[Federal Register Volume 63, Number 12 (Tuesday, January 20, 1998)]
[Notices]
[Pages 2952-2959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1277]


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

DEPARTMENT OF COMMERCE

[A-405-802]


Certain Cut-to-Length Carbon Steel Plate 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.

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

SUMMARY: On July 15, 1997, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on certain cut-to-length carbon steel plate from 
Finland (62 F.R. 37866). The review covers one manufacturer/exporter, 
Rautaruukki Oy (Rautaruukki), for the period August 1, 1995 through 
July 31, 1996.

EFFECTIVE DATE: January 20, 1998.

FOR FURTHER INFORMATION CONTACT: Heather Osborne or Linda Ludwig, 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, D.C. 20230; telephone (202) 482-
3019 or (202) 482-3833, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 15, 1997, the Department of Commerce (the Department) 
published in the Federal Register (62 FR 37866) the preliminary results 
of its administrative review of the antidumping duty order on certain 
cut-to-length carbon steel plate from Finland (58 FR 44165, August 19, 
1993). The Department has now completed this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Act).
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for completion of an administrative review if it 
determines that it is not practical to complete the review within the 
statutory time limit of 365 days. On November 3, 1997, the Department 
extended the time limits for the final results in this case. See 
Extension of Time Limit for Antidumping Duty Administrative Review, 62 
FR 60683 (November 12, 1997).

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 references to the Department's 
regulation are to 19 CFR part 353 (April 7, 1997).

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 nonrectangular 
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 dispostive.

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., 
petitioners, and from Rautaruukki Oy (Rautaruukki), a producer/exporter 
of the subject merchandise. At the request of petitioners and 
respondent, we held a hearing on October 31, 1997.
    Comment 1: Petitioners argue that Rautaruukki's interest revenues 
should be accounted for and that the Department should adjust 
Rautaruukki's home market sales prices to account for unreported late 
payment charges. Petitioners contend that Rautaruukki's stated policy 
of charging interest to all of its customers for late payments 
conflicts with Rautaruukki's assertion that in practice, its customers 
rarely pay interest. Petitioners note that Rautaruukki enters all 
interest revenues into one general account and argue that charges for 
late payments constitute interests revenue.
    Petitioners assert that the Department confirmed at verification 
that Rautaruukki's financial records account for total interest revenue 
received in 1996, but that no information was provided for 1995. 
Petitioners argue that neither of the transactions cited by respondent 
support Rautaruukki's claim that it did not accrue and receive interest 
revenue. Petitioners state that the Department should employ facts 
available in calculating Rautaruukki's interest revenue due to 
respondent's failure to provide information on interest revenue earned 
in 1995 and its failure to identify the sales for which late payment 
charges were assessed. Petitioners state that, as facts available, the 
Department should calculate an interest revenue adjustment for all 
sales for which, pursuant to their terms of payment, payment was 
recorded as late.

[[Page 2953]]

