61754 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

• Valued in accordance with generally

accepted accounting principles;

• Reflective of appropriately allocated

common costs so that the costs necessary for

the manufacturing of the product are not

absorbed by other products; and

• Reflective of the actual cost of producing

the product.

Additionally, a single figure should be

reported for each cost component.

Cost of Manufacturing (COM)

Costs of manufacturing are reported by

major cost category and for major stages of

production. Weighted-average costs are used

for a product that is produced at more than

one facility, based on the cost at each facility.

Direct materials—cost of those materials

which are input into the production process

and physically become part of the final

product.

Direct labor—cost identified with a specific

product. These costs are not allocated among

products except when two or more products

are produced at the same cost center. Direct

labor costs should include salary, bonus and

overtime pay, training expenses, and all

fringe benefits. Any contracted-labor expense

should reflect the actual billed cost or the

actual costs incurred by the subcontractor

when the corporation has influence over the

contractor.

Factory overhead—overhead costs include

indirect materials, indirect labor,

depreciation, and other fixed and variable

expenses attributable to a production line or

factory. Because overhead costs are typically

incurred for an entire production line, an

appropriate portion of those costs must be

allocated to covered products, as well as any

other products produced on that line.

Acceptable cost allocations can be based on

labor hours or machine hours. Overhead

costs should also reflect any idle or

downtime and be fully absorbed by the

products.

Cost of Production (COP)

Is equal to the sum of materials, labor, and

overhead (COM) plus SG&A expenses in the

home market (HM).

SG&A—those expenses incurred for the

operation of the corporation as a whole and

not directly related to the manufacture of a

particular product. They include corporate

general and administrative expenses,

financing expenses, and general research and

development expenses. Additionally, direct

and indirect selling expenses incurred in the

HM for sales of the product under

investigation are included. Such expenses are

allocated over cost of goods sold.

Constructed Value

Is equal to the sum of materials, labor and

overhead (COM) and SG&A expenses plus

profit in the comparison market and the cost

of packing for exportation to the United

States.

Calculation of Suspension Agreement NVs

NVs (for purposes of the Agreement) are

calculated by adjusting the CV and are

provided for both EP and CEP transactions.

In effect, any expenses uniquely associated

with the covered products sold in the HM are

subtracted from the CV, and any such

expenses which are uniquely associated with

the covered products sold in the United

States are added to the CV to calculate the

NV.

Export Price—Generally, a U.S. sale is

classified as an export price sale when the

first sale to an unaffiliated person occurs

before the goods are imported into the United

States. In cases where the foreign

manufacturer knows or has reason to believe

that the merchandise is ultimately destined

for the United States, the manufacturer’s sale

is the sale subject to review. If, on the other

hand, the manufacturer sold the merchandise

to a foreign trader without knowledge of the

trader’s intention to export the merchandise

to the United States, then the trader’s first

sale to an unaffiliated person is the sale

subject to review. For EP NVs, the CV is

adjusted for movement costs and differences

in direct selling expenses such as

commissions, credit, warranties, technical

services, advertising, and sales promotion.

Constructed Export Price—Generally, a

U.S. sale is classified as a constructed export

price sale when the first sale to an

unaffiliated person occurs after importation.

However, if the first sale to the unaffiliated

person is made by a person in the United

States affiliated with the foreign exporter,

constructed export price applies even if the

sale occurs prior to importation, unless the

U.S. affiliate performs only clerical functions

in connection with the sale. For CEP NVs, the

CV is adjusted similar to EP sales, with

differences for adjustment to U.S. and HM

indirect-selling expenses.

Home market direct-selling expenses—

expenses that are incurred as a direct result

of a sale. These include such expenses as

commissions, advertising, discounts and

rebates, credit, warranty expenses, freight

costs, etc. Certain direct-selling expenses are

treated individually. They include:

commission expenses—payments to

unaffiliated parties for sales in the HM.

credit expenses—expenses incurred for the

extension of credit to HM customers.

movement expenses—freight, brokerage and

handling, and insurance expenses.

U.S. direct-selling expenses—the same as

HM direct-selling expenses except that they

are incurred for sales in the United States.

Movement expenses—additional expenses

incidental to importation into the United

States. These typically include U.S. inland

freight, insurance, brokerage and handling

expenses, U.S. Customs duties, and

international freight.

U.S. indirect-selling expenses—include

general fixed expenses incurred by the U.S.

sales subsidiary or affiliated exporter for

sales to the United States. They may also

include a portion of indirect expenses

incurred in the HM for export sales.

FOR EP TRANSACTIONS

+ direct materials

+ direct labor

+ factory overhead

= Cost of Manufacturing

+ home market SG&A

= Cost of Production

+ U.S. packing

+ Profit

= Constructed Value

+ U.S. direct selling expense

+ U.S. commission expense

+ U.S. movement expense

+ U.S. credit expense

¥ HM direct selling expense

¥ HM commission expense 1

¥ HM credit expense

= NV for EP sales

1 If the company does not have HM commissions, HM indirect expenses are subtracted

only up to the amount of the U.S. commissions.

FOR CEP TRANSACTIONS

+ direct materials

+ direct labor

+ factory overhead

= Cost of Manufacturing

+ home market SG&A

= Cost of Production

+ U.S. packing

+ profit

= Constructed Value

+ U.S. direct selling expense

+ U.S. indirect selling expense

+ U.S. commission expense

+ U.S. movement expense

+ U.S. credit expense

+ U.S. further manufacturing expenses (if

any)

+ CEP profit

¥ HM direct selling expense

¥ HM commission expense

¥ HM credit expense

= NV for CEP sales

[FR Doc. 97–30390 Filed 11–18–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–823–808]

Notice of Final Determination of Sales

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

Ukraine

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: November 19, 1997.

FOR FURTHER INFORMATION CONTACT:

Nithya Nagarajan at (202) 482–1324 or

Eugenia Chu at (202) 482–3964, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW., Washington, DC 20230.
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61755

Applicable Statute: Unless otherwise

indicated, all citations to the statute are

references to the provisions effective

January 1, 1995, the effective date of the

amendments made to the Tariff Act of

1930 (the Act) by the Uruguay Round

Agreements Act (URAA). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are to 19

CFR part 353 (1997).

Final Determination: We determine

that certain cut-to-length steel plate

(CTL plate) from Ukraine 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: Certain Cut-to-Length

Carbon Steel Plate From Ukraine, 62 FR

31958 (June 11, 1997), the following

events have occurred:

In June 1997, we verified the

respondent’s questionnaire responses.

On July 23, 1997, the Department issued

its report on verification findings.

Petitioners and Respondent submitted

case briefs on August 22, 1997, and

rebuttal briefs on August 29, 1997. A

public hearing was neither requested

nor held.

On July 28, 1997, the Department

provided interested parties the

opportunity to submit additional

publicly-available information (PAI)

from surrogate countries to value certain

factors of production. The Department

received responses on August 18, 1997,

and comments on August 25, 1997.

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

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. See

memorandum on Scope of

Investigations on Carbon Steel Plate,

from Joseph Spetrini to Robert S.

LaRussa (October 24, 1997).

Period of Investigation (POI)

The POI is April 1, 1996 through

September 30, 1996.

Nonmarket Economy Status

In accordance with section 773(c) of

the Act, the Department normally uses

a factor valuation methodology to

calculate normal value when the

country involved is an NME country

and the Department determines that it

cannot determine normal value based

on the respondent’s prices or costs. In

this investigation, the Government of

Ukraine claims that economic

conditions now prevalent throughout

Ukraine warrant revocation of Ukraine’s

NME-country status.

Regarding the revocation of NME

status, the Department’s analysis centers

around the government’s role in

economic activity. See Final

Determination of Sales at Less Than

Fair Value: Certain Cut-to-Length

Carbon Steel Plate from Poland (58 FR

37205, July 9, 1993). In accordance with

section 771(18)(B) of the Act, in

considering a country’s status, the

Department analyzes the extent to

which resources are allocated by the

market or government, taking into

account government involvement in

currency and labor markets, pricing, and

production and investment decisions.

Where resources are not allocated by the

market, the Department cannot

conclude that home market prices or

costs should be used to calculate normal

value.

As discussed in detail in our

Memorandum on Separate Rates (dated

June 3, 1997), since 1991 the

Government of Ukraine has undertaken

significant market reforms and passed

extensive legislation toward the

development of an economy which can

operate based upon free market

principles. However, in applying the

factors required under section

771(18)(B) of the Act, we have found

that Ukraine’s economy, while in

transition, does not yet qualify as a

market economy under the antidumping

law. Therefore, we have determined that

Ukraine remains an NME within the

meaning of the antidumping statute.

Section 771(18)(B)(i) of the Act

instructs the Department to take into

account the extent to which the

currency of Ukraine is convertible into

the currencies of other countries.

Ukraine introduced a new currency, the

hryvnia, in August of 1996, which has

remained quite stable against the dollar

and other currencies. While the hyrvnia

is traded with the Newly Independent

States, it is not yet convertible

elsewhere. Additionally, the

Government of Ukraine retains control

over the influx of foreign currency into

its domestic economy by requiring that

50% of foreign export earnings be

converted to hryvnias through an

Interbank Currency Exchange set up by

the Government of Ukraine for this

purpose. See Law On A System of

Currency Regulation (August 1993).

