled products

over the output of finished products

instead of over the input.

Highveld asserts that it properly

adjusted its normal accounting records,

which calculates a single cost for all

products, in order to capture the cost

differences due to the physical

characteristics on which the Department

based its analysis. Highveld notes that it

adjusted costs for differences in

chemical components, additional labor

and overhead costs associated with

normalizing, and labor and variable

overhead costs based on yield factors to

account for different rolling costs for

different dimensions of merchandise.

DOC Position

We agree with the petitioners in part

that Highveld’s reporting methodology

failed to fully account for cost

differences associated with differences

in certain physical characteristics of the

subject merchandise. Highveld’s

reported COP and CV data does account

for (1) chemical input differences for

differing quality and types of steel

produced, (2) the additional costs

related to producing normalized

products, and (3) yield loss differences

between differing dimensions of

merchandise. Highveld’s reported cost

data, however, failed to account for cost

differences associated with processing

time differences between varying

dimensions of finished product. Our

verification of Highveld’s reported cost

data showed that the variable cost of

manufacturing the subject merchandise

differs depending on the dimensions of

the product produced. We therefore

adjusted Highveld’s reported costs to

reflect these dimensional cost

differences.

Comment 16

Highveld claims that, in its cost

verification report, the Department

miscalculates the difference between the

COM in Highveld’s accounting system

and the COM submitted by the

company. Highveld agrees with two of

the adjustments to the reconciliation

identified by the Department in its cost

verification report. Highveld objects,

however, to the Department’s proposed

adjustment to value the cost of the

October 1995 to December 1995 sales

from 1995 standard per-unit costs to

1996 standard per-unit costs. Highveld

contends that the Department should

use the average of the per-unit costs

reported to the Department in its

Section D response, which results in an

insignificant difference between the

COM submitted to the Department and

the COM in Highveld’s accounting

system. Highveld maintains that its

reconciliation of submitted COM to that

contained in its cost accounting system

shows only a small difference. Any

adjustment to the submitted costs for

such a small difference, according to

Highveld, is completely unjustifiable.

The petitioners urge the Department

to base Highveld’s COM on total facts

available because Highveld was unable

to reconcile its reported COM with its

cost accounting system. If the

Department does not base the final

determination on total facts available,

petitioners contend that the Department

should at least adjust COM by the

overall difference between Highveld’s

reported COM and its cost accounting

system. The petitioners contend that the

flaws in Highveld’s submitted COM

reconciliation identified by the

Department should be accounted for

when comparing the total submitted

COM with that contained in Highveld’s

cost accounting system for the same

time period. In particular, the

petitioners claim that Highveld

incorrectly valued the cost of its 1995

sales using 1995 standard costs rather

than 1996 standard costs which were

the basis of its cost response.

DOC Position

We agree with Highveld that the cost

verification report miscalculated the

difference between its submitted COM

and that recorded in its accounting

system. We reviewed the revised

reconciliation calculation as contained

in the cost verification report and noted

that G&A was erroneously computed. In

the normal course of business, Highveld

allocates G&A expenses to its steel

making cost centers, including these

expenses as a cost of manufacturing,

and ultimately in the cost of sales for

financial statement purposes. Because

Highveld’s total COM per its accounting

records included G&A expenses while

the submitted COM did not, we need to

adjust the submitted COM for the total

amount of G&A expenses reported to the

Department for subject merchandise. In

addition, since Highveld’s response is

based on its actual cost of

manufacturing during 1996 and not its

1996 standard cost of manufacturing, we

agree with Highveld that the October

through December 1995 sales should be

valued based on the average cost of

manufacturing as contained in its

response for purposes of the cost

reconciliation. We are satisfied that the

reconciliation provided by Highveld in

its September 15, 1997, case brief

establishes that the reported costs

reasonably agree with Highveld’s

accounting records. Therefore, we did

not adjust Highveld’s submitted costs

for this difference.

Comment 17

Petitioners contend that the

Department should increase Highveld’s

COP because Highveld did not include

in the submitted costs the full G&A and

interest expense on materials purchased

from other divisions within Highveld.

Highveld argues that G&A and interest

for materials transferred from other

divisions are already included in the

calculation of G&A and interest for the

subject merchandise. Highveld reasons

that if the Department were to include

these costs as a part of material costs, it

would be double counting G&A and

interest.

DOC Position

We agree with Highveld. The

Department normally treats the cost of

inputs obtained from other divisions

within the same company as a cost

incurred by that company (i.e., it is not

an input obtained from an affiliate, it is

an input produced by the respondent).

In this instance we use the cost incurred

by the company to produce the input.

See e.g., Final Results of Antidumping

Duty Administration Review: Certain

Forged Steel Crankshafts from the

United Kingdom, 61 FR 54613, 54614

(October 21, 1996) (‘‘Crankshafts’’). We

state in Crankshafts that although

respondent describes companies as

‘‘related’’ in various sections of their

questionnaire response, the weight of

record evidence (e.g., corporate

structure charts and audited financial

statements) indicate that they are

divisions of the same corporation. Thus,

in Crankshafts the Department used the

division’s actual verified cost of

producing the input.
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61743

Highveld’s record evidence indicates

that the inputs it identified as obtained

from ‘‘related’’ parties were obtained

from other divisions within the

company. While the Department’s

normal practice is to value inputs from

divisions at actual cost, Highveld

elected to value these inputs at its

transfer prices for submission purposes.

Our verification of Highveld’s reported

cost data showed that the transfer prices

for these inputs were higher than the

COM. Since the transfer price was

higher than the cost of manufacturing

each input, Highveld did not understate

input costs in its reported COP and CV

data. We, therefore, agree with Highveld

that to include G&A and interest as part

of material costs would lead to double

counting of G&A and interest.

Comment 18

Petitioners claim that Highveld

improperly allocated labor costs

between fixed and variable production

costs by treating virtually all labor costs

as fixed. Petitioners allege that

Highveld’s allocation of variable and

fixed costs distorts the Department’s

difference-in-merchandise comparison

and product-matching.

Highveld maintains that it properly

reported total direct labor for the subject

merchandise and that variable labor

costs are not under-reported for the

Department’s differences-inmerchandise adjustment.

DOC Position

We agree with Highveld that it

properly allocated labor costs between

variable and fixed costs using

percentages based on the historical

experience of its plant management.

Because Highveld reported in its

Section D response both variable and

fixed per-unit labor costs as direct labor,

we reclassified Highveld’s reported

fixed labor costs as fixed overhead costs

to compute the difference-inmerchandise adjustment.

Comment 19

Petitioners recommend that, if

accepted, Highveld’s Section D costs be

used as the basis for difference-inmerchandise adjustments and product

matching.

Highveld agrees that its Section D

costs should be used to calculate the

differences-in-merchandise adjustment.

DOC Position

We agree with both petitioners and

Highveld. The Department used

Highveld’s Section D costs to calculate

the differences-in-merchandise

adjustments for the final determination.

Comment 20

Petitioners note that Highveld

incorrectly calculated G&A expenses by

using different divisional levels in the

numerator and denominator for the

calculation. Petitioners suggest that the

Department apply the recalculated G&A

expenses to Highveld’s COP and CV.

Highveld agrees that the G&A expense

rate recalculated at verification should

be used for the final determination.