    Respondent claims that it has reported interest revenue, and no 
further adjustment is required. Respondent states the Department 
verified that interest revenue was properly reported. Respondent 
contends that it has provided information on the total interest revenue 
which it received during calender year 1995 and 1996.
    Department Position: We partially agree with both petitioners and 
respondent. At verification, the Department specifically identified one 
sale solely for verification of interest revenue. As noted in the 
verification report, the Department verified that for this sale, no 
interest revenue was received. See Sales Verification Report at 24. We 
also examined other sales for which the customer had initially been 
billed for late charges (interest revenue) that were ultimately not 
paid by the customer. These sales were also properly reported. 
Rautaruukki reported a negative amount for interest revenue in 1995, 
and a positive amount for 1996. See Respondent's Rebuttal Brief of 
September 15, 1997, at 11. Rautaruukki did not, however, allocate 
interest revenue to 1996 sales in its sales database.
    Section 776(a)(2) of the Act provides that if an interested party 
or any other persons--(A) withholds information that has been requested 
by the administering authority; (B) fails to provide such information 
by the deadlines for the submission of the information or in the form 
and manner requested, subject to subsections (c)(1) and (e) of section 
782; (C) significantly impedes a proceeding under this title; or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority shall, subject 
to section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.
    Because Rautaruukki did not report any interest revenue in its 
sales database, although the interest revenue was received, the 
Department must, pursuant to section 776, use facts otherwise available 
in these final results. We are allocating as facts available the amount 
of interest revenue reported for 1996 to all 1996 sales on a per-ton 
basis.
    Comment 2: Petitioners argue that Rautaruukki's submitted gross 
unit prices should be adjusted, because the Department found a very 
large discrepancy with respect to the reported gross unit price of a 
pre-selected home market sale. Petitioners claim Rautaruukki deducted 
the full amount of the credit from the selected sale rather than 
applying this credit to all sales listed on the invoice. Petitioners 
contend that since the error was uncovered pursuant to a small 
sampling, this suggests that similar errors may well exist elsewhere in 
the dataset. Petitioners argue that based upon variation in prices 
within a given product control number, the understatement discovered by 
the Department at verification could also exist in other product 
control numbers and, in fact, pervade the dataset. Petitioners contend 
that the Department should make an adjustment to the entire dataset to 
account for the errors uncovered with the sample sales. Specifically, 
petitioners suggest that gross unit prices be increased by the 
percentage that the samples sales were under-reported.
    Respondent argues that it has submitted correct home market gross 
unit price data and that no adjustment is warranted. Respondent claims 
that the discrepancy in question was the result of offsetting a credit 
to a customer against a single line item or transaction which was one 
of several transactions on a single invoice. Respondent argues that 
this allocation error works both ways. Although the gross unit price of 
the sale in question was artificially depressed, the gross unit prices 
of the remaining transactions on the invoice were artificially 
increased. Overall, according to Rautaruukki, the errors offset each 
other. Respondent also contends that, as noted during the sales 
verification, this was a special project credit involving an end-user 
(shipyard) in Finland, and that such special or one-time projects are 
rare. Moreover, respondent notes that the Department's verification of 
other home market sales did not disclose a similar problem.
    Department Position: We agree with respondent. At verification, we 
found that, for one sale a credit to a customer was offset against a 
single line item, rather than crediting this amount to all the items to 
which it applied. We agree with respondent that the consequences of 
this allocation error serve to artificially depress the gross unit 
price of the sale in question, while artificially increasing the gross 
unit prices of the remaining transactions on the invoice. We noted that 
the one sale in question was found to be below cost, and is therefore 
already being excluded from our calculation of normal value. We found 
no evidence at verification of any other discrepancies in the reporting 
of gross unit prices. No further adjustment of reported gross unit 
prices is warranted for these final results.
    Comment 3: Petitioners state that Rautaruukki should be denied any 
home market credit expense adjustment because the Department determined 
at verification that the Finnish short-term interest rate that 
Rautaruukki used to calculate the reported home market credit expense 
could not be verified. Petitioners argue that the Department must use 
facts available in establishing the interest rate applicable to the 
calculation of the home market credit expense, and deny Rautaruukki any 
home market credit expense adjustment for the final results.
    Respondent argues that it submitted information on its home market 
interest rate and the Department verified Rautaruukki's total interest 
expenses. Respondent claims that due to time constraints during the 
sales verification, the Department chose to postpone the verification 
of Rautaruukki's home market interest rate until the cost verification. 
Rautaruukki states that during the cost verification the Department 
reviewed Rautaruukki's interest expense worksheet and verified 
Rautaruukki's total interest cost. Additionally, Rautaruukki claims 
that it provided the Department with detailed information regarding 
borrowings during the POR. Hence, in respondent's view, Rautaruukki's 
home market interest rate was reported to the Department and is readily 
verifiable.
    Department Position: We agree with petitioners that we were unable 
to verify Rautaruukki's home market interest rate. The verification 
report states that, [w]e were unable to verify Rautaruukki's U.S. or HM 
interest rates during sales verification. See Sales Verification Report 
at 23. Respondent's claim that the Department chose to postpone the 
verification of Rautaruukki's home market interest rate until the cost 
verification is false. We were prepared to conduct this portion of the 
verification during the sales verification; however, as noted in the 
verification report, respondent simply referred us to prior submissions 
listing short-term borrowings. No original loan agreements or proof of 
payment relative to these loans were provided to the sales verification 
team. While the cost verification team examined information relating to 
respondent's overall interest expense, it was unable to verify the 
interest rate claimed by Rautaruukki in its home market credit 
calculation. As a result of the failure on the part of respondent to 
support a claimed adjustment, and thus our inability to verify that 
claim, we must use partial facts available pursuant to Section 776(a) 
of the Act. Thus, as facts available we are denying an adjustment for 
home market credit expenses for these final results.

[[Page 2954]]

