[Federal Register Volume 62, Number 72 (Tuesday, April 15, 1997)]
[Notices]
[Pages 18468-18475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9426]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-405-802]


Certain Cut-to-Length Carbon Steel from Finland; Final Results of 
Antidumping Duty Administrative Review

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

ACTION: Notice of final results of antidumping duty administrative 
review.

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SUMMARY: On October 4, 1996, the Department of Commerce (the 
Department) published the preliminary results of its 1994-95 
administrative review of the antidumping duty order on certain cut-to-
length carbon steel from Finland. The review covers one manufacturer/
exporter, Rautaruukki Oy (``Rautaruukki''), for the period August 1, 
1994 through July 31, 1995. We gave interested parties an opportunity 
to comment on our preliminary results. Based on our analysis of the 
comments received, we have made the changes described in this notice.

EFFECTIVE DATE: April 15, 1997.

FOR FURTHER INFORMATION CONTACT:
Jacqueline Wimbush or Linda Ludwig, Office of AD/CVD Enforcement, Group 
III, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone (202) 482-1374 or 482-3833, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On October 4, 1996, the Department published in the Federal 
Register (61 FR 51901) the preliminary results of the

[[Page 18469]]

antidumping duty order on certain cut-to-length carbon steel plate from 
Finland (58 FR 44165). The Department has now completed this 
administrative review in accordance with section 751 of the Tariff Act.

Applicable Statute and Regulations

    Unless otherwise stated, all citations to the Tariff Act of 1930, 
as amended (the Tariff Act) are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the 
Tariff 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).

Scope of the Review

    The products covered by this administrative review constitute one 
``class or kind'' of merchandise: certain cut-to-length carbon steel 
plate. These products include hot-rolled carbon steel universal mill 
plates (i.e., flat-rolled products rolled on four faces or in a closed 
box pass, of a width exceeding 150 millimeters but not exceeding 1,250 
millimeters and of a thickness of not less than 4 millimeters, 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 
hot-rolled carbon steel flat-rolled products in straight lengths, 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 millimeters or more in thickness and 
of a width which exceeds 150 millimeters and measures at least twice 
the thickness, as currently classifiable in the Harmonized Tariff 
Schedule (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, and 
7212.50.0000. Included are flat-rolled products of non-rectangular 
cross-section 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 beveled or rounded at 
the edges. Excluded is grade X-70 plate. These HTS item numbers are 
provided for convenience and Customs purposes. The written description 
remains dispositive.
    The period of review (``POR'') is August 1, 1994, through July 31, 
1995. This review covers entries of certain cut-to-length carbon steel 
plate by Rautaruukki.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received briefs and rebuttal comments from 
Bethlehem Steel Corporation, U.S. Steel Group a unit of USX 
Corporation, Inland Steel Industries, Inc., LTV Steel Company, Inc., 
National Steel Corporation, AK Steel Corporation, Gulf States Steel 
Inc. of Alabama, Sharon Steel Corporation, and WCI Steel Inc., 
collectively petitioners, and from Rautaruukki, respondent, an exporter 
of the subject merchandise. At the request of respondent, we held a 
hearing on December 2, 1996.

Comment 1

    The respondent argues that the Department erred by failing to 
consider all subject merchandise with shipbuilding specification ``A'' 
as identical merchandise. Respondent states that the Department 
assigned new control numbers (``CONNUMs'') to shipbuilding steel for 
each specification and/or grade (``PLSPECH'') based on the national 
classification society. Consequently, respondent argues that the 
Department considered only the shipbuilding plate certified as ``ABA'' 
for sale in the Finnish home market and the U.S. market as identical 
merchandise, and erroneously treated shipbuilding plate which was 
certified by a different national classification society as non-
identical merchandise.
    Respondent claims that its customers sometimes demand that 
identical merchandise be certified in accordance with the 
specifications of the national classification society of the country in 
which the product will be used. As a result of this, respondent states 
that it reported multiple PLSPECH codes for the same CONNUM. Respondent 
argues that the administrative record shows that merchandise 
manufactured to the ``A'' specification is identical regardless of 
national classification society certification. Respondent alleges that 
it gave the Department a table of identical and most similar 
merchandise which demonstrated that the physical characteristics, 
including chemistry, delivery condition, elongation, yield strength and 
tensile strength are identical for all shipbuilding plate with the 
``A'' specification (see Exhibit SUPP-17, dated December 6, 1996, as 
part of Rautaruukki's response to the Department's supplemental 
questionnaire). Respondent notes that it provided the Department with 
mill certificates for various shipbuilding (``A'') specifications, 
which indicated that the chemical and physical properties are the same 
for shipbuilding steel with the ``A'' specification, and the steel from 
the same cast or heat was used to meet orders of shipbuilding plate 
sold to two different classification society certifications.
    Respondent claims that the Department has acknowledged that all 
``A'' specification shipbuilding plate are identical products. 
Respondent cites the Department's verification report which states: 
``We examined mill certificates for products which have identical 
physical characteristics but were sold to different countries with 
different specifications: It is clear that the products were identical 
based on physical characteristics.''
    Respondent also contends that the Department has improperly changed 
its model-match program from the previous administrative review. 
Respondent notes that in the first review, the Department assigned 
identical designated values for PLSPECHs which represented subject 
merchandise manufactured to the ``A'' specification of shipbuilding 
steels. Respondent states that in the first administrative review, the 
Department recognized that these products are identical products with 
the same chemical and physical characteristics.
    Respondent argues that an administrative agency must either follow 
existing decisions and precedents or else explain its deviation, citing 
Citrosuco Paulista, S.A. v. United States, 12 CIT 1196, 1209, 704 F. 
Supp. 1075, 1088 (1988). Respondent argues that the Department should 
have either conformed to, or explained the reasons for its departure 
from, its prior determination. Respondent claims that no new facts were 
presented that supported a different conclusion than that reached in 
the prior administrative review, citing Shikoku Chemicals Corp. v. 
United States, 16 CIT 382, 795 F. Supp. 417, 421 (1992).
    Respondent argues that the Department never asked for information 
explaining in greater detail its product code system nor did it ever 
notify Rautaruukki regarding any change in the review. Thus, 
Rautaruukki claims that it was never given an opportunity to supplement 
or clarify the record or change its existing reporting methodology, 
citing SKF USA Inc. v. United States, 888 F. Supp. 152 (CIT