DOC Position

We agree with both petitioners and

Highveld. The Department used

Highveld’s recalculated G&A expense to

calculate COP and CV for the final

determination.

Comment 21

Highveld maintains that it received

net interest income and that it incurred

no interest expense associated with the

production of the subject merchandise.

Therefore, Highveld contends that COP

and CV interest expense should be zero.

Highveld argues that the Department’s

consolidated interest expense

calculation should exclude the entire

amount of interest expense associated

with Columbus Joint Venture, an entity

in which Highveld has only a 33 percent

equity interest. Highveld contends that

having a 33 percent equity interest fails

to meet the requirements for

consolidation. Highveld cites Final

Results of Antidumping Duty

Administrative Reviews: Certain ColdRolled and Corrosion-Resistant Carbon

Steel Flat Products from Korea, 62 FR

18404, 18445 (April 15, 1997) and Final

Determination of Sales at Less Than Fair

Value: Certain Carbon Steel Butt-Weld

Pipe Fittings from Thailand, 57 FR

21065, 21069 (May 18, 1992), to support

its position that the Department should

exclude the Columbus Joint Venture

from Highveld’s consolidated interest

expense computation since there is no

parent-subsidiary corporate relationship

or parental control between these two

companies. To support its claim,

Highveld notes that the Department did

not consolidate a joint venture in which

the respondent had 50 percent equity

ownership in Final Determination of

Sales at Less Than Fair Value: Aramid

Fiber Formed of Poly-Phenylene

Terephthalamide from the Netherlands,

59 FR 23684, 23688 (May 6, 1994),

because the Department determined that

parental control did not exist. Highveld

notes that it is not a parent to Columbus

Joint Venture and it does not exercise

parental control.

Petitioners assert that Highveld’s

corporate consolidated financial

expenses must be used to calculate

interest expense for COP and CV.

Petitioners state that the cases cited by

Highveld show that the Department

calculates a consolidated interest factor

where the parent exercises control over

the subsidiary. Since Highveld Steel

Works is controlled by the corporate

parent, Highveld Steel and Vanadium

Corporation Limited, the use of the

consolidated interest expense rate is

appropriate. Petitioners further argue

that since Highveld includes interest

expenses for the Columbus Joint

Venture in its consolidated corporate

financial statement and that the statute

at 19 U.S.C. 1677b(f)(1)(A) provides that

costs shall normally be calculated based

on the exporter’s or producer’s records

if they are kept in accordance with the

generally accepted accounting

principles (‘‘GAAP’’) of the exporting

country, the Department should include

all interest expenses consolidated by

Highveld in its financial statement in

calculating a corporate interest expense

rate.

DOC Position

We agree with petitioners. The

Department normally calculates interest

expense based on the respondent’s

audited consolidated financial

statements for the year that most closely

corresponds to the POI. Highveld

consolidated the financial results of the

Columbus Joint Venture in its 1996

annual audited financial statements.

Since Highveld’s audited financial

statements were found to be fairly

presented and in conformity with the

GAAP of South Africa, we have no

reason to believe that the financial

results for the Columbus Joint Venture

should not have been included in the

consolidated financial statements for

Highveld.

We disagree with Highveld that the

cases it cited support its argument. In

Final Results of Antidumping Duty

Administrative Reviews: Certain ColdRolled and Corrosion-Resistant Carbon

Steel Flat Products from Korea, 62 FR

18404, 18445 (April 15, 1997), there

were several companies which met the

requirements for consolidation but

because Korean GAAP did not require

companies to prepare consolidated

financial statements, no audited

consolidation was prepared. We

therefore combined the separate audited

financial statements of the companies to

calculate a group-level interest expense

factor. In Final Determination of Sales at

Less Than Fair Value: Aramid Fiber

Formed of Poly-Phenylene

Terephthalamide from the Netherlands,

59 FR 23684, 23688 (May 6, 1994) and

in Final Determination of Sales at Less

Than Fair Value: Certain Carbon Steel
61744 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Butt-Weld Pipe Fittings from Thailand,

57 FR 21065, 21069 (May 18, 1992), the

respondents were not included in the

audited consolidated financial

statements of the parent because they

did not meet the consolidation

requirements of their home country

GAAP. In this case, however, the

Columbus Joint Venture is included in

the audited consolidated financial

statements of Highveld, in accordance

with its home country GAAP. Therefore,

none of these circumstances apply to

Highveld, as Highveld included

Columbus Joint Venture in its

consolidated financial statements.

Comment 22

Petitioners argue that the final

determination for Highveld should be

based on total facts available. Petitioners

state that it has documented in previous

comments that Highveld’s cost and

price responses are completely

unreliable and unusable in their present

form. Petitioners note that the number

of changes that the Department would

need to make to use Highveld’s sales

data are substantial, to the extent the

data is usable at all. Petitioners argue

that Highveld’s COP and CV data are

completely unusable (see comments

above). In petitioners’ view, as the cost

data are unusable, it is impossible to

perform the below-cost sales analysis,

use the CV data, or calculate difference

in merchandise adjustments. Indeed,

petitioners claim that Highveld’s entire

submission is unreliable and unverified

and that the Department should base the

final determination on facts available.

As facts available, petitioners propose

that the Department use the higher of

the highest rate alleged in the petition

or the highest rate found for another

producer.

Highveld argues that the final

determination should be based on its

submitted data, not facts available.

Highveld acknowledges that the

Department found several errors in its

reported information, but claims that

this data was substantially verified and

that any errors were invariably minor

and not sufficient for the Department to

resort to facts available. See Notice of

Final Determination of Sales at Less

Than Fair Value: Beryllium Metal and

High Beryllium Alloys From the

Republic of Kazakstan, 62 FR 2648,

2650 (January 17, 1997) and Certain CutTo-Length Carbon Steel Plate from

Germany: Final Results of Antidumping

Duty Administrative Review, 61 FR

13834 (March 28, 1996). To the extent

the Department finds errors or gaps in

Highveld’s information, respondent

argues, it should revise the data using

non-adverse facts available.

Highveld also objects to petitioners’

claim that the Department should draw

adverse inferences. In Highveld’s view,

the minor errors that were found are not

sufficient to cause the Department to

resort to adverse inferences. Highveld

states that it did not fail to submit a

questionnaire response, provide a

response which was wholly

unverifiable, or refuse to provide

information to the Department. See

Final Determination of Sales at Less

Than Fair Value: Large Newspaper

Printing Presses and Components

Thereof, Whether Assembled or

Unassembled, From Germany, 61 FR

38166, 38167 (July 23, 1996);

Antifriction Bearings, 61 FR 35713,

35715–6 (June 8, 1996); Final

Determination of Sales at Less Than Fair

Value: Certain Pasta From Turkey, 61

FR 30309, 30312 (June 14, 1996).

Highveld also cites other cases in which

the Department did not apply adverse

inferences, and states that in

comparison with these cases, the

application of adverse inferences is not

appropriate in this case. See Final

Determination of Sales at Less Than Fair

Value: Circular Welded Non-Alloy Steel

Pipe From South Africa, 61 FR 24271

(May 14, 1996) (Circular Welded NonAlloy Steel Pipe From South Africa).

