7206 Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices

words ‘‘Mexico, or Canada’’ are replaced

with ‘‘or in any eligible country’’. The

United States Trade Representative

(USTR) determines what countries are

‘‘eligible’’. As amended, the provision

directs the Secretary of Agriculture, for

the Rural Utilities Service (RUS),

(previously the Rural Electrification

Administration) to require that, to the

extent practicable and the cost not

unreasonable, a borrower use funds lent

under the RE Act only for such

unmanufactured articles, materials, and

supplies, as have been mined or

produced in the United States or eligible

country and only such manufactured

articles, materials, and supplies as have

been manufactured in the United States

or an eligible country substantially all

from articles, materials or supplies

mined, produced, or manufactured, as

the case may be, in the United States or

an eligible country.

This action is intended to provide

borrowers receiving loans made by the

Rural Telephone Bank (RTB) or loans

made or guaranteed by RUS, as well as

material and equipment manufacturers

and the public, with information for

compliance with the amended RE Act

‘‘Buy American’’ provision.

FOR FURTHER INFORMATION CONTACT: For

electric program matters: George

Bagnall, Director, Electric Staff Division,

RUS, U.S. Department of Agriculture,

STOP 1569, 1400 Independence Ave.,

SW., Washington, DC 20250–1569.

Telephone number (202) 720–1900, fax

(202) 720–7491.

For telecommunications program

matters: Orren E. Cameron, III, Director,

Telecommunications Standards

Division, RUS, U.S. Department of

Agriculture, STOP 1598, 1400

Independence Ave., SW., Washington,

DC 20250–1598. Telephone number

(202) 720–8663, fax (202) 720–4099.

SUPPLEMENTARY INFORMATION: Section

342(g) of the Uruguay Round

Agreements Act, amended the RE Act

‘‘Buy American’’ provision by replacing

the words ‘‘Mexico, or Canada’’ with ‘‘or

in any eligible country’’ and by

authorizing the United States Trade

Representative (USTR) to determine

what countries are eligible. The ‘‘Buy

American’’ provision now reads:

‘‘In making loans pursuant to * * *

the Rural Electrification Act of 1936

* * * the Secretary of Agriculture shall

require that, to the extent practicable

and the cost of which is not

unreasonable, the borrower agree to use

in connection with the expenditure of

such funds only such unmanufactured

articles, materials and supplies, as have

been mined or produced in the United

States or in any eligible country, and

only such manufactured articles,

materials, and supplies as have been

manufactured in the United States or in

any eligible country, substantially all

from articles, materials, or supplies

mined, produced, or manufactured, as

the case may be, in the United States or

in any eligible country. For purposes of

this section, an ‘eligible country’ is any

country that applies with respect to the

United States an agreement ensuring

reciprocal access for United States

products and services and United States

suppliers to the markets of that country,

as determined by the United States

Trade Representative.’’

The RUS ‘‘Buy American’’ provision

applies to any loan made by the RTB or

made or guaranteed by the RUS.

Whether a particular product is

domestic or non-domestic for purposes

of the RE Act ‘‘Buy American’’

provision depends upon such factors as

the country of origin of the product and

its component parts and whether the

product is purchased by an electric

borrower or a telecommunications

borrower.

The eligibility status of Canada and

Mexico has not changed. Products

produced in Canada or Mexico

substantially consisting of components

produced in Canada, Mexico, or the

United States and purchased with RTB

or RUS electric or telephone loan funds

are treated as United States domestic

products.

At this time the USTR has determined

that only Canada and Mexico are

eligible countries for purchases made by

telecommunications borrowers.

Therefore, products produced in

countries other than the United States,

Canada, or Mexico and purchased by

RUS telecommunications borrowers are

not treated as domestic products for

purposes of the RE Act ‘‘Buy American’’

provision. The amendment makes no

change in the treatment of these

purchases unless and until the USTR

determines additional ‘‘eligible

countries’’ for telecommunications

borrowers.

At this time, the USTR has

determined that the following countries

have agreements ensuring reciprocal

access regarding products used by

electric borrowers, and are therefore

‘‘eligible countries’’ for purchases made

by electric borrowers:

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Ireland

Israel

Italy

Japan

Korea

Luxembourg

The Netherlands

Norway

Portugal

Singapore

Spain

Sweden

Switzerland

United Kingdom

Products from an eligible country

consisting substantially of components

produced in the United States or any

eligible country and purchased by RUS

electric borrowers with RUS loan funds

will be considered to be domestic

products for purposes of the RE Act

‘‘Buy American’’ provision.

The USTR may at any time declare

one or more additional countries to be

‘‘eligible countries’’ for either electric or

telecommunications borrowers. The

Chair of Technical Standards Committee

‘‘A’’ (Electric) will be the point of

contact for RUS with respect to USTR

determinations of eligible countries.

Each RUS borrower is responsible for

assuring that its procurement complies

with the requirements of the RE Act

‘‘Buy American’’ provision.

RUS is making technical revisions to

its existing forms of loan contracts and

loan contract amendments to conform

them to the RE Act ‘‘Buy American’’

provision as amended. In addition, RUS

will make similar technical revisions to

its standard forms of contracts providing

for the purchase of materials and

equipment and for ‘‘furnish and install’’

type construction. Until these forms are

revised, the borrower should make the

appropriate changes in its contract

forms.

Dated: February 5, 1997.

Wally Beyer,

Administrator, Rural Utilities Service, and

Governor, Rural Telephone Bank.

[FR Doc. 97–3794 Filed 2–14–97; 8:45 am]

BILLING CODE 3410–15–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–427–811]

Certain Stainless Steel Wire Rods

From France: Final Results of

Antidumping Duty Administrative

Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.
Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices 7207

SUMMARY: On October 10, 1996, the

Department of Commerce (the

Department) published the preliminary

results of the second administrative

review of the antidumping duty order

on certain stainless steel wire rods from

France. This review covers Imphy S.A.,

and Ugine-Savoie, two manufacturers/

exporters of the subject merchandise to

the United States. The period of review

(POR) is January 1, 1995, through

December 31, 1995. We gave interested

parties an opportunity to comment on

our preliminary results. Based on our

analysis of the comments received, we

have changed the results from those

presented in the preliminary results of

review.

EFFECTIVE DATE: February 18, 1997.

FOR FURTHER INFORMATION CONTACT:

Stephen Jacques, AD/CVD Enforcement

Group III, Office 9, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, DC 20230;

telephone: (202) 482–3434.

SUPPLEMENTARY INFORMATION:

The 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 the

current regulations, as amended by the

interim regulations published in the

Federal Register on May 11, 1995 (60

FR 25130).

Background

On October 10, 1996, the Department

published in the Federal Register the

preliminary results of the second

administrative review of the

antidumping duty order on certain

stainless steel wire rods from France (61

FR 53199, October 10, 1996). The

Department has now completed this

administrative review in accordance

with section 751 of the Act.

Scope of the Review

The products covered by this

administrative review are certain

stainless steel wire rods (SSWR),

products which are hot-rolled or hotrolled annealed, and/or pickled rounds,

squares, octagons, hexagons, or other

shapes, in coils. SSWR are made of alloy

steels containing, by weight, 1.2 percent

or less of carbon and 10.5 percent or

more of chromium, with or without

other elements. These products are only

manufactured by hot-rolling, are

normally sold in coiled form, and are of

solid cross section. The majority of

SSWR sold in the United States is round

in cross-sectional shape, annealed, and

pickled. The most common size is 5.5

millimeters in diameter.

