Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices 30185

Comments submitted in response to

this notice will be summarized and/or

included in the request for OMB

approval of this information collection;

they also will become a matter of public

record.

Dated: May 29, 1998.

Madeleine Clayton,

Management Analyst, Office of Management

and Organization.

[FR Doc. 98–14729 Filed 6–2–98; 8:45 am]

BILLING CODE 3510–DR–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–427–811]

Certain Stainless Steel Wire Rods

From France: Final Results of

Antidumping Duty Administrative

Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of

Antidumping Duty Administrative

Review.

SUMMARY: On January 26, 1998, the

Department of Commerce (the

Department) published the preliminary

results of the third administrative

review of the antidumping duty order

on certain stainless steel wire rods from

France. This review covers Imphy S.A.

and Ugine-Savoie, two manufacturers/

exporters of the subject merchandise to

the United States. The period of review

(POR) is January 1, 1996 through

December 31, 1996. We gave interested

parties an opportunity to comment on

our preliminary results. Based on our

analysis of the comments received, we

have changed the results from those

presented in the preliminary results of

review.

EFFECTIVE DATE: June 3, 1998.

FOR FURTHER INFORMATION CONTACT:

Robert Bolling or Stephen Jacques, AD/

CVD Enforcement Group III, Office 9,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, DC 20230; telephone: (202)

482–3434 or (202) 482–1391,

respectively.

SUPPLEMENTARY INFORMATION

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (the Act), are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round

Agreements Act (URAA). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are to 19

C.F.R. Part 353 (1997).

Background

On January 26, 1998, the Department

published in the Federal Register the

preliminary results of the third

administrative review of the

antidumping duty order on certain

stainless steel wire rods from France (63

FR 3704, January 26, 1998). The

Department has now completed this

administrative review in accordance

with section 751 of the Act.

Scope of the Review

The products covered by this

administrative review are certain

stainless steel wire rod (SSWR) products

which are hot-rolled or hot-rolled

annealed, and/or pickled rounds,

squares, octagons, hexagons, or other

shapes, in coils. SSWR are made of alloy

steels containing, by weight, 1.2 percent

or less of carbon and 10.5 percent or

more of chromium, with or without

other elements. These products are only

manufactured by hot-rolling, are

normally sold in coiled form, and are of

solid cross section. The majority of

SSWR sold in the United States is round

in cross-sectional shape, annealed, and

pickled. The most common size is 5.5

millimeters in diameter.

The SSWR subject to this review is

currently classifiable under subheadings

7221.00.0005, 7221.00.0015,

7221.00.0020, 7221.00.0030,

7221.00.0040, 7221.00.0045,

7221.00.0060, 7221.00.0075, and

7221.00.0080 of the Harmonized Tariff

Schedule of the United States (HTSUS).

Although the HTSUS subheadings are

provided for convenience and Customs

purposes, our written description of the

scope of the order is dispositive.

Analysis of Comments Received

We gave interested parties an

opportunity to comment on the

preliminary results. We received

comments and rebuttal comments from

Imphy S.A. and Ugine-Savoie,

manufacturers/exporters of the subject

merchandise (respondents), and from Al

Tech Specialty Steel Corp., Armco

Stainless & Alloy Products, Carpenter

Technology Corp., Republic Engineered

Steels, Talley Metals Technology, Inc.,

and United Steelworkers of America,

AFL-CIO/CLC (petitioners).

Comment 1: Respondents argue that

the Department improperly resorted to

constructed value (CV), instead of

utilizing contemporaneous home market

sales made in the ordinary course of

trade. Respondents note that in the

Department’s preliminary results, the

Department disregarded numerous

home market sales that were below the

cost of production and, therefore,

outside the ordinary course of trade. In

these instances, respondents contend

that the Department inappropriately

resorted to CV, despite the existence of

contemporaneous home market sales of

the foreign like product made in the

ordinary course of trade. Consequently,

respondents argue that the Department

contravened the Court of Appeals for

the Federal Circuit (CAFC) January 8,

1998 decision in CEMEX v. United

States, 133 F.3d 897 (Fed. Cir. 1998)

(CEMEX). Respondents state that in

CEMEX, the Department disregarded

home market sales of subject

merchandise that was comparable to the

merchandise sold in the United States,

as not in the ordinary course of trade

and, thus, ineligible as the basis for

determining foreign market value.