Highveld claims that the information

it presented is not completely unreliable

as suggested by petitioners, and the

Department should not use total facts

available or use adverse inferences in its

final determination.

Petitioners counter that due to time

and resource constraints, verification

cannot be more than a spot-check of

information provided by respondent. In

petitioners’ view, the sheer volume and

pervasiveness of the errors discovered

during verification call into question the

accuracy and complement of the whole

response. See Circular Welded NonAlloy Steel Pipe From South Africa, 61

FR 24271, 24274. Petitioners note that

the statute allows the Department to use

adverse facts available whenever an

interested party has failed to cooperate

by not acting to the best of its ability.

Petitioners claim that the extensive

pattern of inaccuracies and omissions is

evidence of Highveld’s failure to

cooperate. Petitioners argue that given

the extensive deficiencies found with

respect to nearly every major cost and

price adjustment, the Department

should assign Highveld an adverse facts

available margin based on the highest

margin found for another producer or

the highest rate in the petition.

DOC Position

We agree with respondent that the

final determination in this investigation

should not be based on total facts

available. While the Department agrees

with petitioners that there are errors and

omissions in Highveld’s responses, we

do not believe that the scope and impact

of the errors in question are sufficient to

warrant the application of facts

available in the case as a whole. See

Circular Welded Non-Alloy Steel Pipe

and Tube from Mexico: Final Results of

Antidumping Duty Administrative

Review, 62 FR 37014, 37015 (July 10,

1997). We note that the magnitude of

the errors in this investigation are

substantially less than those noted in

Circular Welded Non-Alloy Steel Pipe

From South Africa, 61 FR 24271,

24272–3 (May 14, 1996). With

appropriate corrections, the Department

has determined that Highveld’s

responses are usable for purposes for the

purpose of margin calculations.

Pursuant to sections 776 and 782(e) of

the Act, the Department has used the

facts otherwise available when

necessary.

Comment 23

Highveld argues that the Department

incorrectly determined there to be one

level of trade in the preliminary

determination. Highveld claims that

sales in the home market and sales in

the U.S. are at different levels of trade

and that the Department should grant it

a CEP offset. Highveld does not contest

the Department’s determination that

there was only a single level of trade in

the home market, but does disagree with

the Department’s finding that home

market and U.S. sales are at the same

level of trade.

Highveld notes that the Department

determines normal value for sales at the

same level of trade as the U.S. sales and

that the starting price for CEP is the first

sale to an unaffiliated buyer from which

profit and expenses are deducted under

section 772(d) of the Act. Highveld cites

the preliminary determination which

states that this deduction ‘‘will normally

yield a different level of trade for the

CEP than for the later resale which is

used for the starting price.’’ Highveld

states that to determine whether sales

are at different levels of trade, the

Department considers the stage in the

marketing process, taking into account

the class of customer, selling functions

and expenses associated with these

functions. (See Antifriction Bearings

(Other Than Tapered Roller Bearings)

and Parts Thereof From France,

Germany, Italy, Japan, Singapore, and

the United Kingdom: Final Results of

Antidumping Duty Administrative

Reviews, 62 FR 2081, 2107 (January 15,

1997) (Antifriction Bearings).) Highveld

then cites the statute at 19 U.S.C.
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61745

1677b(a)(7)(A), which provides for a

CEP offset if there is a difference in level

of trade between CEP versus EP, but the

data available do not provide an

appropriate basis to determine a level of

trade adjustment.

Highveld argues that record

information demonstrates Highveld’s

home market sales are at a different,

more remote, level of trade than its U.S.

sales. Highveld claims its home market

and U.S. sales are to a different class of

customer and that the selling functions

performed are qualitatively and

quantitatively different (see Highveld’s

sales verification report, at pages 13, 23–

25).

Highveld posits the existence of four

marketing stages for the subject

merchandise: (1) Production; (2) Sale to

Distributor; (3) Sale to Steel Service

Center (SSC); and, (4) Sale to End-User.

Highveld claims that its home market

sales are at stage 3—to SCCs. Highveld

states that its U.S. CEP sales to Newco

are at stage 2—to distributors. Highveld

argues that since the selling functions of

the U.S. importer (Newco) are

accounted for by a deduction under

provision of the law, they cannot be

included in the level of trade analysis.

(See 62 FR 27295, 27370 (May 19, 1997)

and Antifriction Bearings.)

Highveld alleges that it has an

additional layer of selling activity in the

home market which is qualitatively and

quantitatively different and amounts to

a different selling function. Highveld

claims that in the home market, it

performs the following sales activities—

rolling planning, order status feedback,

pricing support, extensive post-sale

service, market research, technical

advice, advertising, freight and delivery

arrangements, quality control, quality

assurance, organizations and

memberships and customer relations.

Highveld states that in the U.S. sales

functions are limited to moderate postsales service, market discussions and

meetings, freight and delivery

arrangement, quality control and quality

assurance. Highveld cites the

Preliminary Results, 62 FR at 31965–

31966 where the Department notes

several differences in selling functions

for U.S. and home market sales.

Highveld cites the Department’s Final

Rules, 62 FR 27295, 27371, where it

states, ‘‘[S]ubstantial differences in the

amount of selling expenses associated

with two groups of sales also

demonstrates that the two groups are at

different levels of trade.’’

Highveld states that since the

Department cannot quantify whether

Highveld’s different levels of trade affect

price comparability, the Department

should grant Highveld a CEP offset.

Petitioners support the Department’s

determination in the preliminary

determination that a single level trade

exists in both the home market and the

U.S. market, and urges the Department

to reach the same conclusion for the

final determination. Petitioners state

that neither difference in selling

functions or customer descriptions are

alone sufficient to establish different

levels of trade. See Certain Welded Steel

Pipe and Tube from Turkey, 61 FR

69067, 69068. Petitioners claim that the

record in this review does not contain

sufficient evidence of differentiated

selling functions to justify more than

one level of trade. Petitioners point to

Highveld’s sales verification report, at

page 23, where the verifiers stated that

selling functions were handled the same

by Highveld, regardless of their

classification and that Highveld

differentiated selling functions based on

the quantity of the sale rather than the

level of trade. Petitioners claim that

market research, technical advice,

product development research, freight

and delivery, quality assurance

programs, and production planning

were all performed in both markets.

Petitioners noted that the only selling

function that appeared to be different

was personnel training, but that verifiers

found this function to be very limited in

scope (see Highveld’s sales verification

report). Petitioners acknowledge other

small differences (i.e., just-in-time

delivery and advertising) (Preliminary

Results at 62 FR 31966). Petitioners state

that none of these differences are

sufficient enough to justify differing

levels of trade, and that the Department

should not grant a CEP offset.

In response to petitioners’ comments

Highveld continues to maintain that its

home market sales are at a different,

more remote level of trade from its U.S.

sales, and that the Department should

grant a CEP offset. Highveld claims that

petitioners do not dispute the fact that

its home market and U.S. sales are at a

different stage of the marketing process.

Highveld disputes petitioners’ claim

that selling functions are the same in

both markets.

Highveld notes that market research is

focused primarily on the home market,

and that any comparable functions

performed by Newco would be excluded

from the level of trade analysis. With

respect to technical advice and product

development research, Highveld claims

that there are qualitative and

quantitative differences in the advice

provided. Highveld states that U.S.

production planning involves

shipments planned well in advance,

whereas home market planning entails

more short-term demands and requests.