The SSWR subject to this review is

currently classifiable under subheadings

7221.00.0005, 7221.00.0015,

7221.00.0020, 7221.00.0030,

7221.00.0040, 7221.00.0045,

7221.00.0060, 7221.00.0075, and

7221.00.0080 of the Harmonized Tariff

Schedule of the United States (HTSUS).

Although the HTSUS subheadings are

provided for convenience and Customs

purposes, our written description of the

scope of the order is dispositive.

Verification

As provided in section 782(i) of the

Act, we verified information provided

by the respondent by using standard

verification procedures, including

onsite inspection of the manufacturer’s

facilities, the examination of relevant

sales and financial records, and

selection of original documentation

containing relevant information. Our

verification results are outlined in the

public versions of the verification

reports.

Analysis of Comments Received

We gave interested parties an

opportunity to comment on the

preliminary results. We received

comments and rebuttal comments from

Imphy S.A. and Ugine-Savoie,

manufacturers/exporters of the subject

merchandise (respondents), and from Al

Tech Specialty Steel Corp., Armco

Stainless & Alloy Products, Carpenter

Technology Corp., Republic Engineered

Steels, Talley Metals Technology, Inc.,

and United Steelworkers of America,

AFL-CIO/CLC (petitioners).

Comment 1: Respondents argue that

the Department incorrectly set the

payment date for every U.S. sale to the

projected final results date instead of

only those sales with unreported

payment dates.

Petitioners contend that respondents’

assertion that the Department

incorrectly set the payment dates for all

U.S. sales is wrong. Petitioners argue

that the Department’s computer program

correctly used the projected date of the

final results for only those U.S. sales

with unreported payment dates and that

the Department should reject

respondents’ proposed computer code

correction.

Petitioners further note that the

sample computer printout from the

Department’s preliminary margin

calculations indicates that the date of

payment for all ten sample sales

remained the same after the execution of

the programming language that

established a payment date for those

sales with unreported payment dates.

Petitioners assert that a review of the

Department’s sample sales in the

preliminary results demonstrates that

the Department did not reset the

payment date and therefore there is no

need for the Department to revise the

computer code as recommended by

respondents.

Department’s Position: We agree with

petitioners. In the preliminary results,

the computer program correctly set the

date of payment to the projected final

results date only for those sales with

unreported payment dates. Therefore,

for the final results, we have made no

changes to the computer program.

Comment 2: Respondents allege that

the Department’s formula to calculate

U.S. credit expense for unpaid sales had

two errors. First, respondents contend

that the formula used an unadjusted

gross unit price instead of being based

on the gross unit price less discounts

and billing adjustments plus freight

revenue. Second, respondents assert

that the Department used the home

market interest rate rather than the

appropriate U.S. short-term rate.

Petitioners agree with respondents

that modifications of the computer

program are necessary to adjust gross

price and to use the correct rate of

interest in the credit calculation.

Department’s Position: We agree and

have corrected the calculation of credit

expenses for the final results.

Comment 3: Respondents contend

that the price paid by Imphy to an

affiliated supplier for remelting services

is an arm’s-length price and should not

have been adjusted by the Department.

Respondents assert that the price Imphy

paid for subcontracted remelting

services is a negotiated, arm’s-length

price based on the affiliate’s budgeted

cost for the remelting services that

included both fixed and variable costs.

Respondents argue that this

subcontracting arrangement is fair and

benefits both Imphy and the affiliated

party. In support of their position,

respondents state that the arrangement

allowed the affiliated party to make use

of its excess remelting capacity, and

thus to lower its overall cost of

operations. Respondents also assert that

the arrangement benefits Imphy which

has the ability to efficiently produce

products requiring the remelting

process.

Respondents note that the Department

disregarded the actual price charged by

the affiliated party on the ground that

the price did not reflect variances from
7208 Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices

budgeted costs or SG&A expenses.

However, respondents assert that

variances can go in either direction and

do not affect the arm’s-length nature of

the price. In addition, respondents

claim that arm’s-length prices do not

necessarily have to be at or above cost

of production for purposes of section

773(f)(2). Consequently, respondents

assert that there is no justification for

the Department having adjusted the

price. Also, respondents contend that

the remelting services did not represent

a ‘‘major input’’ for which cost

information is pertinent pursuant to

section 773(f)(3). Accordingly,

respondents argue that the Department

should retract its adjustment to the price

Imphy paid the affiliated party and,

instead, utilize the verified, actual price

paid for such services in computing cost

of manufacture.

Petitioners disagree with respondents

and contend that respondents’’

arguments are similar to those

submitted by a respondent in a Bearings

review that were rejected by the

Department. See Final Results of

Antidumping Duty Administrative

Reviews and Revocation in Part of an

Antidumping Finding: Tapered Roller

Bearings and Parts Thereof, Finished

and Unfinished, from Japan and

Tapered Roller Bearings, Four Inches or

Less in Outside Diameter, and

Components Thereof, from Japan, 61 FR

57629, 57643–4 (November 7,

1996)(Bearings).

Petitioners contend that there is no

statutory requirement that the remelting

cost be a ‘‘major input’’ to the

production of subject merchandise for

the Department to disregard a transfer

price between affiliated parties that is

below cost. Petitioners note that section

773(f)(2) of the amended statute gives

the Department authority to disregard

‘‘any element of value’’ in transactions

between affiliated parties that does not

reflect the market value of the

merchandise.

Petitioners note that Imphy had no

remelter other than its affiliated

supplier to use as a basis for

establishing market value. Accordingly,

the Department examined the cost of the

remelting rather than the transfer price.

Petitioners contend that the

Department’s practice in this regard was

in accordance with Section 773(f)(2) and

consistent with the past practice in the

Bearings review.

Petitioners also disagree with

respondents’’ contention that cost

variances can go in either direction and

do not affect the arm’s-length nature of

the price. Petitioners argue that Imphy

had relied on estimated costs that

understated actual costs. Consequently,

petitioners assert that the addition of the

cost variances permitted the Department

to account for all costs incurred.

Department’s Position: We agree with

petitioners. Pursuant to section

773(f)(2), the Department, in general,

determines whether the affiliated party

prices were below normal market value.

We do not use transfer prices between

related companies if such prices do not

fairly reflect the amount usually

reflected in the sales of the merchandise

under consideration.

As we discussed in the Bearings case,

related party parts or inputs do not need

to be a ‘‘major input’’ for the

Department to examine whether they

are obtained at a transfer price which

reflects their normal market value. Two

separate sections of the Act allow the

Department to disregard transfer prices

for transactions between affiliated

parties: section 773(f)(2) allows us to

disregard such transactions if the

transfer prices for ‘‘any element of

value’’ do not reflect their normal

market value and section 773(f)(3)

allows the Department to disregard such

transactions if the transfer prices for

‘‘major inputs’’ are below their cost of

production.

In this review, the affiliated party did

not sell remelting services to

unaffiliated customers, nor did Imphy

purchase remelting services from any

unaffiliated party during the POR.

Consequently, there were no arm’slength prices to serve as a basis of

comparison. In such situations,

‘‘Commerce generally use[s] the cost of

the components as representative of the

value reflected in the market under

consideration.’’ (See Bearings, 61 FR at

57644; and NSK Ltd. v. United States,

910 F. Supp. 663, 669 (CIT 1995)).

Therefore, in accordance with our

standard practice, we have based the

value of the remelting services on cost,

including variances and SG&A, for the

final results.