    Comment 4: Petitioners claim that the Department should use facts 
available to calculate Rautaruukki's U.S. credit expense because 
Rautaruukki used Finnish interest rates rather than interest rates 
related to U.S. borrowing in its calculation of credit, and that the 
Finnish rate submitted by Rautaruukki could not be verified. 
Petitioners contend that the Department should use an interest rate of 
nine percent, the short-term interest rate in effect during the POR 
which the U.S. Customs Service charged on underpayment of antidumping 
duties.
    Respondent claims that it had no U.S. borrowings during the POR. 
Rautaruukki states that in view of the Department's verification of 
Rautaruukki's total interest expense and in light of the fact that 
Rautaruukki had no U.S. borrowings, the Department should use the 
Finnish short-term borrowing rate submitted by Rautaruukki for the 
calculation of its U.S. credit expenses.
    Department Position: We partially agree with petitioners. It is 
Department practice to use a U.S. interest rate in the calculation of 
U.S. credit expenses. If a respondent does not have such borrowing, the 
questionnaire instructs the party to use a U.S. published commercial 
bank prime short-term lending rate. Rautaruukki did not do so. 
Moreover, as noted in Comment 3 above, the Department was unable to 
verify respondent's home market interest rate. Therefore, pursuant to 
Section 776 of the Act, the Department must use facts available to 
calculate Rautaruukki's U.S. credit expense.
    In Certain Cut-to-Length Carbon Steel Plate from Sweden; Final 
Results of Antidumping Duty Administrative Review, 61 FR 15772, 15780 
(April 9, 1996) and Certain Corrosion-Resistant Carbon Steel Flat 
Products from Australia; Final Results of Antidumping Duty 
Administrative Reviews, 61 FR 14049, 14054 (March 29, 1996) the 
Department selected the average short-term lending rates calculated by 
the Federal Reserve as surrogate U.S. interest rates. These rates 
represent a reasonable surrogate for respondents' U.S. dollar borrowing 
rates because they are calculated based on a variety of actual dollar 
loans to actual U.S. customers. We have employed this methodology as 
facts available in calculating Rautaruukki's U.S. credit expense using 
the average short-term dollar lending rate effective during the POR. 
See Analysis Memorandum, dated December 15, 1997.
    Comment 5: Petitioners argue that the Department should adjust 
Rautaruukki's movement expenses related to international freight 
charges. Petitioners note that Rautaruukki's movement expenses are 
based on affiliated party transactions with JIT-Trans. In this 
situation, petitioners note that the Department tests whether movement 
expenses based on affiliated party transactions reflect arm's-length 
transactions by comparing those expenses to movement expenses 
pertaining to non-affiliated party transactions. Petitioners reject 
Rautaruukki's claim that JIT-Trans's transfer prices reflect an arm's-
length price merely because JIT-Trans is profitable overall. In 
petitioners' view, this claim is contradicted by a direct comparison of 
JIT-Trans' charge to Rautaruukki with its charge to an unaffiliated 
party. Petitioners claim that for the final results, the Department 
should revise this expense upwards by the percentage that the price to 
the unaffiliated party exceeded that charged to respondent.
    Respondent alleges no additional adjustment is required by the 
Department to its reported movement expenses other than the adjustment 
already made for affiliated party mark-up charges. Respondent claims 
that at verification, Rautaruukki provided the Department with 
documentation to compare movement expenses from arm's length 
transactions between Rautaruukki and JIT-Trans and movement expenses 
from transactions between JIT-Trans and non-affiliated party Outokumpu 
Oy, a Finnish producer of stainless steel products. Rautaruukki cites 
the explanation for the higher prices charged Outokumpu in the sales 
verification report: ``[t]he rate charged the unaffiliated party is 
somewhat higher * * * because in the winter it is more expensive to go 
farther north (due to the ice) and also because it is more expensive to 
make an additional stop.'' Respondent contends that the Department 
concluded that transactions between Rautaruukki and JIT-Trans are at 
arm's length and argues that no additional adjustment by the Department 
is required for movement expenses.
    Department Position: We partially agree with petitioners. 
Respondent did not demonstrate that transactions between Rautaruukki 
and JIT-Trans are at arm's length. In fact the prices charged to an 
unaffiliated party are greater than those charged to respondent.
    Respondent asserted at verification that ``[t]he rate charged the 
unaffiliated party is somewhat higher * * * because in the winter it is 
more expensive to go farther north (due to the ice) and also because it 
is more expensive to make an additional stop.'' Given the geographic 
location of Rautaruukki and Outokumpu Oy, we find respondent's 
explanation that some price differential is attributable to the 
additional expense of going farther north in the winter to be 
reasonable. However the charges to the affiliated party are higher in 
summer as well as in winter. (See Sales Verification Exhibit 26). For 
these final results, therefore, we are increasing Rautaruukki's 
reported U.S. movement expenses for all shipments by the absolute value 
of the amount of the difference in price charged the unaffiliated party 
and Rautaruukki for the summer. See Analysis Memorandum dated December 
15, 1997.
    Comment 6: Respondent claims that the Department erred in its 
selection of a weight conversion factor. Respondent states that the 
Department chose to apply as facts available the lowest conversion 
factor submitted by Rautaruukki, or 0.9059, because the Department was 
unable to verify respondent's reported weight conversion factors. 
Rautaruukki alleges that this conversion factor is aberrational and the 
Department's use of this factor distorts the verified information 
submitted by Rautaruukki. Rautaruuki claims that only one product 
control number in its database had a conversion factor of 0.9059, and 
that this product control number contains only one observation, a sale 
of painted plate. Respondent argues that this sale is not an identical 
or similar match to its U.S. sales under the Department's mode match 
criteria. Respondent notes that under the Department's model match 
hierarchy, painted versus not painted is the first factor to be 
considered. The respondent explained that none of its U.S. sales are of 
painted plate and argues that in selecting a conversion factor of 
0.9059, based solely on painted plate, the Department selected an 
aberrant non-representative factor. Respondent argues that its 
submitted data are the most accurate weight conversion factors. 
Respondent contends that its calculation of theoretical weight was 
explained in its submissions and at verification. In the event the 
Department continues to apply a facts available conversion factor, 
Rautaruukki urges the Department to apply an average of its reported 
factors, or 0.9870. Respondent argues that unlike the factor used in 
the preliminary results, at least this factor would be representative 
of Rautaruukki's submitted data.
    Petitioners claim that the facts available weight conversion factor 
selected by the Department is appropriate. Petitioners disagree that 
the

[[Page 2955]]