[[Page 18470]]

1995). Respondent also cites Bowe-Passat v. United States, 17 CIT 335, 
343 (1993), in which its states that the Department sent out a general 
questionnaire and a brief deficiency letter, without disclosing other 
deficiencies unspecified in the letter until after ``it was too late, 
i.e., after preliminary determination.''
    Petitioners contend that if Rautaruukki's PLSPEC matching hierarchy 
was accepted as accurate by the Department, the Department would be 
faced with insurmountable obstacles that would prevent it from 
correcting Rautaruukki's CONNUM and PLSPEC data. Petitioners argue that 
acceptance of Rautaruukki's ``explanation'' would necessitate the 
collapsing and ``splitting'' of CONNUMs, which the Department should 
not and could not do. Petitioners claim that Rautaruukki's PLSPEC 
matching hierarchy indicates some specifications with a given CONNUM to 
be identical to the PLSPEC sold in the U.S., some to be ``similar'' to 
that PLSPEC, and that separate CONNUMs should have been created for 
other PLSPECs.
    Petitioners contend that Rautaruukki's database would have to be 
reconfigured before it could be used if Rautaruukki's submitted PLSPEC 
matching hierarchy were deemed accurate and dispositive. Petitioners 
note that it is not the Department's responsibility to make such 
changes, citing Neuweg Ferrigung GmbH v. United States, 797 F. Supp. 
1020, 1023-24 (CIT. 1992). Petitioners argue that the Department's 
acceptance of Rautaruukki's matching hierarchy would necessarily render 
its sales and cost databases unusable for purposes of the sales-below-
cost test, because Rautaruukki's reported matching hierarchy only 
identifies a limited number of PLSPECs. Thus, the Department would be 
preluded from reconfiguring the vast majority of Rautaruukki's 
database.
    Petitioners argue that it would be impossible for the Department to 
correct Rautaruukki's PLSPEC and CONNUM information. Petitioners claim 
that the ramifications of the Department's inability to correct 
Rautaruukki's submitted data would affect the Department's analysis at 
a most fundamental level. Petitioners argue that (1) the creation of 
new CONNUMs would require correcting the corresponding model-specific 
cost information, by creating new costs for newly collapsed and split 
CONNUMs; and (2) that the Department's inability to correct 
Rautaruukki's CONNUMs prevents it from performing its sales-below-cost 
test. Petitioners argue that the Department's acceptance of 
Rautaruukki's matching hierarchy would necessarily render its sales and 
cost databases unusable for purposes of the arm's-length test. 
Petitioners claim that the fact that the arm's-length test cannot be 
performed is of great significance given the number of sales in the 
home market that were made to affiliated parties.
    Petitioners argue that Rautaruukki's attempts in its case brief to 
focus the Department's attention on its treatment of four PLSPEC 
designations, and two CONNUMs under which these PLSPECs are reported in 
the home market database overlook the deficiencies throughout 
Rautaruukki's database. Petitioner argue that such a decision would set 
a terrible precedent, and that the respondent would only need to ensure 
that it report correctly certain home market sales that it predicted 
would match to U.S. sales, and not bother ensuring that the rest of its 
submitted information was correct. Petitioners state that the 
Department gave Rautaruukki notice of the problems inherent in its data 
and an opportunity to correct or clarify this information.
    Petitioners argue that the statute does not, and cannot 
legitimately be read to, require notification of data deficiencies or 
failures where the department could not know the extent or particulars 
of the problem until verification. Petitioners state that if the 
Department were not allowed to reject unreliable, inaccurate, or 
incomplete information provided by the respondents and discovered at 
verification, the very basis of the Department's statutory authority 
would be negated, citing Sweaters Wholly or in Chief Weight of Man-Made 
Fiber from Taiwan, 55 FR 34,587 (Aug. 23, 1990) (Final Determination of 
Sales at Less Than Fair Value); and Silicon Metal from Brazil, 59 FR 
42,806, 42,812 (Aug. 19, 1994) (Final Results of Antidumping Duty 
Review). To do otherwise, in petitioner's view, would require either 
the acceptance of unverified information or additional verification by 
the Department. Petitioners claim that the major deficiencies in 
Rautaruukki's data base were discovered and raised by the Department at 
the earliest opportunity at verification, and the department had no 
opportunity or reason to inquire into these issues prior to 
verification. Petitioners argue that Rautaruukki should have been aware 
of the deficiencies in its data base prior to verification and has had 
every opportunity to clarify or correct its submitted information. 
Petitioners state that in the original questionnaire, the Department 
provided clear instructions for providing specification/grade 
information, emphasized the importance of the specification/grade 
classification, and gave Rautaruukki every opportunity to request 
guidance from the Department regarding the assignment of specification 
or grade information.
    Petitioners argue that Rautaruukki never requested guidance from 
the Department, and that the Department issued a lengthy supplemental 
questionnaire in this case, which requested clarification of 
Rautaruukki's PLSPEC and CONNUM assignments. Petitioners argue that 
Rautaruukki's claims in this regard are without merit and should be 
rejected by the Department.
Department's Position
    We agree in part with petitioners. Under the Department's 
methodology for assigning CONNUMs, each product, based on the 
Department's model match criteria, should be assigned its own unique 
CONNUM. Based on these criteria, there should not be more than one 
PLSPEC in any CONNUM because different specifications have different 
physical, mechanical or chemical requirements. Respondent has not 
assigned its CONNUMs consistent with the Department's model match 
criteria. In certain instances, respondent reported within the same 
CONNUM shipbuilding ``A'' specifications, as well as non-shipbuilding 
specifications. In the Department's preliminary results, we created new 
CONNUMs for each of the shipbuilding ``A'' specifications identical or 
most similar to the U.S. sales. this is a change from the prior review 
in which this issue did not come to the Department's attention.
    We relied on respondent's model match hierarchy, which indicates 
that all shipbuilding ``A'' PLSPECs are identical, to weight the 
physical characteristics for matching purposes. However, the statement 
in the Department's verification report, that ``based on the mill 
certificates it is clear that the products were identical based on 
physical characteristics,'' referred only to the fact that products are 
physically identical with respect to certain characteristics analyzed 
by the Department, and not that the specifications that they are 
meeting are identical. The PLSPEC variable is intended to identify the 
differences in the specification to which the product is sold. Prices 
can vary based on the specifications to which the product is sold, even 
though the product is physically identical. It is inconsistent with the 
Department's model matching criteria in this case to consider products 
sold to different specifications as identical for margin calculation