Comment 4: Respondents allege that

the Department improperly overstated

the adjustment to cost of manufacture

for products involving remelting

services. Respondents note that in its

preliminary results, the Department

stated that it intended to increase the

cost of manufacture for remelting

services to include the sum of the

affiliated party’s cost variance, activity

variance and SG&A that was not

included in the price that Imphy paid to

the affiliated party. Respondents

contend that the Department adjusted

the total cost of manufacture for those

Imphy products utilizing the remelting

services, instead of adjusting only the

manufacturing cost. Respondents argue

that the Department incorrectly

increased all of the materials, labor and

overhead costs for the product, rather

than adjusting the cost attributable to

the remelting services obtained from the

related party. Respondents argue that

the Department should correct its

calculation error by applying an

adjustment factor.

Petitioners agree with respondents

that the Department overstated the

adjustment to cost of manufacture for

remelting services.

Department’s Position: We agree with

respondents and petitioners. We have

applied the adjustment factor for

remelting cost variances and SG&A to

the cost of remelting only and not to the

total cost of manufacture.

Comment 5: Respondents allege that

the Department should have made a

circumstance-of-sale adjustment to

constructed value (CV) for home market

credit expense. Respondents contend

that the Department should recognize

the propriety of subtracting home

market credit expense from CV as a

circumstance-of-sale (COS) adjustment,

as the Department has previously done

(citing Notice of Final Determination of

Sales at Less Than Fair Value: Large

Newspaper Printing Presses and

Components Thereof, Whether

Assembled or Unassembled, From

Japan, 61 FR 38139, 38147 (July 23,

1996) (Newspaper Printing Presses)).

Respondents argue that the

Department’s general methodology

regarding the determination of normal

value and COS adjustments recognizes

that home market price covers all costs

and expenses, including the imputed

home market credit expense.

Respondents assert that imputed credit

expenses are likewise included in

determining CV and an adjustment

should be made. Respondents contend

that the profit included in the CV

calculation represents the difference

between the home market prices and

production and SG&A expenses

included in CV. They assert that since

home market credit expense is included

in home market price, it is imbedded in

the calculated CV through a

combination of the interest expense and

home market profit. Therefore,

respondents argue that to ensure an

apples-to-apples comparison, the

Department must subtract home market

credit expense from CV as a COS

adjustment.

Petitioners note that respondents’

arguments concerning a COS adjustment

to CV for imputed home market credit

expense were rejected by the

Department in the amended final results

of the first administrative review (See

Amended Final Results of Certain

Stainless Steel Wire Rods from France,
Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices 7209

61 FR 58523, 58524 (November 15,

1996)).

Petitioners note further that in its

amended final, the Department cited

Final Determination of Sales at Less

Than Fair Value: Certain Pasta from

Italy, 61 FR 30326, 30361 (June 14,

1996) which states that the Department

is required to calculate selling, general

and administrative costs, including

interest expenses, based upon the actual

experience of the company. Petitioners

assert that because the interest expense

for CV now reflects actual amounts

incurred and not imputed credit

expense, a COS adjustment for home

market imputed credit is inappropriate.

Petitioners contend that in Newspaper

Printing Presses, the Department also

stated that it can only account for actual

credit expenses in CV and that

‘‘imputed credit is, by its nature, not an

actual expense.’’

Petitioners also disagree with

respondents’ arguments that imputed

credit expenses are ‘‘imbedded in the

calculated CV’’ and therefore subject to

adjustment. Petitioners assert that this

analysis is not valid, as it attempts to

equate the expenses incurred in

production of the product with the final

price of the product by assuming the

profit component necessarily reflects

opportunity costs. Petitioners contend

that respondents’ argument would result

in the assumption that any component

that did not reflect an actual cost is

somehow imbedded in the profit figure

and, hence, require a COS adjustment.

Petitioners argue that such a result

would be inconsistent with the express

statutory language limiting expenses

included in CV to ‘‘actual’’ expenses

(See 19 U.S.C. 1677b(e)).

Department’s Position: We agree with

respondents. As we stated in

Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts

Thereof From France, Germany, Italy et

al.; Final Results of Antidumping Duty

Administrative Reviews, 62 FR 2081,

2119 (January 15, 1997), consistent with

section 773(a)(8) of the Act, an

adjustment to NV is appropriate when

CV is the basis for NV. The Department

uses imputed credit expenses to

measure the effect of specific

respondent selling practices in the

United States and the comparison

market. Therefore, for these final results,

we have deducted imputed credit

expenses as a COS adjustment from CV

in the calculation of NV. To the extent

that the amended final of Wire Rod from

France (See, 61 FR 58523, 58524

(November 15, 1996)) describes the

Department’s methodology differently,

it was in error.

Comment 6: Respondents contend

that the Department’s product

concordance inadvertently matched to

CV those U.S. sales that had a entry date

outside the POR. Respondents request

the Department modify the model match

program to correct this error.

Petitioners agree with respondents

and contend the error should be

corrected for the final results.

Department’s Position: We agree and

have corrected the error for the final

results.

Comment 7: Respondents contend

that the Department should clarify

language regarding its duty assessment

methodology. They assert that the

methodology stated in the preliminary

results is consistent with the assessment

methodology set forth in the

Department’s proposed regulations and

preamble, as well with the duty

assessment methodology stated in Final

Results of Antidumping Duty

Administrative Reviews and Revocation

in Part of an Antidumping Finding:

Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, from

Japan and Tapered Roller Bearings,

Four Inches or Less in Outside

Diameter, and Components Thereof,

from Japan, 61 FR 57629, 57649

(November 7, 1996); however,

respondents claim that the language in

the Department’s preliminary results is

unclear.

Petitioners contend that the

Department’s assessment methodology

must ensure that the full amount of

dumping duties is collected. Petitioners

claim that the Department should follow

the duty assessment language in the

preliminary results of this review and

assess a weighted-average ad valorem

margin calculated by dividing the total

dumping duties due by the total EP and

CEP values calculated by the

Department.

Department’s Position: The

Department will follow the duty

assessment language in the preliminary

results. Therefore, the Department shall

determine, and the U.S. Customs

Service shall assess, antidumping duties

on all appropriate entries. We have

calculated an importer-specific ad

valorem duty assessment rate based on

the ratio of the total amount of

antidumping duties calculated for the

examined sales made during the POR to

the total customs value of the sales used

to calculate those duties. This rate will

be assessed uniformly on all entries of

that particular importer made during the

POR. As noted in the preliminary

results, this is equivalent to dividing the

total amount of antidumping duties,

which are calculated by taking the

difference between statutory NV and

statutory EP or CEP, by the total

statutory EP or CEP value of the sales

compared, and adjusting the result by

the average difference between EP or

CEP and customs value for all

merchandise examined during the POR.

Comment 8: Respondents allege that

the Department’s computer program

erroneously set at zero the profit for any

sale with a negative profit, regardless of

whether the sale passed the

Department’s below-cost test. They

assert that pursuant to section 773(b)(1),

individual sales of a particular product

that are made at a loss are outside the

ordinary course of trade only if 20

percent or more of the sales of that

product are at prices below the cost of

production. Respondents argue that

unless 20 percent or more of the sales

of the product were made below cost, all

sales of the product, including those

sold at a loss, are by definition in the

ordinary course of trade. Respondents

further contend that section 773(e)(2)(A)

provides that the calculation of CV

profit be based on the actual amount of

profit realized on all sales in the

ordinary course of trade of the foreign

like product. They allege that by

excluding the amount of the losses on

certain sales in the ordinary course of

trade, the Department overstated CV

profit.

Department’s Position: We agree with

respondents that this is a ministerial

error and have revised the final results

in order to calculate CV profit on the

actual amount of profit on all sales in

the ordinary course of trade.