conversion factor used by the Department is aberrational. Further, 
petitioners argue that because Rautaruukki failed to provide sufficient 
support for any of its conversion factors at verification, the 
Department may make an adverse inference to ensure that the respondent 
does not benefit from its failure to provide the necessary information. 
See Certain Internal Combustion Industrial Forklift Trucks from Japan, 
62 FR 5592, 5594-95 (Feb. 6, 1997). Petitioners note that the 
Department may use as facts available data that are reported by the 
respondent or any other data it deems appropriate. See Uruguay Round 
Agreements Act, Statement of Administrative Action, A.R. Doc. No. 103-
316, 103d cong., 2d sess. at 869-870. Petitioners claim there is no 
requirement that the facts available selected by the Department reflect 
the actual data or be the most recent information. See e.g., Rhone 
Poulenc, Inc., v. United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990); 
Mitsubishi Belting Limited and MBL (USA) Corp. v. United States, Slip 
Op. No. 97-28, (CIT March 12, 1997) at 5. As the Department could not 
verify the conversion factors used by Rautaruukki, in petitioners' 
view, there is no reason to believe that an average of these unverified 
factors would be more accurate than the factor used by the Department. 
Petitioners add that using an average factor would essentially reward 
Rautaruukki for its failure to provide verifiable conversion factors. 
Petitioners conclude that the use of an average factor would not 
satisfy the Department's need to make an adverse inference in this 
instance and urge the Department to continue to use the factor employed 
in the preliminary results for the final results.
    Department's Position: We agree with petitioners. By not providing 
verifiable weight conversion factors, when respondent could have done 
so, we have determined that respondent failed to cooperate by not 
acting to the best of its ability to comply with a request for 
information. See Certain Cut-to-Length Carbon Steel Plate From South 
Africa, 62 FR 61731 (November 19, 1997). The Department first learned 
that Rautaruukki had not reported sale-specific weight conversion 
factors at sales verification. Rather, we were told, weight conversion 
factors were calculated for each product control number. The 
verification outline clearly states: Provide worksheets showing any 
conversions from actual to theoretical weight. Rautaruukki did not 
prepare any such worksheets in advance of verification. When asked at 
verification to support the weight conversion calculation for a 
specific product control number, Rautaruukki was unable to do so in the 
time available at the verification. Consequently, pursuant to section 
776(b) of the Act, an adverse inference is warranted in selecting facts 
available. Thus as facts available, we are continuing to use the weight 
conversion factor employed in the preliminary results of review. See 
Certain Cut-to-Length Carbon Steel Plate from Finland, 62 FR at 37,876.
    Comment 7: Respondent alleges that the Department erred by failing 
to consider subject merchandise which is manufactured to shipbuilding 
specification ``A'' as identical merchandise. Respondent claims that 
its customers sometimes demand that identical merchandise, such as 
shipbuilding plate grade ``A,'' be certified by the national 
classification society of the country in which the product will be 
used. Respondent states that the Department has treated all of the 
grade ``A'' shipbuilding plate, other than the grade used in the United 
States, as most similar to this grade, and that the Department assigned 
a unique weight to the U.S. specification and a different but uniform 
weight to all other grade ``A'' shipbuilding plate. Respondent claims 
that the Department is treating identical merchandise differently based 
on the identity of the classification society. Respondent contends that 
it demonstrated repeatedly during this administrative review that all 
grade ``A'' shipbuilding plate subject merchandise manufactured to the 
``A'' specification of shipbuilding plate is the same product, 
regardless of the classification society which provides the 
certification. Respondent claims that irrespective of national 
classification society, all grade ``A'' shipbuilding steel has 
identical chemistry, delivery condition, elongation, yield strength and 
tensile strength. Respondent claims that it provided mill certificates, 
which show not only that the chemical and physical properties are the 
same for all shipbuilding grade ``A'' steel, but also demonstrate that 
steel from the same cast or heat was used to meet orders for grade 
``A'' shipbuilding plate sold to different classification society 
certifications. Respondent states that it described the procedures that 
it underwent in order to qualify as a supplier of shipbuilding steels, 
and notes that in order to be qualified, the various national 
certification societies used common test pieces and test results. 
Respondent argues that this interchangeability of test pieces supports 
its claim that this material is identical and that the various 
societies apply the same standard for this material.
    Petitioners did not comment on this issue.
    Department Position: We disagree with respondent. Respondent's 
argument is based on an examination of the plate that was produced. As 
we have explained to respondent in this proceeding, the plate 
specification variable refers to the physical characteristics of the 
specification. See Analysis Memorandum for the preliminary results of 
the third administrative review of Certain Cut-to-Length Carbon Steel 
Plate From Finland (July 7, 1997). Thus, while it is possible to 
produce plate so that the same plate meets multiple national standards, 
this in no way demonstrates that the standards themselves are 
identical. As noted in the final results of the second review, prices 
can vary based on the specifications to which the product is sold, even 
though the product is physically identical. See Certain Cut-to-Length 
Carbon Steel Plate from Finland; Final Results of Antidumping Duty 
Administrative Review. 62 FR 18468 (April 15, 1997). See also analysis 
memo. We continue to find that there are certain differences between 
the various national specifications for grade A shipbuilding plate and 
are not changing the weights assigned to these products for these final 
results. We do note, however, that as there was no plate sold in the 
home market that was made to the same specification as the shipbuilding 
steel sold in the United States, maintaining the weights assigned to 
various products will not affect the home market models that are 
matched to U.S. sales.
    Comment 8: Respondent argues that the Department erred by comparing 
normal cut-to-length carbon steel plate sold to the U.S. market with 
beveled plate sold in the home market. Respondent claims that beveled 
plate is a structural steel product which requires separate and 
additional manufacturing and handling on a different product line. 
Respondent notes that it has created a special field to identify 
beveled plate as well as other prefabricated plate products, which may 
have the same physical characteristics as basic cut-to-length plate, 
but are manufactured by different processes and have different end 
uses. Respondent also notes that it has provided information about the 
different and additional costs associated with the production of 
beveled plate. Respondent contends that the Department has verified 
that beveled plate requires additional processing and the different 
nature of the product is reflected in

[[Page 2956]]