[[Page 18471]]

purposes. We assigned one weight to ``ABA'', the only PLSPEC sold in 
the United States. Since all other ``A'' grade shipbuilding 
specifications possess different requirement from ``ABA'' but 
essentially are the same product, we treated them as the next most 
similar product, as we had no basis to distinguish among these PLSPECs 
from respondent's model match hierarchy. All U.S. sales were matched to 
shipbuilding ``A'' specification material.
    While the Department did not specifically request respondent to 
revise its CONNUMs, we did ask Rautaruukki to explain in detail how 
each reported product characteristic was determined and assigned to 
sales of subject merchandise. Respondent never explained why it 
combined PLSPECs in CONNUMs as it did. Nor did Rautaruukki ask the 
Department to consider modifying its methodology to allow Rautaruukki 
to report CONNUMs as it did. We agree with petitioners that respondent 
has likely incorrectly assigned CONNUMs throughout the data base. The 
Department was able to and has revised the data base where it was 
necessary to do so for purpose of the margin calculation.
    This effort by the Department does not impair our ability to 
perform the cost test in this review. As explained in Comment 3, we are 
using facts available and assigning a single cost for all CONNUMs. (See 
Comment 3, below.) Consequently, we are able to perform the cost test 
without obtaining additional cost data from Rautaruukki, and have done 
so for these final results.
    With respect to the arm's length test, we are already using facts 
available as NV for all U.S. sales matching to these sales, making this 
issue moot.