Comment 9: Respondents allege that

in the preliminary results, the

Department weight-averaged the profit

percentage calculated on each

individual sale, rather than calculating

an aggregate profit and COP amount and

then calculating the percentage.

Respondents allege that this percentage

methodology is a departure from the

Department’s customary practice and

artificially inflated respondents’ CV

profit rate. Respondents argue that the

Department has recognized that

calculating the CV profit ratio by first

computing a profit percentage for each

home market sales transaction, and then

weight-averaging the percentages by

quantity, introduces serious distortion

into the calculations (see, Final Results

of Antidumping Duty Administrative

Review: Certain Hot-Rolled Lead and

Bismuth Carbon Steel Products from the

United Kingdom, 61 FR 56514

(November 1, 1996)). Respondents

request that the Department make the

same correction in this review.

Department’s Position: We agree with

respondents. In accordance with our

position outlined in Lead and Bismuth
7210 Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices

Carbon Steel Products, we have revised

our computer programming language for

the final results.

Comment 10: Petitioners assert that

the Department should revise its CEP

calculation by deducting all direct and

indirect selling expenses that relate to

U.S. sales as required by statute (see 19

U.S.C. 1677a(d)(1) (1996)). Petitioners

claim the statutory language is

mandatory, allowing no room for

discretion in agency interpretation as to

which expenses may or may not be

deducted.

Petitioners claim that the

Department’s conclusion that the URAA

changed prior law with respect to the

calculation of CEP is not consistent with

the statute or the SAA (see, 19 U.S.C

1677d(1)). They argue that the

Department must deduct all indirect

selling expenses incurred by the foreign

producer or exporter in its home

country that related to U.S. sales (see,

Silver Reed America, Inc. v. United

States, 12 CIT 250, 683 F. Supp. 1393,

1397 (1988).

Petitioners further contend that the

URAA did not limit the types of

deductions to CEP from prior law, but

rather provided a more precise

definition without changing the

calculation of export price or CEP. They

note that the SAA states ‘‘[t]he statute is

intended to merely provide a more

precise definition and not change the

calculation of export price or

constructed export price’’ (see, SAA at

824). Petitioners contend that even if the

SAA suggested a change in agency

practice, it cannot override the plain

statutory language requiring the

deduction of all selling expenses (see,

Chevron U.S.A., Inc. v. National

Resources Defense Council, Inc., 467

U.S. 837, 843 (1984)).

Petitioners argue that even if the

Department determines that all indirect

selling expenses relating to U.S. sales

are no longer deductible from CEP, at a

minimum it must deduct inventory

carrying costs incurred after importation

in calculating CEP, as these costs are

necessarily attributable to U.S. sales. In

support of their position, petitioners cite

Silver Reed and Notice of Final

Determination of Sales at Less Than

Fair Value: Certain Pasta from Italy, 61

FR 30326, 30352 (June 14, 1996).

Respondents contend that petitioners

have submitted the same argument

concerning deduction of indirect selling

expenses in the first administrative

review and that the Department

properly rejected their contention. They

argue that there is nothing new in the

law or the facts of this review that

should cause the Department to

reconsider its decision. Respondents

assert that these indirect expenses

should not be deducted from CEP as

they do not represent expenses

‘‘associated with economic activities

occurring the United States’’ (see, SAA

at 153).

Respondents state the Department’s

approach in this review is consistent

with its practice in other cases (see,

Calcium Aluminate Flux From France;

Preliminary Results of Antidumping

Duty Administrative Review, 61 FR

40396, 40397 (August 2, 1996) and

Preliminary Results of Antidumping

Duty Administrative Reviews of

Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts

Thereof From France, Germany, Italy,

Japan, Romania, Singapore, Thailand

and the United Kingdom, 61 FR 35713,

35716 (July 8, 1996). They also contend

that the Department’s decision is

consistent with the Proposed

Regulations as the commentary of the

Proposed Regulations makes a clear

distinction between expenses associated

with selling to the affiliated reseller in

the United States and those expenses

attributable to the sale made to the

affiliated reseller’s unaffiliated

customer. Respondents claim that the

expenses at issue are clearly expenses

associated with selling to the affiliated

reseller in the United States and thus,

are not properly deducted in the

calculation of CEP.

Finally, respondents disagree with

petitioners’ request to deduct, at a

minimum, inventory carrying costs

incurred after import. Respondents

assert that these expenses relate to the

respondents’ U.S. affiliate and not to the

unaffiliated U.S. customer.

Department’s Position: We disagree

with petitioners. As we stated in the

final results of the first administrative

review of this order (see Certain

Stainless Steel Wire Rods from France:

Final Results of Antidumping Duty

Administrative Review, 61 FR 47874,

47882 (September 11, 1996) (Wire Rod

from France)), the Department does not

deduct indirect expenses incurred in

selling to the affiliated U.S. importer

under section 772(d) of the Act. See

Notice of Final Determination of Sales

at Less Than Fair Value: Certain Pasta

from Italy, 61 FR 30326, 30352 (June 14,

1996). As stated clearly in the SAA,

section 772(d) of the Act is intended to

provide for the deduction of expenses

associated with economic activities

occurring in the United States. See SAA

at 823; see also, GATT 1994

Antidumping Agreement, article 2.4.

However, some of the respondents’

indirect expenses incurred in the home

market are actually associated with

economic activities in the United States.

Specifically, liability insurance

purchased in France is associated with

U.S. economic activities to the extent it

covers subject merchandise while

warehoused in the United States. On the

other hand, some indirect selling

expenses involved in this case relate

solely to the sale to the affiliated

importer. For example, the inventory

carrying costs incurred prior to

exportation relate solely to the sale to

the affiliated importer. Further, unlike

the situation in Pasta from Italy, the

inventory carrying costs in the present

case do not relate exclusively to the

product sold to the unaffiliated

purchaser in the Untied States as

verified by the Department (cf. Pasta

from Italy, 61 FR at 30352). We agree

with petitioners that the inventory

carrying costs incurred after import

relate to respondents’ economic activity

in the United States and are properly

deducted as indirect selling expenses.

Comment 11: Petitioners contend that

the Department should begin its levelof-trade analysis with the starting price

to the unaffiliated purchaser, as

required by statute (See 19 U.S.C.

1677a(b)). Petitioners argue that

comparison of an adjusted CEP to an

unadjusted normal value in an applesto-oranges comparison and is

inconsistent with past agency practice

(See Porcelain-on-Steel Cooking Ware

from Mexico, 58 FR 43227, 43330

(August 16, 1993) and AOC

International, Inc. v. United States, 721

F. Supp. 314, 317 (1989), citing SmithCorona Group v. United States, 713 F.2d

1568, 1572 (Fed. Cir. 1983), cert. denied,

465 U.S. 1022 (1984)).

Petitioners argue that use of the

starting CEP price as the basis of the

level-of-trade comparison would result

in a finding of no differences in levels

of trade between CEP and normal value

(NV) sales and, thus, no basis for a CEP

offset. Thus, they contend that by

defining the CEP level of trade based on

an adjusted price rather than the starting

price, the Department has created a

level of trade for CEP sales that is

different from the EP sales and the NV

sales, even though in commercial reality

the level of trade of all these sales is the

same.

Respondents argue that petitioners

challenged the Department’s decision to

grant a CEP offset in the first

administrative review and that the

Department rejected their argument.

Respondents contend that the

Department’s decision in this review is

consistent with the first administrative

review as well as other reviews (See

Tapered Rolling Bearings, 61 FR 57391,

57395; Large Newspaper Printing

Presses, 61 FR 38139, 38143; Aramid
Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices 7211

Fiber Formed of Poly Para-Phenylene

Terephthalamide from the Netherlands:

Preliminary Results of Antidumping

Duty Administrative Review, 61 FR

15766, 15768 (April 9, 1996)).