Rautaruukki's price list which established an (extra) for beveled 
plate.
    Petitioners allege respondent has failed to demonstrate that 
beveled plate is not comparable to the plate sold in the U.S. market. 
Petitioners contend that the Department expressly rejected the 
arguments raised by respondent in both the first and second 
administrative reviews. See Certain Cut-to-Length Carbon Steel Plate 
from Finland, 61 FR 2792, 2795 (January 29, 1996) and Certain Cut-to-
Length Carbon Steel Plate from Finland 62 FR 18468, 18471 (April 15, 
1997). Petitioners argue that the Department correctly determined in 
those prior reviews that Rautaruukki failed to establish beveling as a 
product-matching criterion, and that the Department found that beveled 
plate does not possess physical characteristics which make it unique 
from non-beveled plate with regard to applications and uses. 
Petitioners claim that the Department noted that Rautaruukki had the 
opportunity to suggest beveling as a characteristic for use in product 
matching, but failed to do so. See Certain Cut-to-Length Carbon Steel 
Plate from Finland, 61 FR at 2795. Petitioners argue that nothing has 
changed with respect to this issue in this review. In petitioners' 
view, respondent has not established on the record that beveling is a 
product matching criterion considered by the Department. Petitioners 
claim that respondent is simply seeking to create its own matching 
hierarchy. Petitioners state that the support cited by Rautaruukki is 
the same information that Rautaruukki submitted in the second 
administrative review information which failed to convince the 
Department that beveled plate should not be compared to the products 
sold in the U.S. market.
    Petitioners claim that the Department has correctly determined, and 
as Rautaruukki has conceded, beveled plate products do not possess any 
physical characteristics that set them apart from non-beveled plate 
products. Accordingly, petitioners argue that Rautaruukki's contentions 
regarding the treatment of beveled plate are without merit and should 
be rejected by the Department.
    Department Position: We agree with the petitioners. The Department 
correctly determined in those prior reviews that Rautaruukki failed to 
establish beveling as a product-matching criterion, and that the 
Department found that beveled plate does not possess physical 
characteristics which make it unique from non-beveled plate with regard 
to applications and uses. See Certain Cut-to-Length Carbon Steel Plate 
from Finland, 61 FR 2792, 2795 and Certain Cut-to-Length Carbon Steel 
Plate from Finland, 62 FR 18468, 18471. The documentation submitted by 
Rautaruukki in the course of this review does not establish the 
relevance of beveling as a product matching criterion. We have not 
changed our treatment of beveled products for these final results.
    Comment 9: Respondent contends that the Department failed to 
convert harbor expenses from Finnish markka to U.S. dollars in its 
calculation of margin expenses. The respondent suggests that we make an 
adjustment similar to the adjustment made for international freight 
charges for affiliated party charges.
    Additionally, respondent claims that the Department did not convert 
direct selling expenses and credit expenses for U.S. sales from Finnish 
markka to U.S. dollars in the margin calculation program. Rautaruukki 
reported direct selling and credit expenses in Finnish markka, but the 
margin calculation program applies these figures in U.S. dollars, 
resulting in a skewed total for direct expenses for U.S. sales.
    Petitioners did not comment on this issue.
    Department's Position: We have converted harbor expenses, U.S. 
direct selling expenses, and U.S. credit expenses from Finnish markka 
to U.S. dollars. We note that the affiliated party charges were in U.S. 
dollars so no currency conversion was required for these expenses.
    Comment 10: Rautaruukki claims that the Department erred in 
applying the theoretical weight conversion factor to its verified COP 
and CV amounts. Rautaruukki argues that the Department should have 
applied the weight conversion factor only to the sales quantities to 
insure that all sales were reported on the same (i.e., theoretical 
weight) basis and not to reported costs which reflect actual costs 
incurred for delivered or shipped quantities of subject merchandise. 
Rautaruukki notes that its U.S. sales were all reported on a 
theoretical weight basis, while some of its home market sales were 
reported on a theoretical weight basis and some were reported on an 
actual weight basis. Consequently, for the sales made on a theoretical 
weight basis, Rautaruukki contends that the costs associated with these 
sales were reported on a theoretical weight basis, not on an actual 
weight basis. Therefore, Rautaruukki argues that if the Department 
decides to apply the conversion factor to costs, it should be applied 
only to those products sold on an actual weight basis. Rautarrukki 
suggests that the Department would need to recalculate costs for only 
two of the three products which were matched in the model match program 
because one product's costs was reported only on a theoretical weight 
basis. To recalculate the costs for the other two matched products, 
Rautaruukki recommends that the Department calculate the relative 
distribution or allocation of costs associated with each weight basis 
using the percentage of sales made on each basis. Then, the Department 
could adjust the costs associated with sales made on an actual weight 
basis by applying the conversion factor and add this figure to the 
costs reported on a theoretical weight to arrive at a figure for the 
cost for all sales on a theoretical weight basis.
    Petitioners state that Rautaruukki's claim that cost data are 
calculated on both theoretical and actual weight basis constitutes new 
information that the Department has not verified. Petitioners cite the 
Department's cost verification report which states that to calculate 
the weighted-average cost for all extras, Rautaruukki used shipped 
quantities to determine the per ton cost amounts. Because Rautaruukki's 
case brief dated September 8, 1997, indicates that Rautaruukki 
calculated the average cost per ton using a combination of costs based 
on both theoretical weights and actual weights, petitioners argue that 
Rautaruukki's cost reporting methodology is flawed and the reported 
amounts are inaccurate and unreliable. Therefore, petitioners cite 
Final Results of Antidumping Duty Administrative Review: Certain Cut-
to-Length Carbon Steel Plate from Sweden, 62 FR 18396, 18398-99 (April 
15, 1997), and recommend that the Department reject Rautaruukki's 
reported per ton costs and apply total facts available.
    Department Position: We agree with petitioners that Rautaruukki's 
cost calculation methodology is flawed in that it relied on production 
quantities based on both theoretical and actual weights. We disagree 
with petitioners, however, that Rautaruukki's cost reporting 
methodology warrants use of total facts available. Under its submission 
methodology, Rautaruukki first computed a weighted-average cost of 
manufacturing for the subject merchandise based on two broad product 
categories, plate and cut-to-length coil. At verification, we confirmed 
that each of these weighted-average cost categories was calculated by 
dividing actual costs by total production quantity on an actual weight 
basis (See Production Reports per February 27, 1997, Submission at 
Exhibit 3, calculation 3). Rautaruukki then computed an average cost 
for