Pursuant to section 771(18)(B)(ii) of

the Act, the Department also considers

the extent to which wage rates in the

foreign country are determined by free

bargaining between labor and

management. Although under the Law

on Enterprises in Ukraine a collective

bargaining agreement between

management and workers is obligatory,

it appears that with regard to wage rates

and employment the government

continues to be heavily involved. For

example, Ukraine’s Tariff Rate System

grades all jobs and sets salaries based

upon the level of complexity and

workers’ qualifications, and the

Ministry of Labor establishes job

position criteria through job evaluation

catalogs. See Law On Remuneration on

Labor (March 1995). All state-owned

enterprises must base their wage and

hiring decisions on this system. Nonstate-owned enterprises must compile

their own job classification and wage

rates to reflect the government’s system.

The government also regulates where

and in what manner workers are paid

and provides for criminal penalties for

violations by employers. Id.

Section 771(18)(B)(iii) directs the

Department to examine the extent to
61756 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

which joint ventures or other

investments by foreign firms are

permitted in Ukraine. As a general

matter, Ukraine is open to foreign

investment and the necessary

supporting legislation is in place. Under

Ukraine’s Foreign Investment Law of

1996, its fourth foreign investment law,

registered foreign investors are

guaranteed equal treatment with local

companies. The law also provides

certain protections, including general

guarantees against expropriation,

unhindered transfer of profits and posttax revenues, and a ten-year guarantee

against changes in legislation that affect

these basic protections. In 1996, Ukraine

also added new laws and regulations on

energy and mining investment and

taxation of goods and services imported

by foreign investors. The U.S.-Ukraine

Bilateral Investment Treaty, which took

effect on November 16, 1996, provides

further protection for U.S. investors;

other such treaties exist with, among

others, Canada, France, Germany, and

Italy. Finally, Ukraine is a member of

the New York Convention of 1958 on

the Recognition and Enforcement of

Foreign Arbitral Awards, and has

enacted an international commercial

arbitration law. However, areas of

concern remain for foreign investors, in

particular the reportedly burdensome

and unpredictable arbitration and

enforcement system, and the

prohibition, contained in the Land Code

of 1992, on foreigners owning land in

Ukraine.

With regard to the extent of

government ownership or control of the

means of production, a factor

considered under section 771(18)(B)(iv),

record evidence demonstrates that the

Government of Ukraine has made

significant progress in privatizing stateowned business enterprises. However,

privatization has proceeded unevenly

thus far, with relatively rapid results in

small-scale privatization and a slower

pace for large-scale privatization, and

much of the economy remains in the

hands of the government. Notably,

Ukraine has designated thousands of

companies in sectors such as energy,

communications, metallurgy, defense

industries, and chemicals as ‘‘strategic’’

enterprises and therefore not eligible for

privatization. These firms include most

of Ukraine’s largest companies and

those with the greatest export potential.

In addition, foreign investors can

participate in the privatization process

only through financial intermediaries

(i.e., foreigners cannot acquire

privatization certificates directly).

Finally, in the case of the respondents

in this investigation, their status as

privately-held companies is incomplete.

Although respondents both qualify as

‘‘joint stock companies,’’ the majority of

their shares are still owned by the

government, which has yet to sell its

shares in either company, either through

auction, public tender, or other market

mechanisms. Therefore, even though the

Government of Ukraine’s submissions

indicate that in 1995 and 1996, 34% and

44% respectively of state-owned

enterprises were privatized, it is unclear

whether those figures reflect 100

percent privatization of the enterprises

in question, or some continued level of

government ownership, as is the case

with Azovstal and Ilyich.

Pursuant to section 771(18)(v), the

Department must also address the extent

of government control over the

allocation of resources and over output

and pricing decisions of enterprises.

Even with the process of privatization

continuing, the Government of Ukraine

still retains significant control over the

means of production and in allocating

resources regarding all state-owned

business enterprises, as well as those

enterprises leasing state-owned

enterprises. Under Ukraine’s Law on

Enterprises, state-owned enterprises, or

enterprises leasing state-owned

enterprises, are required to fill state

orders at the request of the government.

Moreover, enterprises which the

Government of Ukraine deems

monopolies are also required to fulfill

state orders, regardless of their form of

ownership. See Law On Supply of

Production For State Needs.

The government also continues to set

domestic prices in some areas of the

economy. According to the Law on

Prices, the government has authority to

set prices on products which affect the

entire economy, to set domestic prices

of monopolies, and to render to the

government any monopoly profits

deemed excessive. Generally, the

government will deem an enterprise a

monopoly where its commodity has 35

percent of the domestic market share.

See On Restricting Monopoly and

Preventing Unfair Competition.

As the above analysis indicates, the

Ukrainian government has put into

action a serious program of economic

reform, particularly since July 1994.

While significant progress has been

made in Ukraine’s transformation to a

market economy, under the analysis

required by section 771(18)(B) of the

Act, we cannot conclude that Ukraine

should be treated as a market economy

for purposes of the antidumping duty

law. While many of the state controls

have been abandoned, functioning

markets have not completely replaced

government controls. Because the

evidence does not demonstrate that

prices and costs in Ukraine adequately

reflect market considerations, we cannot

at this time alter Ukraine’s designation

as a nonmarket economy under the

antidumping law.

Fair Value Comparisons

To determine whether certain carbon

steel plate from Ukraine sold to the

United States by the Ukrainian

exporters receiving separate rates were

made at less than fair value, we

compared the EP to the NV, as specified

in the ‘‘Export Price’’ and ‘‘Normal

Value’’ sections of this notice.

Export Price

For Azovstal and Ilyich, we calculated

EP in accordance with section 772(a) of

the Act, because the subject

merchandise was sold directly to the

first unaffiliated purchaser in the United

States prior to importation and

constructed export price (CEP)

methodology was not otherwise

indicated. In accordance with section

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

compared POI-wide weighted-average

EPs to the factors of production.

We corrected the respondent’s data

for errors and minor omissions

submitted to the Department and found

at verification. We calculated EP in

accordance with our preliminary

calculations.

Normal Value

Section 773(c) of the Act requires the

Department to value the factors of

production, to the extent possible, in

one or more market economy countries

that are at a level of economic

development comparable to that of the

non-market economy country and that

are significant producers of comparable

merchandise.

In our preliminary determination, we

selected Brazil as our surrogate country.

Brazil is an appropriate country for the

reasons set forth in our preliminary

determination. See the January 27, 1997

memorandum from the Office of Policy

discussing our selection of surrogate

countries for Ukraine (Policy Memo).

Since we find no compelling reason to

change this selection (see below for

comments and further analysis), we

have continued to base FMV on the

values of the factors of production as

valued in Brazil.

Factors of Production

We calculated NV based on factors of

production cited in the preliminary

determination, making adjustments for

specific verification findings. To

calculate NV, the verified amounts for

the factors of production were

multiplied by the appropriate surrogate
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61757

value for the different inputs. We have

used the same surrogate sources as in

the preliminary determination with the

exception of overhead, SG&A, and

profit. For the final determination we

based the percentages for overhead,

SG&A and profit on the detailed public

version of CST’s and Usiminas’

financial statements that was placed on

the record of this investigation by

Respondents. See Comment 7, below.

Critical Circumstances

The Department has continued to find

that critical circumstances exist for cutto-length carbon steel plate by all

Ukrainian exporters.

Verification

As provided in section 782(i) of the

Act, we verified the information

submitted by Respondents for use in our

final determination. We used standard

verification procedures, including

examination of relevant accounting and

production records and original source

documents provided by Respondents.

Separate Rates

Comment 1: Separate Rates

Petitioners oppose the Department’s

granting of separate rates to

Respondents. Petitioners argue that the

Department should calculate and apply

a single country-wide rate because

Respondents’ exports of subject

merchandise from Ukraine were subject

to de jure and de facto government

controls, including minimum price and

registration requirements, during the

POI. At verification, Petitioners argue,

the Department found that the

companies were required to register

contracts in order to control prices to

avoid dumping. Also, Petitioners state

that the Department found that export

contracts over $3.5 million are subject to

government approval and that minimum

pricing is mandatory.

Petitioners argue that the

inconsistencies between the

governmental Decrees requiring

registration and a government official’s

representation that registration is

unnecessary until antidumping

proceedings have been initiated led the

Department to conclude that registration

is for monitoring purposes only.

However, Petitioners claim that based

on a straight reading of the laws,

registration is necessary for purposes of

administering the minimum price

requirements and other actions

controlling exports. Petitioners argue

that this requirement is part of a larger

Ukrainian regime controlling export

activities, including the setting of

minimum prices.

Petitioners stress that the Government

of Ukraine publishes ‘‘indicative prices’’

pursuant to a February 10, 1996

Presidential Decree but that the

Department inappropriately concluded

that the decree did not apply to subject

merchandise exported during the POI.

Petitioners contend that the categories

are not exhaustive and include goods

where ‘‘special regimes’’ are applied.

Petitioners argue that this appears to

give the government very broad legal

control over setting prices since the

term is not defined or explained.