Respondents claim that there is nothing

new in the law or the facts of the second

administrative review to alter the

Department’s decision from those in the

preliminary results.

Department’s Position: We disagree

with petitioners’ contention that the

Department should base the level of

trade on the starting price of CEP sales.

As the Department has previously

discussed (See Wire Rod from France,

and Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts

Thereof from France, Germany, Italy,

Japan, Romania, Singapore, Thailand

and the United Kingdom; Preliminary

Results of Antidumping Duty

Administrative Reviews, 61 FR 35713

(July 8, 1996); Proposed Regulations, 61

FR at 7347), the Department believes

that this position is not supported by

the SAA, and that it is neither

reasonable nor logical. The statute

requires that comparisons between NV

and EP or CEP are to be made, to the

extent practicable, at the same level of

trade. Section 773(a)(1)(B) of the Act.

In CEP cases, the starting price is not

the basis for comparison. The

comparison is based on the CEP, which

is net of the CEP deductions. Thus, it is

the level of trade of that comparison

price (the CEP) that is relevant. If the

starting price is used to determine the

level of trade for CEP sales, the

Department’s ability to make

meaningful comparisons at the same

level of trade (or appropriate

adjustments for differences in levels of

trade) would be severely undermined in

cases involving CEP sales. Using the

starting price to determine the level of

trade of both EP and CEP sales would

result in a finding of different levels of

trade for an EP and a CEP sale adjusted

to a price that reflected the same selling

functions. Moreover, using the adjusted

CEP for establishing the level of trade is

consistent with the purposes of the CEP

adjustment; to determine what the sales

price would have been had the

transaction been an export price sale.

See Proposed Regulations at 61 FR at

7347. Accordingly, we have followed

our practice in Wire Rod from France,

which specifies that the level of trade

analyzed for EP sales is that of the

starting price, and for CEP sales it is the

level of trade of the price after the

deduction of U.S. selling expenses and

profit.

Comment 12: Petitioners assert that

the Department should calculate

dumping margins based on all sales

made during the POR, regardless of

when entries were made (before or after

suspension of liquidation). Petitioners

assert that this practice has been

sustained by the Court of International

Trade (see, The Ad Hoc Committee of

Southern California Producers of Gray

Portland Cement v. United States, 914

F. Supp. 535, 544 (1995) and NSK Ltd.

v. United States, 825 F. Supp. 315, 320

(1993)). They further state that although

the Department may not assess duties

on CEP sales that entered prior to

suspension of liquidation, the Gray

Portland Cement case allows the

Department to use those sales in the

calculation of dumping margins.

Petitioners contend that the

Department’s preliminary decision to

exclude from its analysis sales made

during the POR of merchandise entered

into the U.S. prior to suspension of

liquidation has granted respondents a

license to dump merchandise following

issuance of the antidumping duty order

in this case.

Petitioners argue that in the hearing of

the previous review, counsel for

respondents admitted that the

respondents had restructured their

business in an effort to avoid dumping

liability. Petitioners assert that by

linking sales with entries, respondents

excluded a large part of the high margin

sales from the dumping calculation.

Petitioners assert that there is an issue

of potential price manipulation as their

analysis reveals that respondents

inconsistently priced CEP sales that

entered the U.S. prior to suspension of

liquidation when compared to POR

sales. Specifically, they allege that gross

unit prices differ in a number of

instances for identical CEP products

sold on the same day to the same

customer off the same invoice.

Petitioners argue that these sales from

the same commercial invoice would

constitute a package price to the

customer. They allege that the

respondents should not be permitted to

avoid a finding of dumping by

inconsistent pricing.

Further, petitioners state that their

analysis indicates that the difference in

the net prices cannot be explained by

the difference in inventory carrying

costs between the products.

Lastly, petitioners contend that given

the evidence of differing prices on the

same invoice for products sold in the

POR, some of which entered both prior

and after suspension of liquidation, the

Department should reconsider its

decision to exclude those sales that

entered prior to suspension of

liquidation. If the Department decides to

exclude those sales, petitioners

alternatively request that the

Department average the two gross unit

prices to determine the actual price the

customer paid for the merchandise.

Respondents agree with the

Department’s decision to exclude

merchandise proven to have entered the

U.S. prior to suspension of liquidation.

Respondents argue that the decision is

legally correct. They further assert that

the arguments raised by petitioners are

identical to the arguments made in the

first administrative review which the

Department rejected. Respondents

contend that there is no need for the

Department to reconsider its decision.

Respondents also state that

petitioners’ allegations of inconsistent

pricing and sales manipulation are

devoid of substance, involve distorted

analysis and ignore the verified facts.

Respondents claim that petitioners’

claims are flawed as they are based on

three faulty assumptions: first,

petitioners assume the Control Number

(CONNUM) represents the product as

sold in the U.S., whereas it designates

the product as imported; second,

petitioners are comparing different line

items of an invoice and therefore

comparing sales of different products;

and third, petitioners performed a

misleading comparison of net, rather

than gross, prices.

Respondents note that the Department

examined and rejected this issue in the

first administrative review. Also,

respondents assert that the Department

examined invoices mentioned in

petitioners’ case brief and found no

validity to petitioners’ claim.

Department’s Position: We agree with

respondents. As we stated in Wire Rod

from France and the preliminary results

of this review, the exclusion of sales of

merchandise entered prior to

suspension of liquidation requires that a

respondent must demonstrate, to the

satisfaction of the Department, the

linkage between the entry and the sale.

(See, e.g., Certain Corrosion-Resistant

Carbon Steel Flat Products from

Australia; Preliminary Results of

Antidumping Duty Administrative

Review, 60 FR 42507 (1995) (the

Department did not exclude certain

sales because the respondent was

unable to link the sales to specific presuspension entries)). This stringent

requirement, coupled with the

provisions on critical circumstances,

eliminates any significant risk of using

pre-suspension entries to manipulate or

distort margins following the issuance

of an order.

We disagree with petitioners’

contention that linkage would

encourage dumping as most producers

would not have the necessary linkage

information that would meet the
7212 Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices

Department’s requirements in a

verification. In fact, the necessary

linkage has been demonstrated in only

one other case. (See High-Tenacity

Rayon Filament Yarn, Preliminary

Results of Antidumping Duty

Administrative Review, 59 FR 32181

(June 22, 1994)).

We examined the issue of potential

manipulation of prices and dumping

margins throughout the review,

including at our verifications of

respondents. We found no evidence of

‘‘paired sales,’’ where the price of the

sale that entered prior to suspension of

liquidation was priced lower than a

simultaneous sale of the same

merchandise to the same customer.

After examining the issue, we found no

evidence that respondents were engaged

in price manipulation with sales of prePOR entries (see Final Analysis

Memorandum). In the absence of price

manipulation, and for the reasons

discussed in Wire Rod from France, we

have excluded sales of merchandise

which entered the United States prior to

the suspension of liquidation from the

dumping margin calculation.

Comment 13: Petitioners argue that

the Department should treat post-sale

warehousing incurred by MAC as a

direct selling expense. Petitioners state

that respondents admitted that MAC

incurs post-sale warehousing expenses

in connection with staged-delivery

sales, but failed to identify these costs

as direct U.S. selling expenses.

Petitioners contend that it is

Departmental practice to treat post-sale

warehousing expenses as direct selling

expenses that must be deducted from

U.S. price.

Respondents argue that petitioners’

position that post-sale warehousing

should have been reported as a direct

selling expense is incorrect.