Highveld notes petitioners’

acknowledgment of differences between

personnel training, and states that this

difference should not be ignored

because it is limited in scope. Highveld

reiterates the additional differences in

selling functions cited in the

preliminary determination, and again

asks the Department to grant it a CEP

offset.

Petitioners counter that Highveld’s

U.S. and home market sales are at the

same level of trade and no CEP offset is

warranted. Petitioners dispute

Highveld’s claim that its home market

sales are more remote than its U.S. sales.

Petitioners note that steel service

centers and distributors are not

necessarily at different stages in the

marketing process. Petitioners state that

service centers are often themselves

distributors and that no recorded

evidence indicates a clear distinction

between service centers and other

distributors. According to petitioners,

both distributors and service centers

may sell to other distributors and

service centers or directly to end-users.

Petitioners claim that many of

Highveld’s home market selling

activities do not appear to be tangible.

Petitioners note that Highveld must do

rolling planning on all sales, in order to

maximize the efficient use of its mill.

Petitioners state that there is no record

evidence that just-in-time delivery plays

any significant role in Highveld’s sales

as it generally produces all sales to

order. Petitioners note that pricing

supports are simply discounts and

rebates which are already taken into

account in the Department’s analysis,

along with warranty expenses.

Petitioners argue that the record does

not demonstrate that customer care

visits, market share research or liaison

meetings result in any significant costs

or effort on Highveld’s part. Petitioners

note that Highveld acknowledges that it

has after-sales service, freight and

delivery arrangements, market

discussion and liaison meetings, and

quality control and assurance for sales

in both markets. In petitioners view,

there is not a quantitative or qualitative

difference in the selling functions

performed in the two markets and no

CEP offset should be granted.

DOC Position

We agree in part with petitioners and

with Highveld. In determining whether

separate levels of trade actually existed

between the U.S. and home markets, we

examined Highveld’s marketing stages,

reviewing the chains of distribution and

customer categories reported in the

home market and in the United States.

Highveld argues that its sales in the
61746 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

home market are more remote and at a

different stage of the marketing process

from its sales in the United States.

While we agree with petitioners that

Highveld’s distinction between SSCs

and distributors is questionable, we do

agree with Highveld that after Newco’s

selling functions are accounted for by a

deduction under section 772 (d) of the

Act, they cannot be included in the

level of trade analysis.

With respect to the selling activities

described by Highveld as representative

of the greater quantitative and

qualitative selling functions associated

with home market sales compared to

U.S. sales, many home market selling

functions, although greater in number,

appear to be activities similar in nature

to the selling functions associated with

U.S. sales. In addition, some of the

home market selling functions detailed

by Highveld do not characterize services

provided to customers.

In some instances the activities

characterized by Highveld as selling

functions are more appropriately

characterized as activities and functions

associated with production and

manufacturing processes. Rolling

planning, for example, is something

Highveld conducts in order to maintain

efficiency during production, and it is

required for products sold in all

markets. Nor do we consider order

status feedback and the conveyance to

customers of the progress of particular

orders to be a selling function. In any

case, these services are provided to

customers in both markets.

With respect to pricing supports, such

as discounts and rebates, these are

already accounted for in the calculation

of NV, and we do not consider them to

be distinct selling functions which are

relevant to our level of trade analysis.

Neither do various home market

organizations and memberships to

which Highveld belongs and makes

contributions and payments to relate to

services provided to customers per se.

A number of other selling functions

are provided to customers in both

markets. These include efforts to meet

customer delivery schedules, freight

arrangement and delivery services, and

quality assurance and control (including

line inspection and material testing and

certification). Highveld performs

functions relating to market discussions

and research, and customer liaison

meetings in both markets. Although

Highveld officials have less opportunity

to physically meet with U.S. customers

than with those in the home market,

they nonetheless do so regularly during

each year. While Newco is responsible

for conducting initial U.S. market

research concerning market conditions

in preparation for visits from Highveld

officials, joint customer calls made by

Highveld and Newco officials evaluate

further these conditions and findings.

We agree with petitioners that

because most of Highveld’s sales

involve merchandise produced to order

and not sold from inventory, just-intime delivery is not a significant selling

function attributable to sales in one

market versus another. Regarding

technical advise, although Newco is

responsible for providing initial support

to U.S. customers, Highveld provides

any necessary back-up, if requested.

We do acknowledge that there are

some minimal differences in selling

functions between the two markets.

These differences have not changed

from the ones noted in our preliminary

determination, although as petitioners

note these services appear to be

relatively minimal and in our judgment

are not sufficient to warrant a difference

in LOT. For this final determination, we

are finding that Highveld has a single

level of trade in both markets.

Accordingly, we have not granted

Highveld a CEP offset for this final

determination.

Comment 24

Highveld argues that the Department

inappropriately matched U.S.

specification A 515/516 Grade 70 to a

less similar home market product.

Highveld notes the Department’s model

matching program did not match the

U.S. product with the home market

product deemed by Highveld to be the

closest match (SABS 1431 300WA).

Highveld states that even though the

SABS 1431 300WA is the best match

with the U.S. model, in terms of

physical properties such as mechanical

properties and chemical composition,

the model match program automatically

discounted that model because it is

classified as structural quality. Instead,

according to Highveld, the Department’s

model match scenario chose a home

market specification of BS 1501 151

430A as a best match because this

specification is classified as the same

pressure vessel quality as the U.S.

model. Highveld cites the Sales

Verification Exhibit 9 where evidence is

submitted that states that 300WA and

A515/516 tend to be higher strength

with regard to ultimate tensile strength

and yield strength. Highveld claims that

the 430A is a much softer steel than the

U.S. model; that 300WA and A515/516

may be rolled from the same plate but

430A may not; and that the mechanical

and chemical similarities between the

300WA and the A515/516 translate into

cost and value similarities. Highveld

states that since the 430A requires a

different chemical composition and

mechanical properties, it requires

different costs of production. In

conclusion, Highveld reiterates that the

better model match is U.S. model A515/

516 to the home market model 300WA.

Petitioners did not comment on this

issue.

DOC Position

We disagree with respondents. In the

‘‘Fair Value Comparisons’’ section of

this notice we note that when making

product comparisons the Department

uses the following criteria listed in

order of preference: paint, quality,

specification and/or grade, heat

treatments, standard thickness, standard

width, whether or not checkered, and

descaling. Based on the Department’s

model matching hierarchy, products of

the same quality will be matched to one

another before being matched on the

basis of similar product specifications.

Consequently, this comment is moot, as

changing the plate specification

weighting as advocated by respondents

will not effect the results of the

Department’s model match program.

Comment 25

With regard to U.S. warranty expense,

Highveld urges the Department to

utilize the more precise percentage

calculated during the Sales Verification

at Newco. According to respondent, at

the start of verification, Highveld

presented a percentage that it had

calculated as the cost of ‘‘returns’’ (the

cost to Newco of remedying defective

merchandise, similar to warranty

claims). However, Highveld observes

that verifiers decided that this

calculation was not specific enough and

spent considerable time and effort to

recalculate a more specific percentage

(see Highveld’s sales verification report,

at page 59). It is this more specific rate

that Highveld asks the Department to

use to calculate the U.S. warranty

expense for the final determination.