Petitioners contend that the Department

should imply that investigations of

subject merchandise fit within the

category of ‘‘special regime’.

Furthermore, Petitioners interpret the

February 24, 1996 Ministry of Foreign

Economic Relations and Trade (MFERT)

Order to mean that the export controls

are applied not only after an

antidumping investigation has been

initiated, but also to prevent the

initiation of such an investigation.

Petitioners point out that the MFERT

Order provides a list of commodities

aimed at preventing antidumping and

that the subject merchandise is on this

list. Therefore the preventive nature of

this order indicates that special export

requirements can, and did, apply to

subject merchandise prior to the

initiation of the antidumping

investigation. Petitioners also point to

statements as described in the

verification report by both Azovstal and

Ilyich that pricing controls have applied

to their exports of steel plate since 1995.

In addition, Petitioners argue that the

government-published price lists are

convincing evidence that minimum

price restrictions were applied to

subject merchandise during the POI.

Thus, the Department should not find

that Azovstal and Ilyich are entitled to

separate rates in the final determination.

Finally, Petitioners state that it is

undisputed that upon initiation of this

investigation, at the very least, the

minimum price and registration

requirements became applicable to

Respondents’ exports of subject

merchandise. Petitioners argue that the

policy behind applying a country-wide

dumping margin, to avoid government

circumvention of antidumping orders, is

prospective in nature. Accordingly,

Petitioners argue, even if the

government controls had not been in

effect during the POI, the prospective

nature of the country-wide margin

policy warrants application of a singlecountry-wide rate. Lastly, Petitioners

argue that the recent government decree

ordering the two respondents to merge

makes clear that the government

exercises direct control. Petitioners

argue that the government is the alter

ego of the companies and that this,

combined with the registration and

minimum price requirements, is the

type of government control that

warrants application of a single countrywide rate.

Respondents counter that the law and

regulation issued on February 10, 1996

authorize the government to establish

price guidelines for monitoring

purposes, in certain circumstances, but

only under the following conditions: (a)

the prices are merely ‘‘indicative’’ and

not mandatory; (b) they may be issued

only for certain goods subject to

antidumping procedures, import

procedures, quotas, licenses, or other

special regimes; and (c) these indicative

prices may be established only to the

extent that these goods may be exported

free from state control, as provided in

Article 20 of Ukraine’s Law ‘‘On Foreign

Economic Activity.’’ Respondents argue

that Article 20, which discusses

antimonopoly must be read together

with the February 10, 1996 Presidential

Decree. Respondents argue that Article

20 provides for state control of the

export and import of weapons and

certain other items (not including the

subject merchandise) and specifically

provides that any organizations,

including state-owned ones, have no

right to prevent other subjects of foreign

economic activity from the free exercise

of such activity. Respondents claim that

this interpretation is consistent with

statements by a MFERT official that no

pricing controls were observed during

the POI, and that the indicative prices

did not apply to the subject

merchandise during the POI.

Respondents further argue that

Petitioners’ theory that a system of

indicative prices instituted after the POI

retroactively translates into a system of

price controls is neither factually correct

nor in accordance with Department

practice. Respondents argue that the

intent of the law and the Department’s

practice has been to permit the

calculation of separate rates where

export prices, during the POI, were set

by respondents rather than the

government. Respondents argue that not

only have all of the conditions for

separate rates have been met, as

evidenced at verification, but the

unilateral actions of both Respondents

to change their legal status from

leaseholding societies to that of stock

companies, and the right to pursue

litigation against the government prove

Respondents’ independence from

government control. Respondents

further argue that Petitioners’ assertion

that registration requirements are part of

the larger Ukrainian regime controlling
61758 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

export activities is nonsense and that

goods subject to export controls, as

defined in the February 10, 1996

Resolution, does not include the subject

merchandise.

Department Position

Based on evidence on the record and

our verification findings, we have

determined that Azovstal and Ilyich are

entitled to separate rates in the final

determination.

The Department’s NME separate rates

policy is based upon a rebuttable

presumption that NME entities operate

under government control and therefore

do not make independent business

decisions. This presumption can only be

overcome by a respondent’s affirmative

showing that it conducts its exporting

activities without government control.

Evidence on the record supports a

finding that Azovstal and Ilyich have

met their affirmative evidentiary

burden.

To establish whether a firm is

sufficiently independent from

government control to be entitled to a

separate rate, the Department analyzes

each exporting entity under the test set

forth in the Final Determination of Sales

at Less Than Fair Value: Sparklers from

the People’s Republic of China, 56 FR

20588 (May 6, 1991) (Sparklers), and as

further developed in Final

Determination of Sales at Less Than

Fair Value: Silicon Carbide from the

People’s Republic of China, 59 FR 2285

(May 2, 1994) (Silicon Carbide). The

Department assigns separate rates in

nonmarket economy cases only if

respondents can demonstrate the

absence of both de jure and de facto

governmental control over export

activities.

The Department considers three

factors which support, though do not

require, a finding of de jure absence of

government control. These factors

include: (1) an absence of restrictive

stipulations associated with an

individual exporter’s business and

export licenses; (2) any legislative

enactments decentralizing control of

companies; or (3) any other formal

measures by the government

decentralizing control of companies.

The Department typically considers four

factors in evaluating whether each

respondent is subject to de facto

governmental control of its export

functions: (1) whether the export prices

(‘‘EP’’) are set by or are subject to the

approval of a governmental authority;

(2) whether the respondent has

authority to negotiate and sign contracts

and other agreements; (3) whether the

respondent has autonomy from the

government in making decisions

regarding the selection of management;

and (4) whether the respondent retains

the proceeds of its export sales and

makes independent decisions regarding

disposition of profits or financing of

losses. See Silicon Carbide.

1. Absence of De Jure Control

As described in our Preliminary

Determination and Memorandum on

Separate Rates, dated June 3, 1997,

Respondents have placed on the

administrative record a number of

submissions to demonstrate absence of

de jure control. These documents

include laws, regulations, and

provisions enacted by the Government

of Ukraine which deregulate Ukrainian

state-owned enterprises and Ukrainian

export trade. Moreover, Respondents

provided laws and regulations

specifically governing their enterprises,

which provide these companies with

legal autonomy to make their own

operational and managerial decisions

during the POI and are evidence of the

good faith effort on the part of the

Government of Ukraine to decentralize

control of state-owned companies. For a

more detailed description of these laws,

see Separate Rates Memorandum, dated

June 3, 1997.

Because the government has now

created a right of ownership of business

enterprises for private persons and

collectives, leaseholding societies, such

as Azovstal and Ilyich, formerly stateowned and operated, are now distinct

legal entities. In general, this ownership

right allows business enterprises to

freely engage in economic activity,

negotiate and sign contracts, and

independently develop business plans.

Collectives, like the leaseholding

societies of Azovstal and Ilyich, may

independently select management

through elections by the workers

collective and may exercise control and

direction over the general director

through a contract between the

enterprise and the general director.

Enterprises, including collectives, may

have their own bank account, and, after

taxes, may keep the profits from their

sales, and engage in foreign economic

activity, generally, without government

interference.

Although there is no longer a general

export licensing regime in place, the

Ukrainian Government continues to

retain de jure control over exports for

certain categories of goods, including

goods subject to antidumping duty

investigations and antidumping duty

orders. Mandatory controls are in place

regarding: (1) the registration of

contracts for export of these goods and

(2) the setting of ‘‘indicative prices’’ for

these goods by the government.

With regard to registration, foreign

economic agreements (contracts) are

registered with MFERT pursuant to the

1994 Order of the President, On

Registration of Certain Types of Foreign

Economic Agreements (Contracts) in

Ukraine Order of the President of

Ukraine, November 7, 1994. Under the

February 24, 1996 MFERT Order, during

the POI, it was necessary to register a

contract for export of subject

merchandise to the United States

because under this Order, the United

States is one of the listed countries and

the subject merchandise is one of the

listed goods. Therefore, contrary to the

Ukrainian Government’s assertions,

contracts for export of the subject

merchandise to the United States during

the POI were legally required to be

registered. However, we find that in this

instance, registration is for statistical

and tax collection purposes, and for

monitoring compliance by exporters

with international trading rules and

agreements. There was no evidence at

verification to indicate that through

registration the Government of Ukraine

did anything other than monitor foreign

economic activity of exports of certain

goods in order to prevent dumping by

exporters subject to antidumping

measures in other countries and thereby

ensure compliance with international

trading rules.

Moreover, even though MFERT must

approve export contracts of over $3.5

million, we find that the purpose of this

exercise is to monitor such activity for

tax collection and to ensure that large

volume exports of goods subject to

antidumping measures or other

international trade agreements are not

being dumped and are in compliance

with the government’s international

agreements (e.g., suspension agreements

with the European Union). Therefore,

we find no evidence to support

Petitioners’ claim that by registering

contracts for sales of subject

merchandise during the POI the

government was controlling export

pricing, per se.