Respondents state that they correctly

reported their warehousing expenses

according to the Department’s

questionnaire instructions. Respondents

contend that the warehousing expenses

do not fit the Department’s criteria for

direct selling expenses and are properly

classified as indirect selling expenses.

Department’s Position: We disagree

with both petitioner and respondent,

since warehousing is not a selling

expense, either direct or indirect. Rather

it is a movement expense and deducted

from the starting price under section

772(c)(2)(A), as confirmed by the

Statement of Administrative Action

(SAA) (see H.R. Doc. 316, Vol. 1, 103d

Cong., 2d sess. (1994) at 823).

Comment 14: Petitioners contend that

the Department should treat costs

incurred by Techalloy with respect to

this antidumping proceeding as direct

U.S. selling expenses. Petitioners argue

that these were actual costs for sales of

subject merchandise imported during

the POR and that respondents did not

include these costs in the direct or

indirect selling expenses or in the

valued-added general and

administrative expenses for products

that were further manufactured by

Techalloy.

Respondents argue that there is no

basis for the Department to treat

administrative costs connected to an

administrative review as direct selling

expenses. Respondents contend that it is

the Department’s practice to exclude

expenses related to participation in an

antidumping proceeding from the

margin calculation, and not treat them

as a selling expense (citing, Color

Television Receivers From the Republic

of Korea: Final Results of

Administrative Review of Antidumping

Review of Antidumping Duty Order, 58

FR 50333, 50336 (September 27, 1993);

Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts

Thereof From France: et al.: Final

Results of Antidumping Duty

Administrative Reviews, 57 FR 28360,

28413 (June 24 1992); Television

Receivers, Monochrome and Color,

From Japan: Final Results of

Antidumping Duty Administrative

Review, 56 FR 38417, 38418 (August 13,

1991)).

Respondents also assert that the

Department’s practice has been upheld

by the Court of International Trade

(citing Federal Mogul Corp. v. United

States, 813 F. Supp. 856 (Ct. Int’l Trade

1993) (‘‘Federal-Mogul’’); Zenith

Electronics Corp. v. United States, 770

F. Supp. 648 (Ct. Int’l Trade 1991);

Daewoo Electronics Co. Ltd. v. United

States, 712 F. Supp. 931 (Ct. Int’l Trade

1989)).

Department’s Position: We disagree

with petitioners. In this review, we have

followed the Department’s policy from

previous reviews, which the CIT

sustained in Daewoo Electronics. We do

not consider expenses incurred in

connection with participating in an

antidumping review to constitute

expenses related to sales made during

this POR. Such expenses are incurred to

defend against an allegation of

dumping. Accordingly, they are not

expenses incurred in selling

merchandise in the United States.

Moreover, to deduct administrative

review related expenses as selling

expenses would effectively penalize

respondents based on their participation

in proceedings before the Department.

Therefore, we have not deducted

administrative review related expenses

for the final results.

Comment 15: Petitioners allege that

respondents failed to report U.S. inland

freight from port to warehouse for

certain U.S. sales.

Respondents contend that their U.S.

freight expense was fully and properly

reported in the questionnaire response.

Furthermore, respondents argue that the

Department’s sales verification at Imphy

confirmed the accuracy of the freight

amounts and that no discrepancies were

found.

Department’s Position: We disagree

with petitioners. We examined this

issue at verification and confirmed the

accuracy of the questionnaire response

for freight. In addition, we found no

evidence that respondents did not

report freight amounts. Therefore, we

have accepted the reported amounts for

freight expense for the final results.

Comment 16: Petitioners contend that

respondents reported erroneous

amounts for freight revenues in

respondents’ questionnaire response.

Petitioners assert that the reported sales

terms are those generally applicable to

the customer, rather than for the specific

sale. Petitioners claim that the

respondents’ supplemental

questionnaire response provided

dubious explanations and raised serious

questions as to the ‘‘special services’’

provided to customers and how the

respondents recorded these costs.

Petitioners contend that the Department

should not accept respondents’ reported

freight revenues for the final results for

two terms of sale given the serious

problems associated with the reported

freight revenue.

Respondents contend that there is no

substance to petitioners’ assertion that

there are errors in respondents’ reported

freight revenue. Respondents assert that

the sales terms that appear on the

invoice and that are reported in the

response are the normal sales terms for

the customer because respondents’

computer system only allows one sales

term to be associated with a customer.

Respondents note that the transactions

listed by petitioners in their case brief

are instances where the respondents

accommodated a customer’s special

request to deliver merchandise using

alternative transportation. Respondents

contend that they bill the customer for

the service and correctly reported this in

the questionnaire response.

Respondents also note that the

Department examined this issue at

verification and found no discrepancies.

Department’s Position: We agree with

respondents. We examined this issue at

verification and found no evidence that

respondents reported incorrect amounts

for freight revenues. At verification, we

selected and examined sales concerning
Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices 7213

this issue that petitioner identified in

their pre-verification comments to the

Department. We found no discrepancies

between respondents’ submissions and

their records. We also found no

evidence to contradict respondents’

claim in the supplemental questionnaire

response that the terms of sale reported

in the U.S. sales file are the normal sales

terms for each customer and that

respondents billed the customer for the

cost of the alternative transportation

source that was reported in the U.S.

sales file as freight revenue. In addition,

we agree with respondents that in cases

where alternative transportation sources

were used, the amount billed the

customer appears as freight revenue on

the U.S. sales file. Thus, for sales that

used the alternative transportation, the

freight revenue was greater than the

expense. Consequently, we have used

the reported freight revenue amounts for

the final results.

Comment 17: Petitioners contend that

the Department should revise its

calculation of constructed value (CV)

profit by excluding from the profit

calculation those sales that were

otherwise excluded from the

Department’s analysis as non-arm’s

length sales. Petitioners assert that the

statute is mandatory in requiring the

Department to calculate CV profit based

on sales in the ordinary course of trade

(See 19 U.S.C. 1677b(e)(2)(A)).

Petitioners contend that transactions

disregarded under section 773(f)(2) as

non-arm’s length sales, and transactions

disregarded as below-cost, are explicitly

defined as outside the ordinary course

of trade (See 19 U.S.C. 1677(15)). Thus,

they contend that section 773(e)(2)(A)

prohibits the Department from using

sales that are outside the ordinary

course of trade in the CV profit

calculation. In addition, petitioners

argue that the calculation of profit is

pursuant to section 773(e)(2)(A) and not

section 773(e)(2)(B). They argue that in

a recent determination, the Department

indicated that while sales at below-cost

prices might be included in the profit

calculation when that calculation was

undertaken pursuant to section

773(e)(2)(B) of the statute, sales that

were otherwise excluded at below-cost

prices could not be included in the

profit calculation where section

773(e)(2)(A) of the statute applies (See

Certain Welded Carbon Steel Pipes and

Tubes from Thailand: Final Results of

Antidumping Duty Administrative

Review, FR 61 56515, 56518 (November

1, 1996)). Accordingly, petitioners assert

that the Department should exclude

non-arm’s length sales in the calculation

of CV profit.

Respondents agree with petitioners

that the Department erroneously

included sales outside the ordinary

course of trade, e.g., non arm’s-length

sales in the CV profit calculation.

Department’s Position: We agree with

both respondents and petitioners that

we should exclude non-arm’s length

sales from the CV profit calculation.

Comment 18: Petitioners contend that

the Department should adjust

respondents’ reported net interest

expenses so that long-term income is

not deducted from total net interest

expenses. Petitioners state that it is the

Department’s policy to calculate net

interest expenses by subtracting shortterm interest income from the total of

short-term and long-term interest

expenses. However, petitioners allege

that the net interest expenses reported

by respondents and used in the

preliminary results, subtracted longterm interest income from total interest

expenses.