Petitioners state that previously

unreported returns of merchandise

should be deducted from CEP as a

warranty expense. Petitioners separately

argue that another previously

unreported warranty expense should be

subtracted from CEP.

In response to petitioners’ comments,

Highveld reiterates that the more precise

warranty allocation calculated at

verification should be used in the final

determination.

DOC Position

We disagree with respondents.

Although Highveld provided

documentation at verification which it

indicated was a more precise
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61747

determination of U.S. warranty

expenses (see Highveld’s sales

verification report, at pages 58–59), the

Department also found certain

unreported claims and credits relating

to sales of subject merchandise. Because

we are not confident that the amount

Highveld contends is the more precise

amount includes all claims which

should have been reported to the

Department as U.S. warranty expenses,

we are continuing to use the percentage

presented to us at the start of

verification as the cost of ‘‘returns’’ for

this expense in the final determination.

(See Analysis Memo, dated October 24,

1997.)

Comment 26

Petitioners note that the Department

found unreported port of entry and exit

survey charges at the U.S. verification of

Newco. Petitioners state that these

charges are paid by Newco and passed

on to the customers and they should be

deducted from U.S. price as a direct

selling expense. Petitioners argue that

since these charges have not been

included in the computer sales listing,

the Department should apply facts

available to this adjustment. See 19

U.S.C. 1677e and 1677m. Petitioners

argue that the Department should use

the highest survey rates found for any

sale as identified in the Highveld’s sales

verification report.

Highveld notes that it has submitted

a revised database including these

charges and that these charges apply to

CEP sales. Highveld states that these

charges do not apply to EP sales.

Highveld argues that the Department

requested this data and the use of facts

available for these charges is not

appropriate.

DOC Position

We agree with respondent. It is true

that the Department found unreported

port of entry and exit survey charges at

the U.S. verification of Newco. These

charges are paid by Newco and passed

on to the customers and they should be

deducted from U.S. price as a direct

selling expense. These charges have

been included in Highveld’s latest

submission and we have used

Highveld’s submitted port of exit and

entry survey charges for the final

determination.

Comment 27

Petitioners claim that Highveld failed

to report stevedoring and wharfage

charges in its sales listing, but reported

them separately. Petitioners argue that

these fees must be subtracted from the

CEP for the final determination, taking

into account the fees that were verified

(see Highveld’s sales verification

report).

Highveld states that it has included

this information in its revised database,

and that these charges should be

deducted from CEP.

DOC Position

We agree with both parties and have

made this change for the final

determination.

Comment 28

Petitioners state that Highveld failed

to report certain U.S. sales of subject

merchandise (see Highveld’s sales

verification report, at page 31).

Petitioners note that the Court of

International Trade has found that the

‘‘capture of all U.S. sales at their actual

prices is at the heart of the Department’s

investigation,’’ and that the omission of

even one U.S. sales is a ‘‘serious error.’’

See Florex v. United States, 705 F.

Supp. 582, 588 (CIT 1988) and Persico

Pizzamiglio v. United States, 16 CIT 299

(1994). Petitioners state that these

missing sales must be included in the

final determination, and that if the

Department does not have detailed sales

data for these missing sales on the

record, it must resort to facts available.

Highveld notes that there was no

significant failure to report U.S. sales.

Highveld states that Newco manually

identified sales of subject merchandise

and missed several small sales.

Highveld argues that this error is minor

(less than one percent of Highveld’s U.S.

sales) and will not distort the

antidumping calculation. Highveld

further argues that with one minor

exception these sales are the same

merchandise at the same prices as other

sales analyzed by the Department and

urges the Department to exclude these

sales from its antidumping analysis.

DOC Position

We agree with petitioners and have

included these unreported sales in our

analysis for the final determination. As

the Department does not have detailed,

verified sales data for these missing

sales on the record, it is using facts

available for this portion of the final

determination. We fully agree with the

finding of the Court of International

Trade that the ‘‘capture of all U.S. sales

at their actual prices is at the heart of

the Department’s investigation.’’ See

Florex v. United States, 705 F. Supp.

582, 588 (CIT 1988) and Persico

Pizzamiglio v. United States, 16 CIT 299

(1994). It is essential that respondents

fully report this information to the

Department. By not providing complete

information for U.S. sales when such

information was available to Highveld,

we have determined that Highveld

failed to cooperate by not acting to the

best of its ability to comply with a

request for information. See Pasta.

Consequently, the use of adverse facts

available under section 776(b) of the Act

is warranted. As adverse facts available,

we are using the highest calculated nonaberational margin for individual sales

of respondent in this investigation. See

Analysis Memo, dated October 24, 1997.

Comment 29

Petitioners state that marine insurance

on U.S. sales was incorrectly reported

(see Highveld’s sales verification report,

at page 38). Petitioners claim that since

it is not possible to understand whether

this miscalculation occurred in all sales

or just those verified, the Department

should increase all reported marine

insurance by the percentage verified as

facts available.

Highveld counters that the deduction

for marine insurance should not be

based on facts available as the

Department only found that the reported

amount of marine insurance for one

shipment had been under-reported by a

very small amount and marine

insurance was correctly reported for

other transactions. Highveld states that

the Department should add the

corrected amount (38 cents) to marine

insurance for all invoices affected by the

one misreported shipment, but

otherwise use Highveld’s reported data.

DOC Position

We agree with Highveld and have

made this correction for our final

determination.

Comment 30

Petitioners claim that Highveld did

not correctly report the merchandise

processing fee portion of U.S. import

duties. They state that the processing

fees should be changed to the correct

amount as verified, and the corrected

USDTYU factors of 5.7359 percent and

5.135 percent should be applied to 1995

and 1996 sales respectively.

Highveld agrees that the Department

should correct this error. However,

Highveld states that the correct factor

for 1995 is 5.735 percent.

DOC Position

We agree with both parties and have

included the corrected U.S. duty

amounts submitted by Highveld in its

revised sales listing for the final

determination.

Comment 31

Petitioners claim that the interest rate

used to calculate credit expense on CEP

sales through Newco is incorrect.
61748 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Petitioners state that Newco used a

simple average of the applicable interest

rates rather than a weighted average

interest rate, and used initial rates of

interest for a particular loan, regardless

of whether or not the rates fluctuated

(see Highveld’s sales verification report,

at pages 38–40 ). For these reasons,

petitioners believe that the Department

should use the highest rate reported for

any loan as the interest rate applied to

the credit expense calculation for all

CEP sales.

Highveld claims that the Department

exhaustively verified the interest rate

used to calculate CEP interest expenses.

While Highveld continues to argue that

its methodology is reasonable, it notes

that based on information on the record,

the Department could construct a

weighted average interest rate.

DOC Position

We agree with petitioners. The

methodology used by respondent does

not accurately reflect Newco’s cost of

borrowing. Nor does the Department

have complete documentation on all

interest rates where these rates

fluctuated. Even if the Department did

have complete information, it is not the

Department’s responsibility to make

extensive revisions to submitted

information. By not providing verifiable

information for U.S. interest rates when

such information was available to

Highveld, we have determined that

Highveld failed to cooperate by not

acting to the best of its ability to comply

with a request for information. See

Pasta. Consequently, the use of adverse

facts available under section 776(b) of

the Act is warranted. As facts available

the Department is recalculating

Highveld’s credit expenses using the

highest interest rate reported for any

loan for all CEP sales.