With regard to the setting of prices,

since 1994 the government has set

minimum export prices for certain

categories of goods. While some

minimum export prices are obligatory,

others are more in the nature of

guidelines to assist Ukrainian exporters

in pricing their goods competitively in

various export markets. During the POI,

pursuant to the Decree of the President

of Ukraine On Measures Regarding the

Improvement of Price Policy

Configuration in Foreign Economic

Activity, February 10, 1996, the

Government of Ukraine published these

so-called ‘‘indicative prices’’ on a
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61759

monthly basis. According to the 1996

Decree, minimum prices are mandatory

where the exporter of Ukrainian goods

is subject to antidumping measures

applied by other countries, including

the initiation of antidumping

investigations. The export of the subject

merchandise during the POI was not

subject to the mandatory pricing

controls described. However, as

Petitioners correctly point out, under

this 1996 Decree, merchandise covered

by this investigation was subject to

mandatory pricing after the initiation of

our antidumping investigation.

However, there is no evidence on the

record to support Petitioners

presumption that the subject

merchandise falls within the ‘‘special

regime’’ referred to in the February 1996

Decree. Therefore, we cannot find that

subject merchandise is included in a

special export pricing regime.

In a somewhat analogous situation,

the Department preliminarily

determined that mandatory minimum

export prices set by the Chinese

government, intended to control

worldwide prices of exported honey and

to increase such prices through macroeconomic means, did not preclude the

respondent companies from receiving

separate rates. See Notice of Preliminary

Determination of Sales at Less Than

Fair Value: Honey from the People’s

Republic of China, 60 FR 14725 (March

20, 1995) (Honey). In Honey, the

Department found that, among other

things, the companies were free to

independently negotiate export prices

with their customers above the floor

price. In other words, when considering

the totality of all circumstances, the

Department found in Honey that the

companies had sufficient independence

in their export pricing decisions from

government control to qualify for

separate rates. This is also the case with

Azovstal and Ilyich, both of which the

Department verified to have

independently negotiated export prices

above the minimum prices set by the

Government of Ukraine. See de facto

section below and the Verification

Report, dated July 25, 1997.

Based on evidence on the record, we

find that during the POI there was no de

jure control of export prices of subject

merchandise. Moreover, we find that,

even though there was de jure control of

export prices for subject merchandise

after the initiation of our antidumping

investigation, because the stated

purpose of these minimum prices was to

avoid dumping by Ukrainian exporters,

such measures do not, in and of

themselves, indicate that the

Government of Ukraine controls export

activities of companies. Rather, we have

concluded that, similar to our

determination in Honey, such

government action is not contrary to a

finding of separate rates, because its

only purpose is to avoid dumping

measures applied by other countries and

because it demonstrates an effort on

behalf of the government to comply

with international trading rules as it

enters the world marketplace.

The purpose of applying one countrywide rate in an NME context is to

prevent an NME government from later

circumventing an antidumping order by

controlling the flow of subject

merchandise through exporters which

have the lowest margin. Here, the

requirement of registration and the

setting of floor prices do not

demonstrate that the government can

control exporters in such a manner. To

the contrary, it is evidence of the

government’s good faith attempt to

monitor exports of certain goods to

ensure that such goods are not traded

unfairly.

2. Absence of De Facto Control

Each respondent exporter has

asserted, and we have verified, the

following: (1) each sets its own export

prices subject to indicative prices, as

discussed below; (2) each negotiates

contracts without guidance from any

governmental bodies; (3) each makes its

own personnel decisions with regard to

selection of management through

elections by the members of the

leaseholding societies, and the General

Director and his appointed Deputies

have authority to negotiate and enter

into contracts on behalf of the

enterprise; and (4) each has separate

bank accounts and retains the proceeds

of its export sales (although 50 percent

of foreign currency earnings must be

converted into Ukrainian currency),

uses profits according to its business

needs, and has the authority to sell its

assets and to obtain loans. See

Verification Report, dated July 25, 1997.

In addition, there is no record evidence

indicating that company-specific pricing

during the POI was coordinated among

exporters.

Both Azovstal and Ilyich stated that

prices are negotiated with their

customers and are not subject to

approval or review by the government.

However, both companies also told the

Department’s verifiers that prior to, and

during the POI they were required by

Ukrainian Customs officials to sell

subject merchandise at the minimum

price published monthly by MFERT for

all sales to the U.S. market. See

Verification Report, dated July 25, 1997.

Thus, as discussed above, while there

was no de jure control of export prices

for subject merchandise during the POI,

there was de facto control of such

pricing by the Government of Ukraine.

Nevertheless, as discussed above, we do

not find that setting of minimum prices

to eliminate dumping by exporters

creates sufficient government control

over exporting activities to disqualify

Azovstal and Ilyich from receiving

separate rates.

Furthermore, at verification

additional information and

documentation was provided which

demonstrates that Azovstal and Ilyich

were not controlled by the government,

but were separate legal entities that

were in control of their business

operations and planning during the POI.

See Verification Report at 3–6. For

example, during the POI, both

companies paid rent to the Ukraine

State Property Fund, the government

entity owning the steel plants leased by

both companies, and entered into

negotiations regarding an increase in

rent due to hyperinflation. Verification

Report at 6. Additionally, during the

POI, a Cabinet of Ministers Decree was

issued which attempted to merge the

two respondents. Verification Report,

Exhibit SR–3. However, during that time

both companies continued the

privatization process for state-owned

companies, as was their legal right

under the reforms instituted by the

Government of Ukraine, discussed

above. The merger did not transpire and

shortly after the POI both companies

became public joint stock companies.

Verification Report at 6.

Additionally, when a decree was

issued during the POI by the Ukraine

State Property Fund appointing another

General Director in place of the elected

general director of Azovstal, the

company went to the Ukrainian

Arbitration Court. Verification Report,

Exhibit SR–3. Azovstal claimed that by

law the Ukraine State Property Fund

had no authority to issue a decree which

directly conflicted with legal reforms

regarding a lease-holding society’s right

to elect its own management. Id. As a

result, the Ukraine State Property Fund

issued a second decree voiding the

earlier decree, and Azovstal continues

to have the same duly elected General

Director. Id. Taken together, these

findings provide further proof that

Azovstal and Ilyich were not controlled

by the government but were

independent during the POI.

Based on the record evidence, we find

that various legal reforms did provide

Azovstal and Ilyich the ability to protect

their rights to autonomy in their day to

day business operations, including their

exporting activities. See Separate Rates
61760 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Memorandum, dated June 3, 1997;

Verification Report, dated July 25, 1997.

Consequently, we determine that

there is, legally and factually, absence of

governmental control of export

functions during the POI. Contrary to

Petitioners’ arguments, the Department

does not examine the period after the

POI to determine separate rates.

However, we will continue to closely

examine the effect, in fact and in law,

of actions of the Government of Ukraine

with respect to any reassertion of

government control over the export

activities of these companies. However,

based on the evidence on the record, we

have granted separate rates for this final

determination.

Ukraine-Wide Rate

As stated above, we have granted

separate rates for Azovstal and Ilyich.

However, all other Ukrainian companies

will be subject to the Ukraine-wide rate.

U.S. import statistics indicate that the

total quantity and value of U.S. imports

of certain cut-to-length carbon steel

plate from Ukraine is greater than the

total quantity and value of steel plate

reported by all Ukrainian companies

that submitted responses. Given this

discrepancy, we conclude that not all

exporters of Ukrainian certain cut-tolength carbon steel plate responded to

our questionnaire. Accordingly, we are

applying a single antidumping deposit

rate—the Ukraine-wide rate—to all

exporters in Ukraine (other than the two

named as receiving separate rates),

based on our presumption that those

respondents who failed to respond

constitute a single enterprise, and are

under common control by the Ukraine

government. See, e.g., Final

Determination of Sales at Less Than

Fair Value: Bicycles from the People’s

Republic of China, 61 FR 19026 (April

30, 1996).

This Ukraine-wide antidumping rate

is based on adverse 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 that party as the facts

otherwise available. The statute also

provides that such an adverse inference

may be based on secondary information,

including the information drawn from

the petition.

As discussed above, we have treated

all Ukrainian exporters that did not

qualify for a separate rate as a single

enterprise owned and controlled by the

Government of Ukraine. Because some

exporters of the single enterprise failed

to respond to the Department’s requests

for information, the single enterprise is

considered to be uncooperative. (See

Concurrence Memorandum, dated

October 24, 1997, for the list of

exporters.) In such situations, consistent

with section 776(b)(1) of the Act, the

Department generally selects as adverse

total facts available the higher of the

average of the margin from the petition

or the highest rate calculated for a

respondent in the proceeding. See also,

Notice of Final Determination of Sales

at Less Than Fair Value: Persulfates

from the People’s Republic of China, 96

FR 27222 (May 19, 1997). In the present

case, the average margin in the petition

is higher than any calculated rate.

Accordingly, the Department has based

the Ukraine-wide rate on the average

petition rate of 237.91 percent.

Section 776(c) of the Act provides that

where the Department relies on

‘‘secondary information,’’ the

Department shall, to the extent

practicable, corroborate that information

from independent sources reasonably at

the Department’s disposal. The

Statement of Administrative Action

(SAA), accompanying the URAA (H.

Doc. 316, Vol. 1, 103d Cong., 2d Sess.

870 (1996)), clarifies that the petition is

‘‘secondary information’’ and that

‘‘corroborate’’ requires that the

information relied upon have probative

value.