Comment 2

    Respondent argues that the Department has erred by comparing normal 
cut-to-length carbon steel plate sold to the U.S. market with the wide 
flats and beveled plate sold in the home market because these products 
are not identical or similar. Respondent asserts that the United States 
Customs Service has issued a number of definitional rulings concerning 
the classification of ``wide flats'' under the Harmonized Tariff 
Schedule of the United States (1996) (``HTSUS''). Respondent claims 
that these rulings indicate that ``wide flats'' are considered to be 
parts of steel structures and, therefore, classifiable under heading 
7308 of the HTSUS. See, e.g., Headquarter Ruling 088116 (Feb. 27, 
1991); Headquarters Ruling 084532 (July 14, 1989).
    Respondent claims that beveled plate and wide flats are structural 
steel products which require separate handling on a different product 
line, and that the raw material for both is basic cut-to-length plate. 
Respondent claims that the Department was provided extensive 
information about the different and additional cost associated with 
both products, as well as the additional processes which are necessary 
to produce these products. Respondent claims that the Department has 
verified that wide flats and beveled products require additional 
processing, and that the Department erred in comparing sales of these 
products with those of normal plate. Respondent states that it assigned 
distinct CONNUMs to beveled plate and to wide flats although they may 
have the same physical characteristics as basic cut-to-length plate, 
because they are manufactured by different processes and have different 
end uses.
    Petitioners claim that Rautaruukki's arguments regarding the 
Department's treatment of beveled and wide flat products are without 
merit. Petitioners argue that Rautaruukki raised the same arguments in 
the first administrative review regarding beveled plate products and 
the Department rejected them. Petitioners state that the Department 
correctly determined in the first administrative review that 
Rautaruukki failed to establish the relevance of the beveling as a 
product matching criteria, and that ``beveled plate does not possess 
physical characteristics which make it unique from non-beveled plate 
with regards to applications and uses,'' citing Certain Cut-to-Length 
Carbon Steel Plate from Finland, 61 FR 2792, 2795 (Jan. 29, 1996) 
(Final Results of Antidumping Duty Administrative Review). Petitioners 
also note that in response to a letter from the Department to 
interested parties on model match prior to the first administrative 
review, Rautaruukki commented on several issues, but did not mention 
the treatment of beveled plate or wide flat products in any regard.
    Petitioners argue that nothing has changed with respect to this 
issue in the second review, and the Rautaruukki has not established on 
the record the relevance of beveling or wide flats as product matching 
criteria. Petitioners argue that Rautaruukki has simply ignored the 
Department's hierarchy and attempted to create its own and, therefore, 
the Department has correctly determined that neither beveled plate nor 
wide flat products possess any physical characteristics that set them 
apart from non-beveled or non-wide flats plate products.
Department's Position
    We agree with petitioners. The Department issued clear instructions 
on how to construct CONNUMs. Whether or not subject merchandise is 
beveled or wide flat is not a model match criterion. Rautaruukki never 
explained that it had modified the Department's model match criteria or 
why it had done so. Rautaruukki did not ask the Department to consider 
modifying the model match criteria. As petitioners correctly note, 
respondent cannot modify the Department's model match criteria on its 
own initiative. The Department agrees with the petitioners that 
respondent did not submit any information on the record to establish 
the revelance of beveling and wide flats as a product matching 
criterion, nor did respondent provide information to demonstrate that 
the beveled and wide flats plate possess physical characteristics to 
make them unique from the non-beveled or non-wide flats with regard to 
applications and uses. Therefore, the Department continues to consider 
these products identical to other subject merchandise. With respect to 
the cited Customs Rulings, Rautaruukki did not provide any information 
on the record to suggest that wide flats are not subject merchandise. 
For the preliminary results, the Department modified Rautaruukki's 
submitted CONNUMs for the products identical or most similar to the 
U.S. sales to combine beveled, wide flat and other plate into a single 
CONNUM. We have not changed this for these final results.
    We used facts available as NV for U.S. sales matching to home 
market CONNUMs that included beveled or wide flat sales as we were 
unable to verify cost for beveled or wide flat products. We have 
identified additional CONNUMs as containing beveled or wide flat 
material for these final results. See Comment 3 below.

Comment 3

    Petitioners argue that the Department should reject Rautaruukki's 
submitted cost information and resort to total facts available. While 
petitioners support the Department's determination in the preliminary 
results that the cost data for beveled and wide flat products could not 
be verified, they claim that the Department erred by failing to 
recognize that other significant cost information reported by 
Rautaruukki could not be verified.
    In petitioners' view, the product-specific cost information 
submitted by Rautaruukki (the ``cost extras'') could not be verified. 
Petitioners state that

[[Page 18472]]