[[Page 2957]]

extras by multiplying product-specific extra amounts by product-
specific sales quantities (some of which were on an actual weight 
basis, others on a theoretical weight basis) and dividing by the same 
sales quantities. Because, in the normal course of business, 
Rautaruukki maintains product-specific sales reports but not product-
specific production reports, it used shipped quantities of each product 
to compute the average cost for extras. Rautaruukki deducted this 
average cost for extras from the weighted-average cost of manufacturing 
for each broad product category in order to compute the average base 
cost for the category. To compute product-specific manufacturing costs, 
Rautaruukki added to the average base cost the same product-specific 
extra amounts used to derive the base cost.
    By using actual production weights to compute the average costs for 
each of the broad product categories, and by relying on a mix of 
theoretical and actual production weights in determining the average 
cost of extras, Rautaruukki's submitted costs represent a mix of weight 
bases that do not accurately reflect the per-unit costs incurred to 
produce the subject merchandise. To correct this flaw, we increased 
Rautaruukki's reported COP and CV amounts by the theoretical-to-actual 
weight conversion factor. See Comment 6.
    Comment 11: Petitioners argue that the Department should reject 
Rautaruukki's COP and CV data and use facts available because they 
contend that Rautaruukki's product-specific cost data are not based on 
actual costs incurred during the POR, are not supported by source 
documentation, cannot be reconciled to Rautaruukki's audited financial 
statements, and are not supported by tests performed by the Department. 
Petitioners cite Final Results of Antidumping Duty Administrative 
Review: Certain Cut-to-Length Carbon Steel Plate from Finland, 62 FR 
18468, 18472-18473 (April 15, 1997), in which the Department rejected 
Rautaruukki's cost data in the second administrative review, to support 
its argument. Petitioners state that the problems identified in the 
second administrative review persist and that there is insufficient 
record evidence for the third administrative review to support the 
Department's reversal of its previous decision.
    Petitioners argue that the submitted costs be rejected because the 
Department verified that product-specific costs are not based on the 
POR. Petitioners note that all documentation provided by Rautaruukki to 
substantiate its reported product-specific costs was from outside the 
POR. Therefore, petitioners maintain that the Department has no 
reliable basis or record evidence to determine whether the submitted 
data reflect actual costs for the POR. Petitioners further contend that 
the Department cannot rely on documentation provided during this review 
which relates to previous review periods to support Rautaruukki's 
historical production costs since the Department previously rejected 
this information.
    Rautaruukki argues that the Department's decision regarding costs 
submitted in this third administrative review must be based on the 
facts of the current proceeding and not on alleged deficiencies or 
factual errors in previous administrative proceedings. Rautaruukki 
asserts that record evidence in the current review clearly states that 
the Department verified Rautaruukki's submitted product-specific 
information, reviewed its internal system which tracks quality and 
dimensional costs by product grade, and reconciled these costs with 
Rautaruukki's profit-and-loss accounts. Rautaruukki contends that the 
costs recorded in the quality cost tables dated July 31, 1995, were the 
costs in effect throughout the POR, and therefore, are a proper basis 
for calculating product-specific costs. Rautaruukki also states that 
the Department verified its dimensional extras costs and reconciled 
these figures with Rautaruukki's financial reports. Lastly, Rautaruukki 
argues that the Department tested and verified costs for specific 
products and reconciled these costs with Rautaruukki's financial 
statements. Therefore, Rautaruukki maintains that its product-specific 
cost data was verified by the Department to be accurate and reliable.
    Department Position: We disagree with petitioners' contention that 
we must reject totally Rautaruukki's submitted COP and CV data for this 
review. First, as discussed in Comment 10 above, Rautaruukki relied on 
actual costs incurred and actual tonnages produced during the POR to 
calculate weighted-average costs for its broad categories of plates and 
cut-to-length products. In order to derive the total base cost for each 
category, Rautaruukki deducted from the weighted-average cost, an 
amount for the average cost of extras. The company then added back 
costs for product-specific extras. Contrary to petitioners' assertions, 
there is nothing inherently unreliable or theoretically unsound about 
Rautaruukki's underlying cost allocation methodology. Rather, much like 
other manufacturers that rely on standard costs as a means to 
distribute actual costs among specific products, Rautaruukki relies on 
a system of base and standard extra costs to allocate its actual 
production costs among the company's plate and cut-to-length products. 
We found this methodology reasonable.
    Second, Rautaruukki's product-specific costs are supported by 
source documentation. In its February 27, 1997, Section D supplemental 
response, Rautaruukki provided documentation of the detailed 
calculations used to derive its quality and dimensional extras costs. 
Rautaruukki notes that these calculations are based on engineering 
standards and the company's production experience. Petitioners chose 
not to challenge the validity or accuracy of Rautaruukki's 
calculations. Instead, the petitioners argue that because Rautaruukki 
did not update these standards during the POR, the cost of extras as 
reported by the company are unreliable. For this review, however, we 
have no reason to believe that Rautaruukki's extra cost calculations, 
which were based on data used by the company during the POR, do not 
reasonably represent the cost differences incurred to produce 
individual products. It is unnecessary for Rautaruukki to update its 
standard extra costs every year so long as these amounts continue to 
accurately reflect costs incurred by the company during the year.
    Third, the reported costs can be reconciled to Rautaruukki's 
audited financial statements. During the cost verification, we 
reconciled Rautaruukki's reported product-specific costs to its audited 
financial statements noting only a slight difference. See Comment 14 
below for further discussion.
    Fourth, Rautaruukki's product-specific costs are supported by tests 
performed by the Department during verification. We tested 
Rautaruukki's calculations of weighted-average costs, base costs, and 
extra costs (see cost verification report at pages 7 through 14). 
During our verification, we determined that the standard costs for 
extras used by Rautaruukki in the normal course of business during the 
POR were based on actual production and cost data, engineering 
standards, and company experience. As discussed above in this comment, 
we do not believe that it is necessary for Rautaruukki to update every 
year the tables containing these standard extra costs, where such 
standard costs continue to reflect the company's production cost 
experience with reasonable accuracy. In addition, in contrast to 
petitioners' argument, we