In accordance with section 776(c) of

the Act, we corroborated the margins in

the petition to the extent practicable.

The information contained in the

petition indicates that petitioners

calculated export price based on: (1) the

import values declared to the U.S.

Customs Service, and (2) an average

export price derived from actual U.S.

selling prices known to petitioners. We

compared the starting prices used by

petitioners, less the importer mark-ups,

to prices derived from contemporaneous

U.S. import statistics and found that the

two sets of prices were consistent. We

also compared the movement charges

used in the petition with the surrogate

values used by the Department in its

company-specific margin calculations

and found them to be consistent.

The information in the petition with

respect to the normal value (NV) is

based on factors of production used by

the petitioners in the production of steel

plate. Petitioners submitted usage

amounts for materials, labor and energy,

adjusted for known differences in

production efficiencies. To account for

differences between the production

processes of petitioners and potential

respondents, Petitioners submitted three

cost models in the petition: (1) Basic

Oxygen Furnace (BOF) Cost Model; (2)

Open-Hearth Furnace Cost Model; and

(3) Weighted Average Normal Value of

the BOF and Open-Hearth methods.

The margins in the petition, which

ranged from 201.61 to 274.82 percent,

were obtained by Petitioners by

comparing the normal values to the

export price developed from customs

values and to export prices developed

from actual U.S. price quotes. For each

method, petitioners submitted estimated

dumping margins for the BOF method,

the open-hearth method and a weightedaverage of the two. See Corroboration

Memorandum, dated June 3, 1997.

Comment 2: Pirated Sales

Petitioners contend that certain

‘‘pirated’’ sales of steel plate produced

by Ilyich should be included in the

margin calculation because there is a

strong likelihood that a large volume of

similar sales may have ultimately

entered the United States. In addition,

Petitioners argue that there is a very

high likelihood that these sales have

gone unreported and the Department

should apply an overall facts available

rate for Ilyich because they did not

properly respond to the Department’s

questionnaires.

Ilyich argues that the Department

properly excluded pirated sales from the

preliminary margin calculations and

should continue to do so for the final

determination. Ilyich argues that it

made these sales believing they were

destined to third countries and had no

knowledge that these sales were

ultimately destined for the United

States. Ilyich argues that at verification

the Department examined two of these

pirated sales and concluded that Ilyich

had no prior knowledge that the

shipments were to be delivered to the

United States. Ilyich further claims that

it is the Department’s practice not to

include such sales in its determinations

under these circumstances and cited

several cases as precedent.
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61761

Department Position

We agree with Respondent. It is the

Department’s practice to include as U.S.

sales only those sales known by the

producer/exporter to be destined for the

United States at the time of sale and

delivery. See, e.g., Final Determination

of Sales at Less Than Fair Value:

Manganese Sulfate from the People’s

Republic of China, 60 FR 52155, 52158

(October 5, 1995); Notice of Final

Determination of Sales at Less Than

Fair Value: Pure Magnesium and Alloy

Magnesium from the Russian

Federation, 60 FR 16440, 16445 (March

30, 1995). Based on findings at

verification, the Department has

determined that these originally nonU.S. bound shipments were delivered to

the U.S. without prior knowledge of

Ilyich. Therefore, consistent with our

preliminary determination and

Department practice, we have not

included the pirated sales in the final

margin calculation for Ilyich.

Comment 3: Surrogate Country

Selection

Respondents argue that Brazil is an

inappropriate surrogate for Ukraine for

several reasons. Respondents state that,

because Ukraine’s economy has

undergone radical transformations in

recent years, the Department should

reconsider its choice of a surrogate

country based upon changed economic

conditions and/or possible industrial

incomparability. Respondents claim that

the Department has shown its

willingness to reconsider its choice of a

surrogate country if a given country is

no longer comparable and cite Certain

Helical Spring Lock Washers from the

People’s Republic of China:

Memorandum to David Binder from

David Mueller, Office of Policy re: AD

Investigation of Sebacic Acid from the

PRC: Non-market Economy Status and

Surrogate Country Selection (9/23/93),

among others, to support their

argument.

Next, Respondents argue that it is the

Department’s preference to select the

country closest to the NME country

under investigation in terms of the GDP

when faced with multiple potential

surrogates and cite several cases to

support this position. For instance,

Respondents compare the instant case to

Final Determination of Sales at Less

Than Fair Value: Beryllium Metal from

Kazakstan, 62 FR 2648 (June 11, 1997),

where the Department rejected Brazil as

a surrogate because Brazil’s GDP was far

in excess of Kazakstan’s. Respondents

argue that the variance between

Ukraine’s GDP and Brazil’s GDP is

similarly excessive. Respondents

contend that Brazil’s Gross Domestic

Product (GDP) is now more than double

that of Ukraine and the World Bank

classifies Brazil within a different tier of

countries than Ukraine. Furthermore,

Respondents claim that Brazil’s

industrial data is maintained via an

accounting system which deviates from

generally accepted accounting

principles because it requires producers

to maintain two separate sets of

financial records, one to report

historical costs of corporate activities

and another to report the effects of

inflation and currency fluctuations on

those corporate costs and revenues.

Respondents further argue that the

Department’s use of Brazilian labor rates

also illustrates the inappropriateness of

using Brazil as a surrogate. However, if

Brazil is chosen as a surrogate,

Respondents argue that surrogate prices

from other countries should be used

where the use of Brazilian prices will

produce distorted results and cite

Certain Cased Pencils from the People’s

Republic of China, 59 FR 55625 (Nov. 8,

1994) (Pencils), as precedent.

Respondents submit that Poland is a

preferable surrogate choice because it is

the only country which satisfies both

statutory criteria of comparable

economic development and significant

production of CTL plate. Respondents

argue that in practice the Department

will change its choice of surrogate

where it finds a compelling reason to

make the change and cite Notice of Final

Determination of Sales at Less Than

Fair Value: Pure and Alloy Magnesium

from the Russian Federation, 60 FR

16440 (March 30, 1995) (Pure

Magnesium from Russia) and Notice of

Final Determination of Sales at Less

Than Fair Value: Pure Magnesium From

Ukraine, 60 FR 16432 (March 30, 1995)

(Pure Magnesium From Ukraine).

Respondents argue that Poland is an

appropriate surrogate in terms of the

similarity of its history of economic

development, industrial infrastructure

and distribution of labor and

production. In addition, Respondents

submit that the quality of data publicly

available from Polish companies

compares to that of Brazil.

Petitioners counter that there is no

basis nor compelling reason for

changing surrogate countries in the final

determination and further emphasize

that the cases Respondents cite, Pure

Magnesium from Russia and Pure

Magnesium from Ukraine, did not

affirmatively state that the Department

will change surrogate countries where

‘‘compelling reasons’’ exist. The

Department did not change surrogate

countries in either case.

Furthermore, Petitioners argue that

Brazil is comparable to Ukraine in terms

of economic development, as recognized

in this case and in other cases involving

Ukraine. Petitioners claim that the

World Bank’s classification for Ukraine

is preliminary and moreover, that this

category contains countries whose per

capita GNPs vary widely, including

some that differ more widely from

Ukraine’s GNP than does Brazil’s.

Furthermore, Petitioners add that when

the Department issued its surrogate

country selection memorandum, it was

aware of the GNP levels of Brazil,

Poland, and Ukraine and stated that all

countries are equally comparable to

Ukraine in terms of economic

development. Petitioners argue that

even if Poland’s GNP is closer, the

Department has already determined that

any such difference is insignificant.

Petitioners argue that per capita GNP is

only one of several measures the

Department considers in determining

the most appropriate surrogate country

and cite Final Results of Antidumping

Duty Administrative Review: Tapered

Roller Bearings and Parts Thereof,

Finished and Unfinished, from

Romania, 62 FR 31075 (June 6, 1997).

Petitioners further argue that Poland’s

rate of per capita GNP growth was

positive, while that of both Brazil and

Ukraine was negative. Additionally, the

purchasing power parity GNP for Brazil

and Poland are virtually the same.

Moreover, citing Technoimportexport v.

United States, 15 CIT 250, 255, 766 F.

Supp 1169, 1175 (1991)

(Technoimportexport), Petitioners argue

that the Department does not have to

choose the most comparable surrogate

country and cite petitioners claim that

Brazil also satisfies the Department’s

other criteria for selection of a surrogate

country.

For example, Petitioners contend,

Brazil is a significant producer of

subject merchandise and there is a

wealth of publicly available information

on factor prices in Brazil. Furthermore,

Petitioners claim that use of Brazil as

the surrogate country will not produce

aberrational results in this investigation

and argue that in the case cited by

Respondents, Pencils, the Department

rejected certain surrogate data because it

pertained to a type of material not used

to produce the subject merchandise.

Moreover, Petitioners claim that the

alleged inconsistencies between

Brazilian accounting methods and

GAAP are not sufficient grounds to

deem financial ratios aberrational since

the Department has extensive

experience dealing with Brazilian

financial statements.
61762 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Petitioners argue that the Department

has obtained reliable Brazilian surrogate

values for virtually all factors of

production and stress that the record

does not contain complete surrogate

values for Poland. Moreover, Petitioners

argue that the data available for Poland

is of lesser quality. For example,

Petitioners claim that the format used in

the Polish financial statements renders

them virtually impossible to use for

purposes of calculating surrogate

financial ratios. Petitioners therefore

argue that Poland does not satisfy the

information-availability criterion that

the Department uses to assess the

appropriateness of a potential surrogate

country.