Rautaruukki's reported COP/CV values are derived from a two-step 
calculation: A single weighted-average base cost for all plate 
products; and an adjustment to that weighted-average cost to account 
for dimensional cost extras and quality cost extras. Petitioners argue 
that these two cost extras could not be verified. Petitioners claim 
that these cost extras are a significant portion of Rautaruukki's total 
cost and the only product-specific element of the submitted product 
costs.
    According to petitioners, Rautaruukki failed to provide accurate or 
relevant source documentation for the cost extras at verification, and 
the documentation provided by Rautaruukki at verification was 
insufficient to demonstrate that its reported costs were accurate, 
reliable, or related to the period of review. Petitioners state that 
the Department's verification agenda states that complete supporting 
documentation should be available for selected CONNUMs. It is argued by 
petitioners that Rautaruukki did not provide the requisite information 
as it pertains to the product-specific cost extras identified above. 
Petitioners cite the Department's cost verification report, at 4, which 
states that ``Rautaruukki representatives indicated to the Department 
at verification that they do not maintain a log or any documentation 
which identifies product-specific cost changes from one period to 
another.'' Petitioners claim that Rautaruukki did not maintain crucial 
supporting documentation that was required to verify the accuracy of 
its reported cost extras.
    Petitioners question the relevance or accuracy of Rautaruukki's on-
line computer system as a source document to verify cost extras. 
Petitioners note that Rautaruukki employs a continuously updated 
computer cost system (i.e., the product-specific costs the Department 
reviewed at verification were the costs relevant to the time of 
verification, and were not the costs in effect during the period of 
review, nor were they the costs in effect at the time the questionnaire 
response was prepared). Petitioners hold that reliance on such a 
computer system in the course of a verification does not meet a 
``reasonable standard'' incumbent upon the Department. (See Micron 
Technology, Inc. v. United States, 893 F. Supp. 21, 39 (CIT 1995) and 
Hercules, Inc. v. United States, 673 F. Supp. 454, 469 (CIT 1987).) At 
the hearing, petitioners clarified that their objection to an on-line, 
live system is not the lack of a print-out, but the absence of ties to 
financial statements.
    Petitioners state that Rautaruukki also showed the Department a 
cost extras book published in July 1995 to verify cost extras. 
Petitioners note that the book was published at the end of the POR and 
there is no evidence on the record indicating that the values of the 
extras in the book were related to the POR. Petitioners also question 
whether the cost extras book is a reference for costs of production for 
particular extras or whether the book is used to determine the charges 
to be paid by customers for particular extras.
    Petitioners allege that when the Department attempted to verify 
these cost extras, it was unable to tie the cost extras values reported 
by respondent to source documentation and that when compared to the 
documentation that did exist, numerous errors were uncovered. 
Petitioners note that of 48 cost extras examined at verification, 38 
percent of the cost extras had been misreported.
    Petitioners argue that in situations where respondent has failed to 
retain and failed to provide the necessary supporting documentation for 
such key components of the cost data set, the respondent is said to 
have failed verification, and the Department should therefore apply 
total facts available, citing Grain Oriented Electrical Sheet Steel 
from Italy (59 FR 33952, (July 1, 1994)); Certain Cut-to-Length Carbon 
Steel Flat Products from Sweden (61 FR 51,898, 51,899, (Oct. 4, 1996)) 
(Flat Products from Sweden). Petitioners note that in Flat Products 
from Sweden, the Department applied total facts available because the 
respondent was unable to reconcile its submitted cost data to its 
normal accounting books and records and was unable to demonstrate that 
the submitted COP/CV data was based on the company's actual production 
experience. Like respondent in Flat Products from Sweden, in 
petitioners view, Rautaruukki did not provide documentation at 
verification that could demonstrate that the submitted COP/CV data was 
based on the company's actual production experience.
    Rautaruukki contends that the Department conducted a 
``comprehensive and proper cost verification'' and that the Department 
confirmed that the cost information submitted by Rautaruukki was based 
on Rautaruukki's normal accounting and financial records. Moreover, 
Rautaruukki claims that the Department verified Rautaruukki's reported 
base cost figures for allocation of indirect costs to direct cost 
centers, maintenance expenses, by-product and scrap allocations, cost 
of manufacturing, selling, general and administrative expenses, and 
reported per-unit costs. Respondent asserts that no discrepancies were 
noted in the course of verifying these items.
    Rautaruukki distinguishes this case from Flat Products from Sweden 
by arguing that in that case the Department found that the respondent 
had based its AD response on a special system which was not used as 
part of the respondent's normal accounting system. Rautaruukki claims 
that the Department found that its submitted cost information was based 
both on its normal accounting books and records and on its actual 
production experience.
    Rautaruukki notes that the values for quality extras were taken 
from data in its on-line computer system, which is constantly updated 
to reflect changes in costs so that Rautaruukki can make the 
corresponding changes in its prices. Respondent states that it ``does 
not maintain a log of the changes in extras costs from one period to 
another.'' Rautaruukki admits that the Department found at verification 
that some quality extras values were different from those reported by 
Rautaruukki, but attributed these differences to the system being 
updated since Rautaruukki had prepared its questionnaire response. 
Respondent claims that these differences were slight, about one or two 
FIM per cost extra. In response to a question at the hearing, 
Rautaruukki explained that the extras cost book is in fact a cost book, 
not a price extras book. In some cases, respondent noted that the 
discrepancies in cost extras were positive and in other cases 
negatives.
Department's Position
    We agree, in part, with both parties. We agree with respondent that 
the Department was able to tie Rautaruukki's base costs to appropriate 
financial and accounting documentation. This represents by far the 
largest portion of Rautaruukki's total cost.
    We agree with petitioners that the Department was unable to tie 
Rautaruukki's extras costs to supporting documentation at verification. 
With respect to beveled and wide flat products, as we stated in our 
preliminary results, the use of facts available is appropriate because 
the Department was unable to verify Rautaruukki's total COP data. This 
was because Rautaruukki made no attempt to provide supporting 
documentation with respect to its cost extras, simply indicating that 
these extras could not be verified.
    Rautaruukki did provide some documentation to support its cost 
extras submission with respect to other products. This documentation 
consisted of its on-line computer system and a

[[Page 18473]]