Comment 32

Petitioners state that the Department

should not subtract the Regional

Services Council (RSC) levy from

normal value as this tax is not solely

rebated or not collected on exports. (See

19 U.S.C. 1677(a)(6)(B)(iii).) Highveld

indicates, according to petitioners, that

this levy is placed on net sales of the

company, whether or not the

merchandise was sold domestically or

exported to another country. Petitioners

argue that if the Department continues

to regard this levy as a direct selling

expense, then the Department should

make a circumstance of sale adjustment

to add back the amount of tax collected

on the U.S. sales.

Highveld responds that the deduction

from normal value for the RSC levy is

appropriate. Highveld argues that if the

Department changes its treatment of this

expense in the final determination it

must ensure that this expense is treated

in a neutral manner to reflect the fact

that it is an expense incurred for both

home market and U.S. sales.

DOC Position

We agree with petitioners. We have

reviewed the RSC levy since our

preliminary determination and found,

as Highveld itself indicated in its April

7, 1997, submission, that this levy

represents a turnover tax applied to net

sales, regardless of whether the

merchandise was sold for the export or

local market. Since the levy is not

rebated and it is collected on export

sales, it does not qualify as a deduction

from NV under section 773(a)(6)(B) of

the Act. Therefore, for the final

determination we have not adjusted NV

or U.S. price for the RSC levy.

Comment 33

Petitioners state that Highveld

overstated home market credit expenses

(see Highveld’s sales verification report,

at pages 43–44). Petitioners note that

Highveld reported payment dates as the

last day of the month, irrespective of the

actual date of payment. Petitioners state

that since the Department is unable to

verify the accuracy of the home market

credit expense and has found

inaccuracies in the reported amounts

using Highveld’s methodology, the

Department should not adjust normal

value for such a credit expense.

Petitioners further state that if the

Department decides to make the

adjustment, it should recalculate the

adjustment correctly and reduce the

payment period by 30 days for all home

market sales before performing the

credit expense calculation.

Highveld claims that it properly

reported home market credit expenses.

Highveld notes that the Department

found a single calculation error which

was attributable to the calculation of

credit expense on the invoice amount

due, not including a subsequently paid

rebate. Highveld states that payment can

be received before or after the reported

payment date. Highveld explains that

customers tend to pay as late as

possible, making Highveld’s

methodology a conservative one.

Highveld reiterates that it has reported

the only payment date recorded in its

accounting system, and urges the

Department to use its reported home

market credit expense, with the single

exception noted above.

DOC Position

We agree in part with petitioners.

Highveld did not demonstrate at

verification that its payment

methodology is reflective of actual dates

of payment. There is no evidence on the

record to suggest that payment is only

made at the end of the month.

Additionally, the Department notes that

even using Highveld’s reported

methodology there are disprepancies

with Highveld’s reported credit

expenses and those calculated by the

Department. A single example of this

was described in the verification report.

However, a review of verification

exhibits and other reported observations

in Highveld’s database indicates that

there were in fact pervasive

discrepancies, some of which were

minor. For this final determination, as

facts available, the Department has

calculated the actual home market

credit expense for the limited number of

observations for which actual date of

payment information was supplied.

This expense was compared to the

reported expense and we calculated an

average percentage difference. We have

adjusted all reported home market

credit expenses downward by this

percentage difference.

Highveld should have developed a

verifiable methodology for reporting

date of payment or alternatively chosen

a conservative methodology for

reporting these dates. See Certain CutTo-Length Carbon Steel Plate From

Germany, 61 FR 13834, 13841 (March

28, 1996). By not providing verifiable

information for home market credit

expenses when such information was

available to Highveld, we have

determined that Highveld failed to

cooperate by not acting to the best of its

ability to comply with a request for

information. See Pasta. Consequently,

the use of adverse facts available under

section 776(b) of the Act is warranted.

Comment 34

Petitioners stated that errors in the

reported inland freight were discovered

at verification (Highveld’s sales

verification report, at pages 44, 53).

Petitioners explain that these errors

included miscalculations and freight

markups by Highveld. Petitioners

contend that the Department should not

adjust normal value for home market

freight expenses since there are obvious

flaws in the reported data. Petitioners

state that if the Department does adjust

normal value, it should first reduce

reported freight expenses on home

market sales by multiplying the

correction value to account for

calculation inaccuracies, as well as

multiply by the correction value to

account for the markup of freight

charges.
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61749

Highveld counters that inland freight

was not misreported. Highveld states

that the Department discovered a single

error in home market inland freight.

With respect to markup charges,

Highveld notes that these charges only

apply to road haulage, not to all sales.

Highveld claims that this percentage is

an element of its accounting system,

designed to capture actual expenses

(such as miscellaneous shipping fees

like waiting charges) and was not

created for this investigation. Highveld

urges the Department to correct the

single error and otherwise use its

reported home market inland foreign

expenses.

DOC Position

We agree with respondents. Although

petitioners are correct in noting that

during verification we found an error in

one of the calculated inland freight

expenses, we also found instances

where the expense was reported

correctly. Upon review of the

verification exhibits and the markup

charges referred to petitioners, we agree

with Highveld that these charges only

apply to road haulage, and not to all

sales, and that it is captured as an actual

expense in its normal course of

business. As a result, we are correcting

the error referred to above and allowing

all other home market inland freight

charges as reported.

Comment 35

Petitioners note that Highveld was

unable to exclude returns from its home

market data. However, Highveld was

able to report the refunded amount for

such sales in REBATE2H field. At

verification, the Department discovered

that in several instances the amount

reported in REBATE2H field did not

comply with those of the company’s

record keeping system. Therefore,

petitioners contend that the Department

should not reduce the home market

price by REBATE2H when calculating

normal value. Additionally, petitioners

state that for cases where the

REBATE2H field approximates gross

unit price, the sale should be thrown

out of the data pool since a rebate that

large would signify that most, if not all,

of the sale had been returned or

canceled.

Highveld argues that REBATE2H

should be granted in the calculation of

normal value. Highveld states that

where the amounts of the rebate

approximate gross unit price, the

amounts were reported as negatives and

the sale was effectively netted out. With

respect to petitioners’ claim that this

rebate was misreported, Highveld

acknowledges that there were a few

discrepancies related to canceled sales,

but states that the Department verified

that the amounts otherwise reported for

this rebate were accurate. Highveld

urges the Department to use Highveld’s

reported data for this variable for the

final determination, but agrees that the

Department may exclude those sales

where the amounts of REBATE2H

approximate gross unit price.

DOC Position

We agree with both parties that we

should exclude for the final

determination those home market sales

where the amounts of REBATE2H

approximate gross unit price. We note

that the discrepancies found by the

Department at verification pertain to

these sales that we are excluding.

Consequently, we do not agree with

petitioners’ argument that this rebate

should be disallowed for other home

market sales.

Comment 36

Petitioners note that the Department

found errors in the tonnages used to

calculate the data reported in the

REBATE8H field (Highveld’s sales

verification report, at page 51).

Petitioners state that since the

Department could not verify the

accuracy of REBATE8H, it should not be

used as an adjustment to normal value.