Finally, Petitioners argue that the

Department should rely only on Brazil

for all surrogate values in the final

determination based on its preference

for using only one surrogate country.

Department Position

We agree with Petitioners and have

continued to use Brazil as the surrogate

country in the final determination.

Section 773(c)(4) of the Act requires the

Department to value the NME

producer’s factors of production, to the

extent possible, in one or more market

economy countries that: (1) are at a level

of economic development comparable to

that of the NME and (2) are significant

producers of comparable merchandise.

As discussed in the preliminary

determination, Brazil is at a level of

economic development comparable to

Ukraine in terms of per-capita GNP

levels and distribution of the labor force

in the varying sectors of the economy.

Furthermore, Petitioners are correct in

stating that even if Poland’s GDP is

closer to that of Ukraine’s than is

Brazil’s, per capita GNP is only one of

the measures that the Department

considers in determining the most

appropriate surrogate country.

Furthermore, Brazil is a significant

producer of comparable merchandise.

Thus, Brazil fulfills both statutory

criteria and qualifies as an acceptable

surrogate for Ukraine under section

773(c)(4) of the Act. See also the January

27, 1997 memorandum from the Office

of Policy discussing our selection of

surrogate countries for Ukraine (Policy

Memo).

Congress provided the Department

with broad discretion in selecting

surrogate countries in NME cases. See

19 U.S.C. 773(c)(1)(B) (valuation of

factors of production shall be based on

the best available information from a

market economy country(s) considered

to be appropriate); see also, Lasko

Metals v. United States, 43 F3d. 1442,

1443 n.3 (Fed. Cir. 1994). As stated

above, Brazil qualifies as an appropriate

surrogate because it satisfies the

statutory criteria listed. Furthermore, we

were able to obtain publicly available

contemporaneous information on all

factor inputs required. Thus, the

selection of Brazil also achieves the

Department’s goals of providing

transparency and reasonable accuracy in

valuing factors. Moreover, our choice of

Brazil provides predictability for

Ukrainian exporters as the Department

has used Brazil as a surrogate for

Ukraine in past antidumping

proceedings. See Initiation of

Antidumping Duty Investigation: Pure

and Alloy Magnesium for the people’s

Republic of China, the Russian

Federation, and Ukraine, 80 FR 21748

(April 26, 1994).

While we have used surrogate prices

for selected surrogate values from

countries other than the selected

surrogate country in previous cases, to

the extent possible it is the

Department’s preference and practice to

rely on information from the first choice

surrogate country to value all factors for

which such information is available. See

Final Determination of Sales at Less

Than Fair Value: Certain Carbon Steel

Butt-Weld Pipe Fittings from the

People’s Republic of China, 57 FR 21058

(May 18, 1992).

Thus, because acceptable public

information from Brazil is available for

all material input factors, it is

unnecessary for us to use data from

other countries. Therefore, the

Department has continued to use only

Brazil as the most appropriate surrogate

country for purposes of this final

determination. See generally, Policy

Memo.

Comment 4: Commissions

Azovstal argues that commissions

were properly excluded from its

database because the company receiving

commissions was not an affiliated

reseller in the United States. Azovstal

further argues that, because the payment

of a commission on a U.S. sale in a nonmarket economy (NME) investigation is

not offset by direct selling expenses on

home market sales, the Department

ignores home market sales and relies

solely on surrogate SG&A expenses in

calculating normal value. Azovstal cites

several cases where the Department has

rejected similar adjustments in prior

NME proceedings, including Final

Determination of Sales at Less than Fair

Value: Coumarin from the People’s

Republic of China, 59 FR 66895

(December 28, 1994); Final

Determination of Sales at Less than Fair

Value: Sparklers from the People’s

Republic of China, 56 FR 20588 (May 6,

1991); and Final Notice of Sales at Less

than Fair Value: Pure Magnesium from

Ukraine, 60 FR 16432 (March 30, 1995).

Petitioners argue that, because these

commissions have been verified and

there is no evidence to indicate that the

rate of the commission was other than

arm’s length, the Department must

deduct these commissions from U.S.

price pursuant to 19 CFR section

353.41(e)(1). Furthermore, Petitioners

claim that the cases cited by Azovstal do

not support its argument and that in this

case, the commissions paid to AST,

Avostal’s reseller in London, have not

been taken into account in the U.S. or

the foreign market price.

Department Position

In accordance with section

772(d)(1)(A), in CEP circumstances, the

Department’s normal practice is to

deduct commissions from U.S. sales

price as direct selling expenses if the

commissions were incurred when

making the sale to the United States.

See, e.g., Notice of Final Determination

of Sales at Less than Fair Value:

Bicycles from the People’s Republic of

China, 61 FR 19026 (April 30, 1996). In

the present case, we do not have CEP

sales and have not deducted

commissions in calculating EP. Azovstal

did not incur any commissions directly

on U.S. sales, as all sales were made

through trading companies not located

in the United States, which incurred the

selling expenses associated with the

individual transactions. Therefore, we

have continued to utilize the

methodology from our preliminary

determination and have not adjusted for

commission expenses on U.S. sales for

this final determination.

Comment 5: Movement Charges

Petitioners argue that the Department

should use facts available to determine

the surrogate value of movement and

storage charges incurred but not

reported by both respondents.

Petitioners argue that Azovstal had

unreported movement charges for which

there are no surrogate values on the

record and that Ilyich did not report the

costs for storage for which there are also

no surrogate values on the record.

Therefore, the Department should apply

facts available.

Azovstal claims that it reported the

appropriate movement charges in its

April 11, 1997 and August 22, 1997,

responses as requested by the

Department. In regards to Petitioners

allegations regarding storage charges,

Azovstal and Ilyich argue that these

charges are not movement expenses but

are direct selling expenses. Respondents

cite the Department’s Antidumping
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61763

Manual which indicates that expenses

are directly related to the sales under

consideration and assert that it is the

Department’s practice to make a

circumstance of sale adjustment for

such expenses. Moreover, both Azovstal

and Ilyich claim that the Department

does not make these adjustments in

NME cases because there is no offset for

home market sales. Both Respondents

argue that consistent with this

methodology, the Department did not

even include a field for warehousing or

storage in its U.S. Sales file. Under the

circumstances, Azovstal argues that the

Department should use its reported

charges rather than facts available.

Therefore, both Azovstal and Ilyich

argue that the Department should make

no adjustments for storage charges for

either company.

Department’s Position

Pursuant to section 773(6)(B), the

Department adjusts normal value for

movement expenses which are incident

to bringing the subject merchandise in

condition packed ready for shipment to

the United States. We verified that

Respondents reported movement

expenses to our satisfaction. Moreover,

the surrogate value that we applied in

our preliminary determination included

all movement and handling charges to

ship subject merchandise from the

factory to the port, which also takes into

account storage/warehousing expenses.

Therefore, any additional deductions for

movement expenses would, in effect,

result in double-counting.

Additionally, we agree with

Respondents’ claim that the Department

does not adjust EP sales for warehousing

expenses under section 772(c)(2)(A). In

an NME case, it is the Department’s

policy to not deduct warehousing

expenses from EP because there is no

comparable adjustment on the home

market side.

Comment 6: Packing Expenses

Petitioners argue that, because there is

no evidence to suggest that the prices on

Respondents’ sales invoices do not

include packing costs, the Department

incorrectly added packing expenses to

Respondents’ reported U.S. prices for

purposes of the preliminary

determination.

Respondents did not comment on this

issue.

Department Position

We agree with Petitioners. We

incorrectly added packing expenses to

export price in the preliminary

determination. Accordingly, for the final

determination we have adjusted for

packing expenses in the calculation of

normal value.

Comment 7: Factory Overhead, SG&A,

and Profit

Petitioners claim that the

Department’s preliminary results did

not include all factory overhead costs

and that a dumping margin cannot

accurately be calculated without the

inclusion of non-depreciation overhead

costs. Although Petitioners have been

unable to find publicly available

information in Brazil, they provided one

integrated Korean steel producer’s

public financial statement (Pohang Iron

& Steel Co., Ltd. (‘‘POSCO’’)) which

provided a detailed list of the types of

non-depreciation expenses incurred as

manufacturing costs. Petitioners urge

the Department to either use the

percentages from POSCO’s financial

statement as facts available to

approximate the proper amount of

factory overhead costs, or use the

Department’s resources to find

additional information on the surrogate

value.

Respondents argue that Petitioners’

claim that surrogate value information

from Brazil on factory overhead must be

adjusted based upon the experience of

a Korean steel producer underscores the

flawed nature of this information and of

the surrogate value information from

Brazil for SG&A and profit. Respondents

argue that the Department should reject

information from Brazil, because it is

insufficient and use information from

Poland in calculating normal value.