cost extras book. However, neither of these sources was for the POR--
the on-line system was current as of the date of verification and the 
cost extras book was prepared at the end of the POR, with no indication 
as to the period for which the costs in the book were in effect. As 
stated in the Department's cost verification report concerning a 
particular CONNUM, ``in reviewing the extras costs associated with this 
product, we could not verify the accuracy of the reported cost for (a 
particular plate extra) * * *. Respondents were unable to provide 
documentation indicating that the figure was correct when the material 
was manufactured or when the response was prepared.''
    At verification, we did compare 48 different reported cost extras 
to the costs listed in the cost extra book. Of these, there were 
discrepancies for 16, or 38 percent. The differences were extremely 
small, usually only one or two FIM. For all of the home market products 
that were matched to U.S. sales, the reported cost extras represented a 
small percentage of total cost. No documentation was provided to link 
either the cost extra book or the on-line computer system into 
Rautaruukki's audited financial accounting system.
    Because of Rautaruukki's failure to report properly extra cost data 
based on the POR, failure to retain the data that it did use to prepare 
its questionnaire response, and the failure of Rautaruukki to provide 
documentation linking the reported extras costs with accounting and 
financial documentation, the Department has determined to use facts 
available for Rautaruukki's reported extras costs.
    However, the Department disagrees with petitioners' suggestion that 
it apply total facts available in this review. The cases cited by 
petitioners, Grain Oriented Electrical Sheet Steel from Italy and Flat 
Products from Sweden, differ from this case. In both of those cases, 
the Department was unable to verify numerous and fundamental aspects of 
the respondents' responses. In this case, however, the significant 
problems encountered at verification were limited to cost extras. Base 
costs--the primary component of cost--were fully verified. The observed 
discrepancies with respect to cost extras for products other than wide 
flats and beveled plate were extremely small, and for the home market 
products used to match to U.S. sales, reported cost extras represented 
a small portion of total cost. As a result, rather than resort to total 
adverse facts available for these products, as advocated by 
petitioners, for products other than wide flats and beveled plate we 
are using facts available only for the cost extras in the calculation 
of COP and CV. As facts available, we are using the highest reported 
cost extras for products that are not beveled or wide flat. Due to the 
significant difference in cost between painted and non-painted 
products, we have also separately identified the highest reported extra 
costs for painted and non-painted plate. In calculating difference of 
merchandise (difmer) adjustments, we have assigned a difmer of zero to 
shipbuilding specification ``A'' material that same cost as the U.S. 
product.
    For wide flats and beveled products, Rautaruukki made no attempt to 
provide information to verify its reported extras data. Indeed 
Rautaruukki admitted that this information could not be verified. As 
stated in the cost verification report: We also noted that the costs 
reported for wide flats and beveled material are incorrect. The report 
goes on to state that this failure to correctly report the extras cost 
of these products rendered moot our attempt to verify the costs. 
(Department's Cost Verification report at 4.) We are continuing to use 
facts available as NV for U.S. sales matching to CONNUMs including wide 
flats and beveled plate as we did in the preliminary results.
    We also note that respondent improperly reported COP and CV data 
for two separate periods, 1994 and seven months of 1995, rather than 
report a single weighted average COP/CV for the entire POR. Respondent 
also improperly included data for all of calendar year 1994 in its COP/
CV data, rather than limiting the data used to the months of the POR. 
For the final results of this review, we are weight averaging 
respondent's submitted data, with the modifications noted above.

Comment 4

    Petitioners argue that the Department is compelled to reject 
Rautaruukki's submitted sales information and resort to total facts 
available. Petitioners claim that respondent has offered three 
inconsistent and mutually exclusive explanations of how it assigned 
PLSPEC and CONNUM codes to its various products:
    <bullet> That whenever multiple PLSPECs are assigned to a 
particular CONNUM, those PLSPECs are identical to one another because 
they merely reflect various countries' designations of the same 
specification/grade;
    <bullet> That respondent's PLSPEC codes each reflect different 
specification and grades; and
    <bullet> That the various PLSPECs within a given CONNUM in some 
cases are identical to one another, in other cases are only similar 
(although not identical), and in still other cases are dissimilar.
    Petitioners argue that the submitted sales information should be 
rejected because: (1) The PLSPEC and CONNUM codes are critical to the 
Department's dumping analysis; (2) the Department has no basis for 
selecting among Rautaruukki's various inconsistent explanations of 
these codes; and (3) the Department is unable to correct Rautaruukki's 
data. Petitioners argue that the assignment of PLSPEC and CONNUM codes 
directly affects almost every critical element of the Department's 
analysis of the existence and magnitude of dumping, including 
attribution and allocation of costs, model match, and application of 
the arm's length test.
    Petitioners summarize the record evidence in support of each of the 
three explanations which it believes respondent has offered. 
Petitioners offer various cites to the record in support of the first 
proposition that certain different PLSPEC designations included within 
a single CONNUM are in fact identical and that respondent merely 
assigned different PLSPECs to reflect the nomenclature of different 
international standards for identical products. Petitioners claim that 
the Department verified that these PLSPECs are identical. In support of 
the second proposition, petitioners cite the cost verification report, 
which they claim indicated that respondent separately tracked and 
recorded costs for certain PLSPECs within the same CONNUM. Petitioners 
also reference the sales verification report which states that 
``Rautaruukki has correctly assigned different PLSPEC codes to 
different specifications and grades. The specifications and grades are, 
indeed, different* * *.'' Petitioners also cite respondent's submitted 
model match hierarchy in support of their third proposition, that some 
PLSPECs under a CONNUM are identical, while others only similar and 
others are not even similar.
    Petitioners argue the quantum of evidence of the record and the 
number of statements made by Rautaruukki consistent with each of the 
alternatives is roughly equivalent, and Rautaruukki has supported each 
of its claims with documentation, and in two of the three instances, 
the Department purportedly confirmed this information at verification.
    Petitioners argue that if the Department were to accept the first 
claim, that all PLSPECs under a single CONNUM are identical, the 
Department would have to collapse PLSPECs within