However, petitioners state that the

Department should use the reported

REBATE8H as a deduction to price

when doing the cost/price comparison.

Highveld argues that the Department

should not deny it an adjustment for

this rebate. Highveld claims that the

tonnage discrepancy was insignificant.

Highveld explains that the reason for

this difference was that the tonnage

used in the calculation of this rebate

was based on the original sales

submission, prior to the exclusion of

certain sales at the request of the

Department.

DOC Position

We agree with respondent. We

determined that the methodology used

to calculate the per customer amounts of

the rebate was reasonable. As described

in the sales verification report, the

discrepancy identified was small, and

there is no evidence that it affected the

calculation of this rebate. Therefore, for

the final determination we are allowing

the reported amounts for REBATE8H as

adjustments to NV.

Comment 37

Petitioners contend that the

Department should use facts available

for all handling and brokerage charges

on U.S. sales. Petitioners note that

verifiers found that stevedoring and

total handling and brokerage was

understated. Petitioners explain that

verifiers also discovered that the

shipping rates reported by Highveld

were inaccurate (Highveld’s sales

verification report, at page 54).

Petitioners state that the highest

reported rate for any sale for each charge

should be used to calculate the

adjustment as facts available.

Highveld maintains that handling and

brokerage charges on U.S. sales were

properly calculated. Highveld claims

that the discrepancies identified at

verification apply only to specific

shipments, not to all shipments.

Highveld notes that the discrepancy

amounts to less than a rand per ton and

that argues that the Department should

make the corrections described in the

verification report, and otherwise use

Highveld’s reported handling and

brokerage charges.

DOC Position

We agree with both petitioners and

respondent in part. For the final

determination we are using the reported

and brokerage and handling expenses

for one shipment involving certain sales

which we found at verification to be

correct. For a second shipment, we are

correcting the expenses reported for

certain sales which we found at

verification involved only minor

corrections (see Highveld’s sales

verification report, at pages 53–54). For

a third shipment we examined, we

found extensive inaccuracies. Because

we are unable to determine the full

extent of the other inaccuracies found

for other shipments, we are applying the

highest reported brokerage and handling

expense for any U.S. sale to this third

shipment and the remaining U.S.

shipments. See Analysis Memo, dated

October 24, 1997. By not providing

verifiable information for brokerage and

handling expenses when such

information was available to Highveld,

we have determined that Highveld

failed to cooperate by not acting to the

best of its ability to comply with a

request for information. See Pasta.

Consequently, the use of adverse facts

available under section 776(b) of the Act

is warranted.

Comment 38

Petitioners contend that the

Department should use facts available

for U.S. credit expenses because

verifiers found that the U.S. sales trace’s

credit expense was understated

(Highveld’s sales verification report, at

page 57).

Highveld claims that its U.S. credit

expenses were properly calculated.
61750 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Highveld acknowledges that credit

expenses were understated for one U.S.

EP sale, but argues that there is no

evidence that credit expenses for other

U.S. sales were misreported. Highveld

states that the Department should

correct the single error discovered at

verification, but otherwise use

Highveld’s reported data.

DOC Position

We disagree with both petitioners and

respondent. For the two EP sales

examined at verification, one overstated

U.S. credit expense and the other sale

understated this expense; on average

Highveld has overstated these expenses.

Consequently, for this final

determination we are revising reported

credit expense for these two sales and

are otherwise using the reported credit

expenses.

Comment 39

Petitioners claim that Highveld did

not report accurate data for its home

market and U.S. packing expenses

(Highveld’s sales verification report, at

pages 62–63). According to petitioners,

packing materials costs were not

quantified, no accurate information on

labor and overhead was supplied, and

all figures were based on estimates

provided by management of the

company. Petitioners cite 19 U.S.C.

1677m(i) and state that the estimates of

the management cannot be empirically

tested and thus, the data is unverified.

Petitioners also cite 19 U.S.C. 1677e that

states that since the necessary

information is not on the record or

cannot be verified, the Department

should use facts available. Petitioners

suggest that as facts available, the

Department did not adjust the normal

value for home market packing and

create a U.S. packing expense by

inflating the packing material cost

reported for U.S. sales by the average

ratio of all transformation and overhead

costs to all material costs.

Highveld claims that its packing

expenses were calculated in a

reasonable manner. Highveld states that

its accounting system does not account

for separate expense categories under

packaging material. Highveld states that

it provided a reasonable estimate of

packing materials cost and the

Department should use this information

rather than resort to facts available for

the final determination.

DOC Position

We agree with petitioners. At

verification we found that Highveld was

unable to provide an explanation for the

estimated and average costs used to

calculate home market and U.S. packing

expenses. Neither was it able to provide

any documentation to support its

claimed expenses. Because we were

unable to verify this estimated

information, we are denying home

market packing expenses as an

adjustment to NV.

Comment 40

Petitioners argue that Highveld is not

entitled to a deduction from normal

value for the RSPCC levy. In petitioners’

view, this payment is essentially a

payment of dues to a voluntary

organization. Petitioners argue that this

levy is not a tax, and that the only

provision under which this adjustment

could be made would be as a

circumstances of sale adjustment.

However, petitioners claim, it would not

be appropriate to make a circumstances

of sale adjustment for this levy as

adjustments under this provision are

limited to expenses that are bona fide

circumstances of sale and bear a direct

relationship to the sale. Petitioners note

that with respect to credit, warranties or

technical assistance the seller is

conveying to the purchase something of

value. See Certain Welded Carbon Steel

Pipe and Tubes from India, 56 FR

64753, 64757 (December 12, 1991); see

also Mantex v. United States, 841 F.

Supp 1290, 1302–3 (CIT 1993).

Petitioners argue that the RSPCC levy

does not convey any value to the

purchaser of the steel product, and that

the levy is not a function of the buyerseller relationship at all, but is a

function of the relationship between the

seller and the South African Steel

Association. Petitioners claim that the

levy is neither a circumstance of the sale

nor directly related to the sale, and

question the existence of any evidence

of a causal link between the levy and

home market prices.

Highveld maintains that it is entitled

to a deduction from normal value for the

RSPCC payment as a direct selling

expense. Highveld argues that this

payment is directly related to sales as

the amount of the payment is calculated

based on the value of local sales. While

admitting that payment of the RSPCC is

voluntary, Highveld states that it

benefits from the RSPCC payment in the

form of increased home market steel

sales and that steel purchasers also

receive benefits from RSPCC programs.

Highveld claims that this payment does

bear a causal relationship to the sale as

Highveld would not make the payment

in the absence of home market sales.

Highveld maintains that it is not

necessary to demonstrate a causal effect

on prices for the Department to accept

a direct selling expense and that there

is a presumption that the customer is

absorbing the cost of the payment as

part of the total price of the steel.

DOC Position

We agree with petitioners. As

Highveld’s sales verification report and

exhibit 24 indicate, the RSPCC levy is

assessed as a fee based on the quantity

of sales. The amount of the levy is paid

monthly to a fund to which Highveld

voluntarily is a member. The purpose of

the fund is to promote the export sales

of steel produced in the local market.