Therefore, the Department used CV as

the basis for comparing U.S. sales.

Respondents note that although

CEMEX was decided under pre-URAA

law, the reasoning of the Court is

applicable to the new statute. The new

statute continues to subordinate CV to

home market sales for determining

normal value, therefore, allowing the

Department to use CV only where price

for home market sales of the foreign like

product in the ordinary course of trade

cannot be determined.

Respondents note that in recent

Departmental decisions, the Department

has referenced CEMEX, but never

applied it’s holding due to time

constraints and the fact that the case

was decided under pre-URAA law.

Respondents contend that although

CEMEX was decided under pre-URAA

law, the principles are applicable and

must be applied. Respondents argue that

by applying its own matching hierarchy,

the Department has the facts on the

record to confirm that contemporaneous

sales of foreign like product in the

ordinary course of trade exist; therefore,

the Department does not need to resort

to CV in these instances.

Petitioners argue that the Department

should not modify its preliminary

results with regard to the CEMEX

decision. Petitioners contend that the

Department has examined and rejected

arguments that it should depart from its

normal methodology and base normal

value on other models if the Department

finds that all contemporaneous sales of

the identical or most similar

merchandise are made at below-cost

prices, citing Final Results of

Antidumping Administrative Review:

Canned Pineapple Fruit from Thailand;
30186 Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices

63 FR 7392, 7393 (February 13, 1998)

(Pineapple). In the Pineapple case,

petitioners note that the Department

determined that it should not modify its

preliminary methodology to conform to

CEMEX, ‘‘Because the Court’s decision

was issued so close to the deadline for

completing this administrative review,

we have not had sufficient time to

evaluate and apply (if appropriate and

if there are adequate facts on the record)

the decision to the facts of the ‘‘postURAA’’ case. For these reasons, we have

determined to continue to apply our

policy regarding the use of CV when we

have disregarded below-cost sales from

the calculation of NV.’’ Petitioners also

state that a similar approach was

applied in Final Results of Antidumping

Administrative Review: Silicon Metal

from Brazil; 63 FR 6899 (February 11,

1998).

Petitioners state that if the

Department was to revise its modelmatch methodology, the Department

should focus on the facts on the record

because, when this review began, it was

assumed that the Department would use

constructed value when the identical or

most similar matches identified were at

below-cost prices. Thus, petitioners

argue that the record of this case does

not permit use of the CEMEX

methodology. Petitioners point to the

preliminary determinations in the

investigations of stainless steel wire rod

as evidence. See Notice of Preliminary

Determination of Sales at Less Than

Fair Value and Postponement of Final

Determination: Stainless Steel Wire Rod

from Taiwan; 63 FR 10841 (March 5,

1998) (SSWR from Taiwan). Petitioners

note that in SSWR from Taiwan, the

Department stated that in order to apply

the CEMEX methodology, it would need

information on the appropriate product

comparisons following application of

the below-cost test. Additionally,

petitioners argue that in SSWR from

Taiwan, the Department did not rely on

respondents’ internal-code systems to

identify the next most similar models as

a means to implement CEMEX.

Therefore, the Department issued a

supplemental questionnaire in SSWR

from Taiwan requesting additional

information on product characteristics

in order to be able to search for the next

most similar model when a matched

product was sold below cost.

Petitioners argue that the

Department’s approach in the SSWR

from Taiwan is in contrast to this case.

In this review, petitioners argue that the

Department has accepted respondents’

internal product-coding system, in lieu

of Department-developed criteria. Thus,

petitioners assert that by relying on

respondents’ internal product-coding

system and using the CEMEX

methodology, the Department would

use sales of less similar models as the

basis for normal value instead of CV.

Moreover, petitioners contend that the

Department has not obtained additional

information regarding more precise

physical characteristics of the subject

merchandise, or alternative matches to

the models proposed, that it would need

in order to implement CEMEX.

Petitioners note that the respondents

offered no more than three similar types

of merchandise as a basis for

comparison. Additionally, petitioners

claim that the record data does not

provide adequate alternative matches

for the Department to apply the CEMEX

methodology. Finally, petitioners

maintain that were the Department to

apply CEMEX in this case, it would be

inconsistent with its own conclusions in

SSWR from Taiwan. For these reasons,

petitioners argue that the Department

should reject respondents’ allegation

that it should apply CEMEX and state

that, given the short time since the

Federal Circuit decision and the lack of

adequate record data, the Department

will continue to apply its normal

methodology of resorting to CV where

the model selected for comparison is not

in the ordinary course of trade.