Respondents further argue that if the

Department should continue to use

Brazil as the surrogate, it should

recalculate the surrogate overhead,

SG&A, and profit rates in accordance

with generally accepted accounting

principles as the Department did in

Titanium Sponge from the Russian

Federation, 61 FR 3938 (July 29, 1996)

(Titanium Sponge) (see below).

Furthermore, Respondents argue that

the Department was incorrect to use

data from the Brazilian steel producers’

financial statements that was for the

POI. Respondents argue that, consistent

with its prior practice, the Department

should use financial data

contemporaneous with the POI and

assert that the use of a ‘‘constant of

currency’’ accounting system is

inappropriate now that Brazil’s inflation

rate is only at 18 percent. Respondents

provided the 1996 public financial

statements of two Brazilian companies

and provided recalculated ratios for

overhead, SG&A, and profit.

Respondents argue that in Titanium

Sponge from the Russian Federation, 61

FR 3938 (July 29, 1996) (Titanium

Sponge), the Department used only the

line item expenses which corresponded

directly to the factor values which were

calculated. Respondents argue that the

Department should make adjustments to

the reported net income data and further

asserts that, when calculating the SG&A

factor the Department incorrectly

included profit sharing expenses.

Respondents state that profit sharing

expenses do not represent actual

expenses incurred by the companies but

reflect the value of profits shared with

employees and management, dividend

distributions to employees, and annual

taxes on net income.

Petitioners rebut by stating that the

Polish financial statements are

substantially less reliable than the

Brazilian financial statements.

Petitioners claim that, because the

Polish financial statements fail to

separately account for costs of sales and

SG&A costs, any ratios calculated from

the financial statements would be

distorted. Also, Petitioners state that one

of the Polish financial statements

contains no specific information on

factory overhead costs. Petitioners

additionally argue that the Department’s

preliminary calculations are consistent

with Brazilian GAAP and the

Department’s normal methodology for

calculating costs. The Petitioners

maintain that, while the methodology

used in Titanium Sponge was required

by the insignificance of the operating

costs in that case, in this case, the other

general expenses are not insignificant

and were properly included in the

calculated ratios. Petitioners argue that

it is the Department’s practice to

include all non-extraordinary cost items

in its calculations. Thus, Petitioners

argue because SG&A normally includes

other costs like non-operating costs, the

Department should disregard

Respondents’ claim that only those

items nominally identified as SG&A

should be included. Petitioners further

argue that the Department appropriately

included social contributions and profit

sharing costs in its SG&A calculation.

Petitioners additionally assert that

constant currency financial statements

provide the most reasonable measure of

the overhead, SG&A, and profit ratios

because it is the Department’s

preference to base its calculations on

such statements and because the ratios

would be calculated on values that are

on the same basis. Petitioners argue that

the Department should use the 1996

financial statements of CSN previously

submitted by Petitioners.

Finally, Petitioners argue that, if the

Department does use the financial

statements prepared under the corporate

legislative method of accounting or
61764 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

historical cost method, it should revise

the calculations submitted by

Respondents. Petitioners argue that

Respondents have understated the

SG&A costs by excluding certain nonoperating costs and have artificially

reduced net income by ignoring income

actually earned by the companies while

at the same time failing to account for

the increase in net income that results

from not taking certain expenses into

account.

Department Position

We disagree with Petitioners’

suggestion to use the data from a Korean

steel producer’s financial statement to

calculate factory overhead and we also

disagree with Respondents’ suggestion

to use Polish data. It is the Department’s

practice to only use data from those

countries listed as potential surrogates

identified in the Policy Memo (see cases

cited above.) Korea was never identified

as a potential surrogate for the

Ukrainian economy. Although Poland

was identified as a potential surrogate,

it is the Department’s preference to use

a single surrogate country as the source

of data in a NME investigation unless

such value is aberrational or otherwise

inappropriate. See Comment 3.

Therefore, the Department will continue

to use Brazilian data for the final

determination.

We agree with Respondents that the

Department should use the financial

data of producers in the surrogate

country which are contemporaneous

with the POI, and we have done so for

this final determination. In general, the

Department will not seek information

from particular producers in the

surrogate country to value material

inputs or electricity. The exception to

this rule is for overhead, SG&A, and

profit. For these categories of costs, the

Department will seek product-specific

information from producers in the

surrogate country, where possible. See

Notice of Final Determination of Sales

at Less Than Fair Value: Melamine

Institutional Dinnerware Products from

the People’s Republic of China, 62 FR

1708 (January 13, 1997). Based on the

submitted information and the

Department’s own research, we agree

with Respondents that the financial data

from the 1996 income statements of the

two Brazilian steel companies we used

in the preliminary determination, CST

and Usiminas, are the most appropriate

surrogate information available to

calculate the percentages for overhead,

SG&A, and profit for our final

determination. In the preliminary

determination the Department

determined that both CST and Usiminas

were significant producers of

merchandise similar to that under

investigation and both had public

financial statements available for the

Department’s calculations.

When using Brazil as a surrogate

country in the past, including in our

preliminary determination, the

Department used constant currency

financial statements because they adjust

costs for the effects of inflation. Brazil,

in the past, has experienced significant

inflation and significant changes in the

value of its currency. However, in 1996,

the Brazilian economy was no longer in

a state of hyperinflation as its inflation

rate dropped to 18 percent and its

currency stabilized. In nonhyperinflation situations, it is the

Department’s practice to calculate ratios

based upon historical cost financial

statements. See generally, SAA at 164.

The corporate legislative method of

accounting is the primary source for

GAAP in Brazil. Therefore, we have

used the 1996 income statements of CST

and Usiminas, prepared under the

corporate legislative method of

accounting in our final determination.

In contrast to our preliminary

determination, for this final

determination, in order to ensure that

all costs are properly accounted for, we

revised the overhead ratio to include

employee profit sharing in accordance

with our practice. Despite the manner in

which labor costs are packaged (i.e.,

either through straight salary, profit

sharing, etc.), total labor costs remain

the same to the employer. This includes

all profit sharing expenses. See

Porcelain-on-Steel Cookware from

Mexico: Notice of Final Results of

Antidumping Duty Administrative

Review, 62 FR 25908 (May 12, 1997),

where the Department determined that

profit sharing expenses relate to the

compensation of direct labor. Labor is

captured in the cost of manufacturing

which is part of the cost of sales. Thus,

we have included profit sharing in

overhead. However, if a company broke

out profit sharing between employees

and management, as CST has done, we

included management profit sharing in

the SG&A calculation and employee

profit sharing in the overhead

calculation. See Final Determination

Calculation Memorandum, dated

October 24, 1997.

Consistent with prior Department

practice, we have continued to include

social contributions in SG&A for the

final determination. See Final

Determination Calculation

Memorandum, dated October 24, 1997.

See also, Notice of Preliminary

Determination of Sales at Less Than

Fair Value and Postponement of Final

Determinations: Certain Hot-Rolled

Carbon Steel Flat Products, Certain

Cold-Rolled Carbon Steel Flat Products,

Certain Corrosion-Resistant Carbon

Steel Flat Products, and Certain Cut-toLength Carbon Steel Plate From Brazil,

58 FR 7080 (February 4, 1993).

Comment 8: Usage Factors

In the preliminary determination, the

Petitioners argue that the Department

did not calculate the dumping margin

for all of Respondents’ U.S. sales.

Petitioners argue that the Department’s

inability to calculate dumping margins

results directly from Respondents’

failure to provide the factor usage data

required to determine normal value and

that, as a result, the Department should

use adverse facts available to determine

the dumping margins for all U.S. sales

for which Respondents failed to provide

the usage factor information.

Respondents argue that the

Department should not use adverse facts

available to determine dumping margins

for any U.S. sales by Azovstal and Ilyich

because the absence of normal value

matches for these sales was not due to

the companies’ failure to report factor

usage for those sales. Rather, it was the

result of typographical errors which

resulted in incorrect CONNUMU

designations. Respondents argue that

factor usage was provided by both

companies for all sales and should be

used to determine dumping margins.

Azovstal argues that its missing matches

were the result of a typographical error

in the field ‘‘PLCHECK’’ and an error in

the related portion of the CONNUMU

which described the product as such.

Azovstal argues that for all of Azovstal’s

products, the field ‘‘PLCHECK’’ should

be categorized the same way because

Azovstal only produces merchandise

with that characteristic. Azovstal claims

that a review of those CONNUMUs

described by Petitioners as not having

matching normal values in relation to

other CONNUMUs in Azovstal’s U.S.

Sale Listing and Azovstal’s Section D

computer response clearly shows that

the absence of corresponding factor

usages for the CONNUMUs in question

is the result of an inadvertent error.