[[Page 2958]]

found it reasonable that Rautaruukki reported identical cost of 
manufacturing amounts for a small number of CONNUMs even though these 
products had slightly different physical characteristics. We verified 
the fact that these products had the same cost for various reasons. For 
example, in some instances, differences in the costs of specific extras 
offset one another, making the costs of the two products the same in 
total. In other instances, products with differing plate specifications 
underwent the same processing and, as a result, incurred the same costs 
under Rautaruukki's accounting system. Thus, it was not unreasonable 
for certain of Rautaruukki's products to have identical costs.
    Last, to support their argument that the cost data submitted in 
this review should be rejected, the petitioners cite Final Results of 
Antidumping Duty Administrative Review: Certain Cut-to-Length Carbon 
Steel Plate from Finland, 62 FR 18468, 18472-18473 (April 15, 1997), in 
which the Department rejected Rautaruukki's cost data in the second 
administrative review. We note that any decision in a specific review 
must be made on the facts of the record for that review. In this 
review, as explained above, we were able to verify Rautaruukki's cost 
extras and found their reporting methodology to be reasonable. As the 
Department has stated, we review each period independently and may 
determine that a change in analysis is appropriate. * * * Thus, the 
Department is not bound in a current administrative review to strictly 
adhere to the methodology or practice used in a previous review. See 
Certain Dried Heavy Salted Codfish from Canada, 54 FR 13211, 13213 
(March 31, 1989).
    Comment 12: Petitioners state that Rautaruukki's variable cost of 
manufacturing data reported for its home market and U.S. sales differs 
substantially from the amounts derived from the COP and CV datasets. 
Petitioners argue that the Department's calculation of variable costs 
as used for the preliminary determination, which were computed by 
subtracting the fixed overhead amount reported in the COP dataset from 
the total cost of manufacturing amount reported in the COP dataset, 
fails to accurately calculate product-specific costs. Petitioners 
reason that this methdology is unacceptable because Rautaruukki 
reported the same fixed overhead amount for every product produced, 
thereby disregarding fixed-cost differences between products.
    As the Department cannot derive accurate product-specific variable 
costs from Rautaruukki's COP dataset, petitioners recommend that the 
Department use an adverse facts available percentage of 24.95 percent, 
the margin from the last administrative review, for calculating the 
difference in merchandise (difmer) adjustment. As alternative adverse 
facts available, petitioners suggest that the Department use 
Rautaruukki's lowest reported home market variable cost and its highest 
reported U.S. variable cost to calculate the difmer adjustment for all 
non-identical comparisons. Petitioners assert that use of adverse facts 
available is appropriate since Rautaruukki failed to submit revised 
data in response to several requests made by the Department that 
Rautaruukki ensure that its home market and U.S. sales files reflect 
the same variable cost of manufacturing amounts as reported in its COP 
and CV datasets. petitioners cite Final Results of Antidumping Duty 
Administrative Review: Porcelain-on-Steel Cookware from Mexico, 61 FR 
54616, 54618 (October 21, 1996); Preliminary Determination of Sales at 
Less than Fair Value: Class 150 Stainless Steel Threaded Pipe Fittings 
from Taiwan, 59 FR 10784, 10785 (March 8, 1994); and Final 
Determination of Sales at Less than Fair Value: Class 150 Stainless 
Steel Threaded Pipe Fittings from Taiwan, 59 FR 28432 (July 28, 1994) 
to support the use of adverse facts available.
    Petitioners further contend that if the Department does not use 
adverse facts available, the Department should at least apply neutral 
facts available for the difmer adjustment. As neutral facts available, 
petitioners suggest that the Department apply an amount equal to the 
twenty percent cap as the difmer adjustment. Petitioners cite Notice of 
Final Results and Partial Termination of Antidumping Duty 
Administrative Reviews: Tapered Rolled Bearings, Four Inches or Less in 
Diameter, and Components Thereof, from Japan, 59 FR 56035, 56048, which 
was upheld in NTN Bearing Corp. of America v. United States, 924 F. 
Supp. 200 (Ct. Int'l Trade 1996), to show that the Department's 
practice has been to apply an amount equal to the twenty percent cap in 
those instances where a respondent fails to provide variable cost data 
in the requisite form for the difmer test.
    Rautaruukki disagrees with the petitioners' claim that the 
Department erred in calculating Rautaruukki's variable costs by 
subtracting fixed overhead costs from the total cost of manufacture 
reported in the COP and CV datasets. Rautaruukki maintains that the 
Department's calculation is acceptable because the Department verified 
that the cost data are in accordance with its practice and generally 
accepted accounting principles.
    Department Position: We agree with petitioners that Rautaruukki 
incorrectly reported its fixed manufacturing costs by reporting only 
amounts related to producing base products (i.e., all products were 
assigned the same amount of fixed manufacturing costs). As a result, 
the methodology used by the Department for the preliminary 
determination (determining product-specific variable cost of 
manufacturing by subtracting the reported product-specific fixed cost 
of manufacturing from the product-specific total cost of manufacturing) 
failed to account for fixed-cost differences arising from processing 
route differences. This flaw in methodology, however, has no impact on 
the similar product matches for Rautaruukki in this review. The only 
difference between home market sales and the U.S. sales to which they 
are matched is the specification of the steel. All other model match 
criteria, including width and thickness, and identical. With respect to 
specification, all U.S. sales and the home market sales that are 
matched to those U.S. sales are shipbuilding grade A material. As 
respondent has argued throughout this proceeding (See Comment 7), all 
shipbuilding grade A material is manufactured the same regardless of 
the national classification standard to which it is ultimately 
certified. Petitioners have not disputed these claims. Thus, with 
respect to these sales, there are essentially no differences in the 
total cost of manufacturing for the matched products, and no 
differences in the processing routes or machines used in production. 
Accordingly, we consider the methodology used by the Department for the 
preliminary results reasonable and non-distortive for purposes of this 
review. We are continuing to use this methodology for these final 
results.
    Comment 13: Petitioners claim that Rautaruukki improperly reduced 
its costs associated with the production of subject merchandise by 
including revenue from sales of slab in the amount it reported for 
scrap and sales of by-products. Petitioners note that slabs are semi-
finished, non-subject merchandise and that the income from sales of 
slab should not be deducted from costs. Petitioners recommend that the 
Department exclude Rautaruukki's reported scrap amount from the 
calculation of total costs because the