[[Page 18474]]

a CONNUM, and also collapse PLSPECs that are identical to each other 
but are assigned different CONNUMs throughout the entire database. 
Petitioners claim that this would entail extraordinarily complex 
computer programming and the Department could not be certain of making 
all the necessary corrections. Petitioners also note that if this claim 
were accepted, the Department would have to correct all corresponding 
cost information and revisit the issue of downstream sales. Petitioners 
also argue that the Department would have to reject Rautaruukki's 
submitted model match hierarchy and, as a result, would be precluded 
from performing the model match.
    Petitioners argue that if the Department were to accept the second 
claim that all reported PLSPECs are different, the Department would 
have to split all the CONNUMs that contain multiple PLSPECs and 
determine the correct cost for each new CONNUM. However, in 
petitioners' view, the Department has no basis upon which to apportion 
the COP/CV of the original CONNUM to the newly-created CONNUMs. 
Petitioners claim that under this scenario the Department again would 
have to reject Rautaruukki's submitted model match hierarchy and, as a 
result, would be precluded from performing the model match.
    Petitioners claim that if the Department were to accept 
Rautaruukki's third claim that some PLSPECS reported under a CONNUM are 
identical, while others are only similar and others are not similar at 
all, then the Department would have to collapse the PLSPECs listed in 
the model match hierarchy as identical and separate all of the non-
identical PLSPECs listed under the same CONNUM. Petitioners also claim 
that the Department would have to correct the corresponding cost 
information. However, petitioners noted that the model match hierarchy 
does not list all PLSPECs and they argue the Department would be 
precluded from running the arm's length test.
    Respondent alleges that it provided the Department with a 
consistent, accurate and verified explanation of its assignment of 
CONNUMs and PLSPECs in this administrative review. Respondent asserts 
that petitioners' claims are contradicted by the record, including the 
Department's verification of the methodology and accuracy of 
Rautaruukki's assignment of CONNUMs and PLSPECs. Respondent states that 
PLSPECs may be identical, similar or different.
    Citing the Department's analysis memorandum, respondent claims that 
in performing the model match, the Department first identified home 
market sales with the same CONNUM as the U.S. sales and, then matched 
identical PLSPECs within that CONNUM. Respondent asserts that it has 
assigned separate PLSPEC codes to separate specifications or grades. 
Respondent notes that in some cases, these PLSPEC codes identify 
identical products, but the codes are different to reflect the national 
specification or classification standard to which the product was 
certified. Rautaruukki claims that it clearly identified the PLSPEC 
codes which it used, and the Department verified that information.
    Respondent also states that it assigned different CONNUMs to 
products with the same physical characteristics when those products 
fell into different product groups which are manufactured by different 
processes and have different end uses. Respondent contends that the 
Department verified that some of these products, including wide flats 
and beveled plate, require additional processing.
    Respondent notes that the record establishes that:
    <bullet> The same CONNUM may have included two or more PLSPECs. 
There are some PLSPECs within a CONNUM which define identical products 
(e.g., the PLSPECs assigned to the certifications of shipbuilding plate 
``A'' by the various national classification societies), while other 
PLSPECs define similar or different products.
    <bullet> Different CONNUMs reflect different product groups with 
the same physical characteristics, i.e., normal cut-to-length plate, 
wide flats, and beveled plate.
    <bullet> Individual PLSPECs represent separate specification or 
grade codes.
    Respondent claims that petitioners attempt to construct a dilemma 
where none exists, and that Rautaruukki's ``explanations'' are not 
inconsistent and certainly not mutually exclusive.
Department's Position
    We disagree with petitioners that Rautaruukki has offered three 
inconsistent and mutually-exclusive explanations of how it assigned 
PLSPEC and CONNUM codes and that the Department has no basis for 
choosing among these explanations. We believe that the third 
explanation cited by petitioners--that in some instances PLSPECs are 
identical, in other instances they are similar, and in other instances 
they are not similar--is consistent with the information submitted on 
the record. The ``evidence'' which petitioners cite in support of the 
other two explanations is not global in nature. For example, statements 
cited by petitioners in support of the first explanation--that whenever 
multiple PLSPECs are assigned to a particular CONNUM, those PLSPECs are 
identical to one another because they merely reflect various countries' 
designations of the same specification/grades--are referring to 
shipbuilding specifications only. Similarly, none of the information 
referenced by petitioners regarding the second explanation--that PLSPEC 
codes each reflect different specification and grades--indicates that 
this is true of all PLSPECs. Thus, we find that Rautaruukki's 
explanations regarding PLSPECs are consistent.
    This does not mean that we find that Rautaruukki has correctly 
assigned CONNUMs. As indicated in response to Comment 1, we do not 
agree that all shipbuilding ``A'' PLSPECs should be combined in a 
single CONNUM. We are continuing to make the changes to Rautaruukki's 
data base with respect to the reconfiguration of CONNUMs that were made 
in the preliminary results. Petitioners' concerns with respect to cost 
data, the sales-below-cost test and the arm's length test have been 
addressed in Comment 1.