Ilyich argues that its two CONNUMUs

without corresponding factor usages are

for products identical to those listed

under two other CONNUMUs. Ilyich

argues that when preparing its Section

C Response it inadvertently used two

CONNUMUs for the same products in

two instances. Ilyich argues that, as

such, there is no need to use facts

available. Rather, the Department has all

necessary data and should treat each

pair of corresponding CONNUMUs as a

single CONNUMU.
Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices 61765

Department Position

Petitioners are correct that we did not

calculate the dumping margin for all

U.S. sales because of the absence of

some normal value matches, as

described above. However, while the

Department is always concerned with

such discrepancies, we did not identify

any attempt by Respondents to mislead

the Department or to distort information

on the record, nor does the record

indicate that Respondents were

uncooperative. Rather, the record

indicates that, while the Respondents

inadvertently misreported their

CONNUM listings, they nevertheless

complied with all Department requests

to the best of their ability under the

circumstances. Therefore, we have

determined that such inadvertent errors

do not warrant an overall application of

adverse facts available. Accordingly, for

this final determination we have

corrected all such errors using an

overall average of the final dumping

margins for each Respondent’s U.S.

sales. The details of these errors and

steps we have taken to correct them are

set forth in the Final Determination

Calculation Memorandum, dated

October 24, 1997. See also, Concurrence

Memorandum, dated October 24, 1997.

Comment 9: Surrogate Value for Labor

Respondents argue that the

Department’s calculation of a surrogate

value for labor illustrates the distorted

effects which result from using Brazil as

a surrogate for Ukraine. Respondents

argue that the Department’s BISNIS

report indicates that Ukraine’s hourly

labor rate is less than $1.00. Therefore,

Respondents argue, Poland is a

preferable surrogate because, when

compared to Brazil it is more

comparable in terms of its labor rates.

Furthermore, Respondents claim that

Poland is also more comparable to

Ukraine in terms of the makeup of its

workforce and the percentage of the

workforce engaged in industrial activity.

Petitioners argue that Respondents are

comparing general employment data for

Ukraine to inadmissible new

information regarding Poland.

Petitioners further argue that even if the

Polish information was admissible, it

does not support Respondents’

challenge to the use of Brazil as a

surrogate country because the

information does not provide surrogate

values related to labor costs for making

steel or the costs of providing housing

for workers.

Department Position

As discussed in Comment 3, we have

determined that Brazil is the

appropriate surrogate country for this

investigation. Furthermore, the

Department has determined, that

Brazilian wage rates are not aberrational

but provide a reasonable surrogate value

for the cost of labor for producing steel

and thus, do not warrant an attempt to

find more comparable values. Therefore,

we have continued to use the same labor

calculation used in the preliminary

determination in the final

determination.

Comment 10: Labor Usage Rates

Petitioners argue that, because the

Department examined Azovstal’s

reported labor usage rates at verification

and determined that they were

inaccurate, the Department should

revise Azovstal’s reported labor usage

rates to reflect its verification findings.

Respondents did not comment on this

issue.

Department Position

We agree with Petitioners. We verified

the correct labor rates and have

incorporated those figures for the

purpose of our final determination.

Comment 11: Siliconmanganese Slag

Respondents claim that slag is a byproduct that has relatively little value in

relation to the primary product

produced, with the slag’s market value

depending on its use. Respondents

argue that the Department should not

value siliconmanganese slag using the

full value of ferroalloys since to do so

would produce an aberrational surrogate

factor that is far greater in value than the

slag at issue. Respondents argue that

siliconmanganese slag is a substitute for

manganese ore and is valued in the

market based on its manganese content.

Respondents assert that the proper

valuation for Ukrainian

siliconmanganese slag is a percentage of

the surrogate value of manganese ore,

rather than 100 percent of the value of

ferroalloys.

Petitioners argue that the value of

siliconmanganese should be based on

the value of ferroalloys because

Respondents claim that the input is

used only as a substitute for manganese

ore is unsupported. Furthermore,

Petitioners argue that the figures quoted

by Respondents regarding the alleged

percentage of manganese content in

siliconmanganese slag and the alleged

value of siliconmanganese as a

percentage of manganese ore are based

on an unverified, untimely submitted

letter. However, Petitioners argue that if

the Department does decide to use the

information provided by Respondents,

as facts available, the value of

siliconmanganese slag should be

calculated at a higher percentage of the

value of manganese ore.

Department Position

We agree with Respondents in part.

Based on the Department’s knowledge

of the steel production process and

independent research (including 15

Encyclopedia of Chemical Technology

(4th Ed. 1995) at 963–980 and Velichko,

et al., 1 Stal’ (1993), a Ukrainian article

which explains the typical composition

of siliconmanganese for a specific

Ukrainian plant), we have determined

that the chemical makeup of

siliconmanganese is primarily

manganese. Therefore, we have valued

siliconmanganese slag at 100 percent

the value of manganese ore.

Comment 12: Limestone, Dolomite

Respondents claim that the

Department should not value limestone

and dolomite based upon the full value

of lime. Respondents argue that, not

only is limestone probably the least

expensive of all raw materials used in

the industry, but, based on information

from the U.S. Geological Survey, in the

United States limestone and dolomite

are valued at 8.39 percent and 8.68

percent of lime, respectively.

Respondents claim that the Department

should, therefore, value limestone and

dolomite using the Survey’s

percentages.

Petitioners argue that the

Department’s valuation of limestone and

dolomite is correct. Petitioners claim

that a single value was applied to both

products as information available

because Respondents failed to provide

separate information on each factor.

Petitioners claim that Respondents are

now attempting to file new information

which is untimely, and assert that, even

if this information were admissible, it is

unusable because the alleged values are

based on U.S. statistics. Petitioners

further argue that nothing in the record

supports Respondents’ implication that

the relative value of lime to limestone

in the United States is equivalent to that

in Brazil and that there is no

information regarding the value of

dolomite to limestone in any country.

Department Position

We agree with Petitioners. Moreover,

the Department’s research indicates that

both limestone and dolomite are

equivalent to lime. See Making, Shaping

and Treating of Steel (10th ed. 1985).

We have, therefore, continued to value

limestone and dolomite at the full value

of lime for the final determination.
61766 Federal Register / Vol. 62, No. 223 / Wednesday, November 19, 1997 / Notices

Comment 13: Wood

Respondents claim that the wood it

utilizes in packing/loading was verified

through invoices provided to the

Department.

Petitioners argue that the Department

should use its PAI information and

conversion factor to value wood.

Department Position

Based on both Petitioners’ and

Respondents’ submissions and briefs,

we have used Respondents’ value for

softwood and applied Petitioners’

conversion methodology to calculate a

factor for wood packing. See Final

Determination Calculation

Memorandum, dated October 24, 1997.

Comment 14: Publicly Available

Information (PAI)

Petitioners argue that the Department

should use the factor value information

contained in it submissions because this

information is the only reliable PAI on

the surrogate values of the factors, and

because the information submitted by

Respondents is based on an

inappropriate surrogate country and is

fraught with errors.

Respondents argue that the

Department should not use Petitioners’

PAI. Respondents argue that the

Department should change its surrogate

from Brazil to Poland (Comment 3).

Respondents argue that much of the

information on the record concerning

material factors for Poland are UN

statistics corresponding to the statistics

submitted by Petitioners themselves for

Brazil, as well as to statistics used by

the Department in its preliminary

determination.

Department Position

We do not agree with Petitioners’

contention that its own publicly

available information is the only reliable

information for valuing factors.

However, as stated throughout this

notice, the Department has continued to

use Brazil as the surrogate for the final

determination. Therefore, whether the

information on Poland is reliable is

irrelevant, as we have only used PAI

from Brazil to value factors in this

investigation.

Continuation of Suspension of

Liquidation

On October 24, 1997, the Department

signed a suspension agreement with the

Government of Ukraine (the

Agreement). Therefore, we will instruct

Customs to terminate the suspension of

liquidation of all entries of cut-to-length

carbon steel plate from Ukraine. Any

cash deposits of entries of cut-to-length

carbon steel plate from Ukraine 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 from the

United Steelworkers of America, an

interested party under section 771(9)(D)

of the Act, on October 14, 1997.

Pursuant to these requests, we have

continued and completed the

investigation in accordance with section

734(g) of the Act. We have found the

following margins of dumping:

Manufacturer/producer/exporter

Weight-average percentage

margin

Azovstal .................................... 81.43

Ilyich .......................................... 155.00

Ukraine-Wide Rate ................... 237.91

The Ukraine-wide rate applies to all

entries of subject merchandise except

for entries from Azovstal and Ilyich.

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determination. As our final

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 shall be

terminated. See section 734(f)(3)(A) of

the Act. If, on the other hand, the

Commission’s determination is

affirmative, the Agreement shall remain

in force but the Department shall not

issue an antidumping duty order so long

as (1) the Agreement remains in force,

(2) the Agreement continues to meet the

requirements of subsection (d) and (1) of

the Act, and the parties to the

Agreement carry out their obligations

under the Agreement in accordance

with its terms. 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. 97–30391 Filed 11–18–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–823–808]

Suspension of Antidumping Duty

Investigation: Certain Cut-to-Length

Carbon Steel Plate From Ukraine

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 Ukraine.

The basis for this action is an agreement

between the Department and the

Government of Ukraine wherein the

Government of Ukraine has agreed to

restrict the volume of direct or indirect

exports to the United States of CTL plate

from all Ukrainian producers/exporters

and to revise its 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:

Nithya Nagarajan, or Eugenia Chu,

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) 482–1324, or (202) 482–

3964 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 Ukraine 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 11, 1997, 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 31958, (June 11, 1997)).

The Department and the Government

of Ukraine initialed a proposed

agreement suspending this investigation

on September 24, 1997. On September

25, 1997, we invited interested parties