Respondents had no rebuttal to this

comment.

Department’s Position: We agree with

petitioners. It is the Department’s policy

in calculating net interest expense for

COP to include interest expense relating

to both long-and short-term borrowings

and to reduce the amount of interest

expense incurred by any interest income

earned on short-term investments on its

working capital (See Department of

Commerce Questionnaire of March 21,

1996 at page D–20). Respondents’ net

interest expense reported to the

Department included a deduction for

long-term interest income; therefore, for

the final results, the Department added

the amount of long-term interest income

to respondents’ net interest expense

figure.

Comment 19: Petitioners contend that

the Department should revise

respondents’ general and administrative

(G&A) expenses to include expenses

recorded in the financial link account.

Petitioners note that in the LTFV

investigation, the Department found that

costs listed in respondents’ financial

link account had not been included in

the expenses reported, even though

respondents could not identify or

reconcile those costs and, therefore, the

Department included the costs in the

calculation of interest and G&A rates

(See Final Determination of Sales at

Less Than Fair Value: Certain Stainless

Steel Wire Rods from France, 58 FR

68865, 68874 (December 29, 1993)).

Petitioners contend that it is the

Department’s policy where additional

costs cannot be identified or reconciled,

to include such costs in the calculation

of COP and CV. Accordingly, petitioners

urge the Department to revise the

general and administrative expenses for

Imphy and Ugine-Savoie to include the

costs and expenses in the financial link

account.

Respondents state that there is no

evidence on the record to suggest that

the account relates in any way to the

subject merchandise and, therefore,

there is no basis for the Department to

include it in the G&A expenses.

Respondents assert that they properly

reported all G&A expenses and that the

Department examined this issue at

verification. They further contend that

the ‘‘Financial Link Account’’ is a

function of the consolidation process

among the several hundred companies

in the Usinor-Sacilor group. Thus,

respondents argue that the account does

not reflect an expense attributable to a

particular company and therefore there

are no grounds for imputing the balance

in the account to respondents’ cost for

subject merchandise.

Department’s Position: We agree with

petitioners. As we did in the LTFV Final

Determination, we have included the

amount in the financial link account in

the calculation of the general and

administrative expenses. At verification,

respondents stated that due to the large

number of companies submitting

information to the parent company,

neither Usinor-Sacilor nor Imphy could

segregate Imphy’s costs from the costs of

the other companies in the UsinorSacilor group that were also included in

the financial link account. Since these

costs could not be specifically identified

or reconciled, it is possible that they

relate to the subject merchandise. It is

the Department’s practice to include all

costs relevant to the subject

merchandise in the calculation of COP

and CV; therefore we included these

additional costs in the calculation of the

G&A rates (See Final Determination of

Sales at Less Than Fair Value: Certain

Stainless Steel Wire Rods from France,

58 FR 68885, 68874 (December 29,

1993)).

Comment 20: Petitioners contend that

the Department should adjust the cost of

manufacture for subcontracted coating

work by an affiliated party. Petitioners

note that at verification, the Department

found that Imphy subcontracts both

remelting and coating to affiliated party

suppliers. Petitioners note that the

Department found that Imphy failed to

report cost variances and GS&A

expenses for the affiliated remelter and

adjusted remelting costs accordingly.

Petitioners state that given the error

found in these costs, and given

respondents’ failure to demonstrate the

arm’s-length nature of the coating costs

reported, the Department should assume

that subcontracted coating costs are
7214 Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices

similarly understated and adjust them

accordingly for the final results.

Petitioners argue that adjustment of

Imphy’s coating expenses for cost

variances and SG&A expenses would be

consistent with law. In support of their

position, petitioners cite decisions by

the Court of International Trade in NSK

Ltd. v. United States, 910 F. Supp. 663,

671 (1995) and Micron Technology v.

United States, 893 F. Supp. 21, 37

(1995).

Respondents argue that under section

773(f)(2) the Department may examine

the arm’s-length nature of transactions

between affiliated parties. Respondents

contend that such an examination is

discretionary and the statute does not

require the Department to do so.

Respondents assert that the coating

work performed by the affiliated party

did not represent a ‘‘major input’’ for

which cost information is pertinent

pursuant to section 773(f)(3).

Respondents note that the coating

amount as a percentage of the cost of

goods sold is extremely small.

Respondents argue that since they

provided all requested information

concerning coating and because the

Department did not request that

respondents provide further coating

information, there is no basis for the

Department to adjust the price Imphy

paid for the subcontracted work.

Department’s Position: We agree with

respondents. During the cost of

production verification, the Department

found that the prices that respondents

paid to an affiliate for subcontracted

remelting did not include the affiliated

party’s cost variance expenses nor the

affiliated party’s selling, general and

administrative expenses and, for that

reason, an adjustment was made to the

reported remelting costs. See Comment

3.

However, the coating is performed by

another affiliated company.

Respondents reported that this affiliated

party performed coating services at

arm’s-length prices. We examined the

issue of arm’s-length prices in depth at

verification. At verification we found

that, other than the affiliated party’s

prices for remelting services, all other

affiliated party prices for inputs were

comparable to arm’s-length prices (for a

more detailed discussion of this issue,

please see the public version of the Cost

of Production Verification Report of

Imphy, S.A., October 7, 1996, at 10–15).

Comment 21: Petitioners allege that

the Department’s computer margin

calculation program did not convert

respondents’ reported U.S. repacking

expenses from a per-pound basis to a

per kilogram basis.

Respondents did not comment on this

issue.

Department’s Position: We agree with

petitioners and have properly converted

the repacking expense for the final

results.

Comment 22: Petitioners contend that

the Department failed to deduct U.S.

commissions in the calculation of U.S.

price for respondents’ CEP and CEP

further manufactured (CEP/FM) sales.

Respondents agree with petitioners.

However, respondents contend that

petitioners’ proposed solution contains

three typographical errors in the

variable names.

Department’s Position: We agree with

petitioners and will deduct U.S.

commissions paid to unaffiliated selling

agents for CEP and CEP/FM sales for the

final results. We also agree with

respondents’ assertion concerning the

typographical errors and we will make

the necessary corrections for the final

results.

Comment 23: Petitioners assert that

although the Department adjusted the

cost of manufacture for remelting

services, the Department failed to adjust

respondents’ cost of manufacture (COM)

for CV for the remelting services.

Petitioners request that the Department

revise respondents’ COM for CV using

the programming language used to

adjust the COM for home market sales.

Respondents assert that in the event

that the Department disagrees with

respondents and determines that it is

proper to adjust COM for products

remelted by the affiliated party, they

recognize that it would also be

appropriate similarly to adjust the

reported cost of manufacture for

constructed value purposes.

Department’s Position: We agree with

petitioners and have revised

respondents’ COM for CV for the final

results.

Comment 24: Petitioners note that

during verification the Department

found that there were two experimental

heat sales in the respondents’ home

market sales database. Petitioners note

that the experimental heat sales were

incorrectly identified as secondary

material in the respondents’ May 21,

1996 submission. Petitioners request

that the Department correct

respondents’ coding for these two sales

for the final results.

Respondents agree with petitioners

concerning the experimental heat sales.

However, respondents contend that the

petitioners’ proposed programming

change to the computer program is

incorrect. Respondents request that the

Department use the computer code

submitted in their rebuttal brief.

Department’s Position: We agree that

the two sales from the experimental heat

should be classified as prime material.