[[Page 2959]]

Department has no way of knowing what percentage of Rautaruukki's scrap 
amount is from sales of slab.
    Rautaruukki responds that it did not report slab as a by-product 
and offset its COP and CV data by revenues from the sale of slabs. 
Rautaruukki notes that the Department verified that by-products 
reported include burnt lime, coke, coal tar, sulfur, benzene, nut coke, 
and utilities. Rautaruukki maintains that slab is not included as a by-
product offset in its submitted costs.
    Department Position: We agree with Rautaruukki. Although 
Rautaruukki officials stated that in their management accounting 
monthly reports, they included sales of slabs with by-product turnovers 
(See Sales Verification Report at 5), we found no evidence to show that 
Rautaruukki had improperly offset reported production costs with 
revenue from the sale of slab. As discussed in our cost verification 
report at page 7, by-product revenues offset to the cost of subject 
merchandise included burnt lime, coke, coal tar, sulfur, benzene, nut 
coke, and utilities. Because we have no evidence that Rautaruukki 
included sales of slab in the by-product offset, we made no adjustment.
    Comment 14: Petitioners argue that if the Department accepts 
Rautaruukki's product-specific cost data, the Department should make an 
adjustment to account for the difference between Rautaruukki's May 5, 
1997 COP dataset, which was submitted after verification, and its 
audited financial statements. Petitioners note that the reconciliation 
reviewed by the Department was based on data submitted prior to 
verification and that the May 5, 1997 dataset no longer reconciles to 
Rautaruukki's financial statements. As Rautaruukki did not explain 
whether the discrepancy between its revised COP dataset and its 
financial statements relates to subject or non-subject merchandise, 
petitioners recommend that the Department adjust the submitted data by 
the amount of the discrepancy.
    Rautaruukki replies that the slight discrepancy between its costs 
submitted on May 5, 1997, and its audited financial statements 
represents omitted costs of products sold to third countries that were 
outside the scope of this administrative review. Rautaruukki further 
contends that the Department verified the accuracy and validity of its 
cost reconciliation and its production costs for plate. Therefore, 
Rautaruukki concludes that an adjustment to its reported costs is 
unwarranted.
    Department Position: We agree with practitioners. The 
reconciliation reviewed by the Department did not include the 
correction of errors identified at the beginning of verification (See 
Cost Verification Report at 3, 6, and 7). Based on our revised 
reconciliation, it appears that the COP and CV data submitted by 
Rautaruukki in its May 5, 1997, response did not capture all costs as 
recorded under the company's financial accounting system. As we have no 
evidence to support Rautaruukki's contention that the difference 
relates to third country sales that were outside the scope of this 
administrative review, we adjusted Rautaruukki's submitted costs for 
this small difference. See Analysis Memorandum dated December 15, 1997.

Final Results of Review

    As a result of our review, we have determined that no margin exists 
for Rautaruukki Oy for the period of August 1, 1995 through July 31, 
1996. 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 plate from Finland 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 company will be zero; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit 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, 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) 
if neither the exporter nor the manufacturer is a firm covered in this 
review, the cash deposit rate will be 40.36 percent. This is the all 
others rate from the amended final determination in the LTFV 
investigation. See Amended Final Determination Pursuant To CIT 
Decision: Certain Cut-To-Length Carbon Steel Plate from Finland, 62 FR 
55782 (October 28, 1997). 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 Section 351.402(f) of the Department's regulations 
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 Sections 351.305 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 this notice are in accordance with 
section 751 (a)(1) of the Act (19 U.S.C. 1675(a)(1)) and Sec. 351.213 
and 351.221 of the Department's regulations.

    Dated: January 12, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-1277 Filed 1-16-98; 8:45 am]
BILLING CODE 3510-DS-M