Highveld claims that it gains benefits

from belonging to the fund by way of

increased home market sales. However,

even if these claims are true, we do not

consider this evidence of the value

gained by purchasers of products

subject to this investigation. As

petitioners correctly point out, the

RSCPP levy appears to represent a

function of the relationship between

Highveld and the organization to which

the levy payments are made, rather than

of the relationship between Highveld

and purchasers of subject merchandise.

We do not believe this to be a

characteristic of a direct selling expense.

Therefore, for purposes of the final

determination, we have not deducted

Highveld’s home market payments of

the levy from NV.

Comment 41

Petitioners claim that the Department

made a clerical error in the preliminary

determination regarding the calculation

of CEP. According to petitioners, the

Department intended to deduct indirect

selling expenses incurred in South

Africa converted from rand to U.S.

dollars, but did not do so.

Highveld takes issue with petitioners

suggestion. Highveld rejects the

argument that the Department should

deduct expenses from normal value

after conversion into a dollar amount.

Highveld also rejects the argument that

indirect selling expenses incurred in the

home market should be deducted from

CEP. Highveld notes that the

Department only deducts from CEP

those indirect selling expenses

associated with a sale to an unaffiliated

customer in the United States. Highveld

states that the expenses at issue were

incurred for activities performed

exclusively in South Africa, are general

in nature, and are incurred for all export

sales. Because these expenses do not

specifically relate to U.S. commercial

activity, Highveld claims they were

properly not deducted. See Calcium

Aluminate Flux From France:

Preliminary Results of Antidumping

Duty Administrative Review, 61 FR

40396, 40397 (August 2, 1996).

Highveld adds that to the extent that
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61751

some portion of these general expenses

might be broadly attributable to U.S.

sales, they would only relate to the sale

by Highveld to Newco and are,

therefore, not expenses attributable to

the sale to the unaffiliated purchaser.

DOC Position

We agree with respondents. The

Department only deducts indirect

selling expenses incurred in the country

of manufacture which are specifically

related to commercial activity in the

United States. (See Calcium Aluminate

Flux From France: Preliminary Results

of Antidumping Duty Administrative

Review, 61 FR 40396, 40397 (August 2,

1996).) At verification, we found that

the expenses at issue were general in

nature and did not relate specifically to

U.S. commercial activity. Therefore,

consistent with our preliminary

determination, we did not deduct these

expenses from CEP for the final

determination.

Suspension of Liquidation

On October 24, 1997, the Department

signed a suspension agreement with

Iscor and Highveld suspending this

investigation. Pursuant to section

734(f)(2)(A) of the Act, we are

instructing Customs to terminate the

suspension of liquidation of all entries

of cut-to-length carbon steel plate from

South Africa. Any cash deposits of

entries of cut-to-length carbon steel

plate from South Africa shall be

refunded and any bonds shall be

released.

On October 14, 1997, we received a

request from petitioners requesting that

we continue the investigation. We

received a separate request for

continuation from the United

Steelworkers of America, an interested

party under section 771(9)(D) of the Act

on October 15, 1997. Pursuant to these

requests, we have continued and

completed the investigation in

accordance with section 734(g) of Act.

We have found the following margins of

dumping:

Manufacturer/producer/exporter

Weightaverage

margin

percentage

Highveld ........................................ 26.01

Iscor .............................................. 50.87

All Other ........................................ 38.36

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determination. As our determination is

affirmative, the ITC will determine,

within 45 days, whether these imports

are causing material injury, or threat of

material injury, to an industry in the

United States. If the ITC’s injury

determination is negative, the agreement

will have no force or effect, and the

investigation will be terminated (see

section 734(f)(3)(A) of the Act). If the

ITC’s determination is affirmative, the

Department will not issue an

antidumping duty order as long as the

suspension agreement remains in force

(see section 734(f)(3)(B) of the Act).

This determination is published

pursuant to section 735(d) of the Act.

Dated: October 24, 1997.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 97–30389 Filed 11–18–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

[A–791–804]

Suspension of Antidumping Duty

Investigation: Certain Cut-to-Length

Carbon Steel Plate From South Africa

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

SUMMARY: The Department of Commerce

(the Department) has suspended the

antidumping duty investigation

involving certain cut-to-length carbon

steel plate (CTL plate) from South

Africa. The basis for this action is an

agreement between the Department and

Iscor Ltd. (Iscor) and Highveld Steel and

Vanadium Corporation Ltd. (Highveld)

to revise their prices to eliminate

completely sales of this merchandise to

the United States at less than fair value.

EFFECTIVE DATE: October 24, 1997.

FOR FURTHER INFORMATION CONTACT:

Charles Rast, Nancy Decker, or Linda

Ludwig, Office of AD/CVD Enforcement

III, Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th & Constitution

Avenue N.W., Washington, D.C. 20230;

telephone (202) 482–5811, (202) 482–

0196, or (202) 482–3833, respectively.

SUPPLEMENTARY INFORMATION:

Background

On December 3, 1996, the Department

initiated an antidumping investigation

under section 732 of the Tariff Act of

1930, (the Act), as amended, to

determine whether imports of CTL plate

from South Africa are being or are likely

to be sold in the United States at less

than fair value (61 FR 64051 (December

3, 1996)). On December 19, 1996, the

United States International Trade

Commission (ITC) notified the

Department of its affirmative

preliminary injury determination (see

ITC Investigation Nos. 731–TA–753–

756). On June 2, 1996, the Department

preliminarily determined that CTL plate

is being, or is likely to be, sold in the

United States at less than fair value

(LTFV), as provided in section 733 of

the Tariff Act of 1930, as amended by

the Uruguay Round Agreements Act (62

FR 31967 (June 11, 1997)).

The Department and Iscor and

Highveld initialed a proposed

agreement suspending this investigation

on September 25, 1997. On September

26, 1997, we invited interested parties

to provide written comments on the

agreement and received comments from

Geneva Steel, Gulf States Steel, Iscor

and Highveld.

The Department and Iscor and

Highveld signed the final suspension

agreement on October 24, 1997.

Scope of Investigation

See Notice of Final Determination of

Sales at Less Than Fair Value: Certain

Cut-to-Length Carbon Steel Plate from

South Africa, signed October 24, 1997.

Suspension of Investigation

The Department consulted with the

parties to the proceeding and has

considered the comments submitted

with respect to the proposed suspension

agreement. In accordance with Section

734(b) of the Act, we have determined

that the agreement will completely

eliminate sales at less than fair value,

that the agreement is in the public

interest, and that the agreement can be

monitored effectively. See Public

Interest Memorandum, October 24,

1997. We find, therefore, that the

criteria for suspension of an

investigation pursuant to section 734(b)

of the Act have been met. The terms and

conditions of this agreement, signed

October 24, 1997, are set forth in Annex

1 to this notice.

Pursuant to section 734(f)(2)(A) of the

Act, the suspension of liquidation of all

entries of cut-to-length carbon steel

plate from South Africa entered or

withdrawn from warehouse, for

consumption, as directed in our Notice

of Preliminary Determination of Sales at

Less Than Fair Value and Postponement

of Final Determination: Certain Cut-toLength Carbon Steel Plate From South

Africa is hereby terminated. Any cash

deposits on entries of cut-to-length

carbon steel plate from South Africa

pursuant to that suspension of

liquidation shall be refunded and any

bonds shall be released.

On October 14, 1997 we received a

request from petitioners requesting that