We also agree with respondents

concerning the computer code needed

to correct the error and have corrected

this error in our final results.

Comment 25: Petitioners assert that

the Department should recalculate the

G&A and interest expenses for home

market COP and CV to reflect the

changes the Department made to

respondents’ COM. They note that the

Department revised respondents’ COM

for understating certain costs by failing

to account for total remelting expenses.

Therefore, they contend that G&A and

interest expenses for COP and CV must

be revised accordingly.

Respondents state that in the event

that the Department disagrees with

respondents and determines that it is

proper to adjust COM for products

remelted by the affiliated party, they

recognize that it is also proper to

recalculate G&A and interest amounts,

to ensure that these items remain at the

same percentage of the revised COM.

However, respondents assert that

petitioners’ proposed computer

language corrections are wrong and

suggest modifications.

Department’s Position: We agree with

petitioners and have revised the G&A

and interest expenses for COP and CV.

We also agree with respondents

concerning the computer coding to

correct the error and have included it in

the final results.

Comment 26: Petitioners allege that

the Department made a data entry error

by misspelling one of respondents’

product codes in the computer program.

Department’s Position: We agree and

have corrected this error for the final

results.

Final Results of Review

As a result of our review, we have

determined that the following margins

exist:

Manufacturer/exporter Time period

Margin

(percent)

Imphy/UgineSavoie ...... 1/1/95–12/31/95 6.53

The Department shall determine, and

the Customs service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

United States price and normal value

may vary from the percentages stated

above. The Department will issue

appraisement instructions directly to

the Customs Service.

Furthermore, the following deposit

requirements will be effective upon
Federal Register / Vol. 62, No. 32 / Tuesday, February 18, 1997 / Notices 7215

publication of this notice of final results

of review for all shipments of certain

stainless steel wire rods from France

entered, or withdrawn from warehouse,

for consumption on or after the

publication date, as provided for by

section 751(a)(1) of the Act: (1) the cash

deposit rates for the reviewed

companies will be the rates for those

firms as stated above; (2) if the exporter

is not a firm covered in this review, or

the original investigation, but the

manufacturer is, the cash deposit rate

will be the rate established for the most

recent period for the manufacturer of

the merchandise; and (3) the cash

deposit rate for all other manufacturers

or exporters will continue to be 24.51

percent for stainless steel wire rods, the

all others rate established in the LTFV

investigation. See Amended Final

Determination and Antidumping Duty

Order: Certain Stainless Steel Wire Rods

from France (59 FR 4022, January 28,

1994).

These deposit requirements, when

imposed, shall remain in effect until

publication of the final results of the

next administrative review.

This notice serves as a final reminder

to importers of their responsibility

under 19 CFR 353.26 to file a certificate

regarding the reimbursement of

antidumping duties prior to liquidation

of the relevant entries during this

review period. Failure to comply with

this requirement could result in the

Secretary’s presumption that

reimbursement of antidumping duties

occurred and the subsequent assessment

of double antidumping duties.

This notice also serves as the only

reminder to parties subject to

administrative protective order (APO) of

their responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with section 353.34(d) of the

Department’s regulations. Timely

notification of return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and the terms of an APO is a

sanctionable violation.

This administrative review and notice

are in accordance with section 751(a)(1)

of the Act (19 U.S.C. 1675(a)(1)) and 19

CFR 353.22.

Dated: February 7, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–3913 Filed 2–14–97; 8:45 am]

BILLING CODE 3510–DS–P

National Institute of Standards and

Technology

[Docket No. 950420110–6167–02]

RIN 0693–XX06

Approval of Federal Information

Processing Standards Publication

(FIPS) 196, Entity Authentication Using

Public Key Cryptography

AGENCY: National Institute of Standards

and Technology (NIST), Commerce.

ACTION: The purpose of this notice is to

announce that the Secretary of

Commerce has approved a new

standard, which will be published as

FIPS Publication 196, Entity

Authentication Using Public Key

Cryptography.

SUMMARY: On June 6, 1995, notice was

published in the Federal Register (60

FR 29830–29832) that a Federal

Information Processing Standard for

Public Key Cryptographic Entity

Authentication mechanisms was being

proposed for Federal use.

The written comments submitted by

interested parties and other material

available to the Department relevant to

this standard were reviewed by NIST.

On the basis of this review, NIST

recommended that the Secretary

approve the standard as a Federal

Information Processing Standards

Publication, and prepared a detailed

justification document for the

Secretary’s review in support of that

recommendation.

The detailed justification document

which was presented to the Secretary,

and which includes an analysis of the

written comments received, is part of

the public record and is available for

inspection and copying in the

Department’s Central Reference and

Records Inspection Facility, Room 6020,

Herbert C. Hoover Building, 14th Street

between Pennsylvania and Constitution

Avenues, NW, Washington, DC 20230.

This FIPS contains two sections: (1)

an announcement section which

provides information concerning the

applicability, implementation, and

maintenance of the standard; and (2) a

specifications section, which deals with

the technical requirements of the

standard. Only the announcement

section of the standard is provided in

this notice.

EFFECTIVE DATE: This standard becomes

effective April 6, 1997.

ADDRESSES: Interested parties may

purchase copies of this standard,

including the technical specifications

section, from the National Technical

Information Service (NTIS). Specific

ordering information from NTIS for this

standard is set out in the Where to

Obtain Copies Section of the

announcement section of the standard.

FOR FURTHER INFORMATION CONTACT: Mr.

James Foti, telephone (301) 975–5237,

National Institute of Standards and

Technology, Gaithersburg, MD 20899.

Dated: January 30, 1997.

Elaine Bunten-Mines,

Director, Program Office.

Federal Information Processing Standards

Publication 196

February 18, 1997.

Announcing—Entity Authentication Using

Public Key Cryptography

Federal Information Processing Standards

(FIPS PUBS) are issued by the National

Institute of Standards and Technology (NIST)

after approval by the Secretary of Commerce

pursuant to Section 111(d) of the Federal

Property and Administrative Services Act of

1949 as amended by the Computer Security

Act of 1987, Public Law 100–235.

1. Name of Standard. Entity

Authentication Using Public Key

Cryptography (FIPS PUB 196).

2. Category of Standard. Computer

Security, Subcategory Access Control.

3. Explanation. This standard specifies two

challenge-response protocols by which

entities in a computer system may

authenticate their identities to one another.

These protocols may be used during session

initiation, and at any other time that entity

authentication is necessary. Depending on

which protocol is implemented, either one or

both entities involved may be authenticated.

The defined protocols are derived from an

international standard for entity

authentication based on public key

cryptography, which uses digital signatures

and random number challenges.

Authentication based on public key

cryptography has an advantage over many

other authentication schemes because no

secret information has to be shared by the

entities involved in the exchange. A user

(claimant) attempting to authenticate oneself

must use a private key to digitally sign a

random number challenge issued by the

verifying entity. This random number is a

time variant parameter which is unique to

the authentication exchange. If the verifier

can successfully verify the signed response

using the claimant’s public key, then the

claimant has been successfully authenticated.

4. Approving Authority. Secretary of

Commerce.

5. Maintenance Agency. Department of

Commerce, National Institute of Standards

and Technology, Computer Systems

Laboratory.

6. Cross Index.

a. FIPS PUB 140–1, Security Requirements

for Cryptographic Modules.

b. FIPS PUB 171, Key Management Using

ANSI X9.17.

c. FIPS PUB 180–1, Secure Hash Standard.

d. FIPS PUB 186, Digital Signature

Standard.

e. FIPS PUB 190, Guideline for the Use of

Advanced Authentication Technology

Alternatives.