Comment 5

    Petitioners state that Rautaruukki has compelled the Department to 
use adverse total facts available, because Rautaruukki failed to 
provide the Department with a response that is consistent; an 
explanation of how Rautaruukki's response was prepared; and the 
necessary information needed to verify the submitted cost information.
    Petitioners argue that under the terms of the statute, the 
Department is compelled to reject Rautaruukki's responses, and resort 
to total facts available. Petitioners note that 19 U.S.C. 
1677e(a)(1995) provides that if:

    (1) Necessary information is not available on the record, or
    (2) 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 
submission of the information or in the form and manner requested . 
. .,
    (C) significantly impedes a proceeding under this subtitle, or
    (D) provides such information but the information cannot be 
verified . . ., the administering authority and the Commission shall 
. . . use the facts otherwise available in reaching the applicable 
determination under this subtitle.


[[Page 18475]]


    Petitioners contend that the statute provides that any one of the 
above five scenarios requires the Department to reject Rautaruukki's 
responses and resort to facts available. Petitioners allege that 
despite repeated requests by the Department, Rautaruukki did not 
provide adequate information by which the Department could verify its 
reported cost information, and it did not provide the Department with a 
consistent and reliable explanation of how the company assigned PLSPEC 
and CONNUM codes to its various products. Petitioners state that 
section 1677m of the statute provides that the Department may still 
rely on submitted information that fails to meet the above criteria in 
certain circumstances which in petitioners' view have not been 
satisfied by Rautaruukki. Petitioners claim that the Department has 
complied with the statutory notice requirements necessary to reject 
Rautaruukki's deficient submissions.
    Petitioners state that section 1677m (d) of the statute requires 
that, upon receiving a deficient submission, the Department is to, 
``promptly inform * * * respondent of the nature of the deficiency and 
shall, to the extent practicable, provide that person with an 
opportunity to remedy or explain the deficiency in light of the time 
limits established for the completion of * * * reviews.'' Petitioners 
argue that in addition to its original questionnaire, the Department 
issued a lengthy supplemental questionnaire in the case, which 
specifically requested clarification of Rautaruukki's PLSPEC and CONNUM 
assignments, as well as its submitted cost information, including cost 
``extras.''
    Petitioners state that section 1677e(b) of the statute provides 
that if a respondent fails ``to cooperate by not acting to the best of 
its ability to comply with * * * the Department's request for 
information, * * * the Department in reaching its determination may use 
an inference that is adverse to the interests of that party in 
selecting from among the facts otherwise available.'' Petitioners claim 
that Rautaruukki has not acted to the best of its ability to comply 
with the Department's instructions in this review; therefore, the 
Department should use an adverse inference when applying facts 
available. Petitioners assert that the Department should apply the 
highest rate from any prior segment of this proceeding--32.80 percent.
    Respondent claims that it provided the necessary information 
requested by the Department during this administrative review. In 
Rautaruukki's view, its cooperation is confirmed by the record. 
Respondent argues that it provided information which was within its 
corporate control and sought information from other companies as well 
as the Government of Finland. Respondent states that it was fully 
cooperative and responsive during the sales and cost verifications by 
the Department, which extended over a period of ten days. Rautaruukki 
claims it responded fully and promptly to the Department's requests, 
and it assigned sufficient and appropriate personnel to insure the 
orderly and accurate progression of the verification. Respondent argues 
that the Department confirmed that the information submitted by 
Rautaruukki was accurate, complete and verifiable through its testing 
of Rautaruukki's responses against the company's normal accounting and 
financial records, and that the Department reconciled Rautaruukki's 
response to those records.
Department's Position
    As indicated in previous comments, we disagree with petitioners 
that the Department should reject Rautaruukki's responses, and apply 
adverse total facts available. We are making the adjustments to 
Rautaruukki's submitted data described above and using this data to 
calculate Rautaruukki's antidumping duty margin. As the Department 
finds that the use of total facts available is not appropriate, the 
issue of whether or not we should apply adverse facts available is 
moot.

Final Results of Review

    As a result of our review, we determine that the following 
weighted-average margin exists:

------------------------------------------------------------------------
                                                Period of       Margin  
           Manufacturer/exporter                 review       (percent) 
------------------------------------------------------------------------
Rautaruukki Oy.............................  8/1/94-7/31/95        24.95
------------------------------------------------------------------------

    The Department shall determine, and the Customers Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between export price and normal value may vary from the 
percentage stated above. The Department will issue appraisement 
instructions directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
upon publication of this notice of final results of review for all 
shipments of certain cut-to-length carbon steel plate from Finland 
within the scope of the order entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided by section 
751(a) of the Tariff Act: (1) The cash deposit rate for the reviewed 
company will be the rate listed above; (2) for previously reviewed or 
investigated companies not listed above, the rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the original less-than-fair-value (LTFV) 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 (4) 
for cash deposit for all other manufacturers or exporters will continue 
to be 32.80 percent, the ``all others'' rate established in the LTFV 
investigation. See Antidumping Duty Order: Certain Cut-to-Length Carbon 
Steel Plate from Finland, 58 FR 44165 (August 19, 1993). These 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.
    This notice serves as a preliminary 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 a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written 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 published in accordance 
with section 751(a)(1) of the Act and 19 CFR 353.22.

    Dated: April 2, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-9426 Filed 4-14-97; 8:45 am]
BILLING CODE 3510-DS-M