Department’s Position: We agree with

the respondents. In CEMEX, based on

the pre-URAA version of the Act, the

Court discussed the appropriateness of

using CV as the basis for foreign market

value when the Department finds home

market sales to be outside the ‘‘ordinary

course of trade.’’ The URAA amended

the definition of sales outside the

‘‘ordinary course of trade’’ to include

sales disregarded under section

773(b)(1) of the Act. See section 771(15)

of the Act. Consequently, the

Department has reconsidered its

practice in accordance with this court

decision and has determined that it

would be inappropriate to resort

directly to CV, in lieu of foreign market

sales, as the basis for normal value if the

Department finds foreign market sales of

merchandise identical or most similar to

that sold in the United States to be

outside the ‘‘ordinary course of trade.’’

We will match a given U.S. sale to

foreign market sales of the next most

similar model when all sales of the most

comparable model are below cost. The

Department will use CV as the basis for

normal value only when there are no

above-cost sales that are otherwise

suitable for comparison. Therefore, in

this proceeding, when making

comparisons in accordance with section

771(16) of the Act, we considered all

products sold in the home market as

described in the ‘‘Scope of Review’’

section of this notice, that were in the

ordinary course of trade for purposes of

determining appropriate product

comparisons to U.S. sales. Where there

were no sales of identical merchandise

in the home market made in the

ordinary course of trade to compare to

U.S. sales, we compared U.S. sales to

sales of the most similar foreign like

product made in the ordinary course of

trade, based on the characteristics listed

in Sections B and C of our antidumping

questionnaire. We have implemented

the Court’s decision in this case, to the

extent that the data on the record

permitted. Where there were neither

identical nor similar matches reported

by respondents, we have used CV as the

basis for normal value.

Comment 2: Respondents argue that

the Department should base CV profit

only on information pertaining to the

POR as stated in section 773(a)(4) of the

Act. Further, respondents contend that

in its preliminary results, the

Department did not follow this

methodology, but based CV on data

from both within and outside the POR.

They note that the Department used the

cost of manufacturing (COM) and

general and administrative expenses

(G&A) for the POR, but calculated CV

profit on all reported home market sales

made in the ordinary course of trade.

Finally, respondents argue that the

approach taken by the Department was

inaccurate and unfair because this

approach encompassed the 26-month

home market window.

Respondents contend that the purpose

of this administrative review is to

determine whether imports into the

United States during the POR were sold

at prices that would constitute

dumping. Respondents assert that the

statute requires that ‘‘a fair comparison

shall be made between the export price

or constructed export price and normal

value,’’ and section 773(a)(1)(A) of the

Act provides that in order to achieve a

fair comparison with the export price or

constructed export price, normal value

shall be the price ‘‘at a time reasonably

corresponding to the time of the sale

used to determine the export price or

constructed export price.’’ They argue

that CV is a surrogate for price, and

must be contemporaneous with the U.S.

sale being compared. Thus, the

Department should use information to

calculate CV that corresponds to sales

during the POR.

Respondents state that they reported

actual costs incurred for the POR for

both COP and CV as required by the

Department’s questionnaire. However,

in calculating CV profit for this case, the

Department did not use POR data, but
Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices 30187

used all reported home market sales,

which covered the period January 1995

through February 1997. Respondents

argue that basing CV profit on market

behavior and conditions outside the

POR leads to distortions and is

inappropriate, and the Department

should revise its methodology for the

final results to calculate CV profit based

on home market sales in 1996.

Petitioners state that the Department’s

calculation of CV profit is consistent

with the Act and past practice.

Petitioners note that the calculation of

CV profit is to be based on profits

earned ‘‘in connection with the

production and sale of a foreign like

product, in the ordinary course of trade,

for consumption in the foreign

country.’’ See section 773(e)(2)(A) of the

Act.

Petitioners note that the home market

sales identified in this review are

consistent with the Department’s

established practice. The home market

sales span the period from three months

before the first U.S. sale to two months

after the last U.S. sale in the POR. Thus,

these sales fit the meaning of the Act.

Petitioners contend that the fact that

respondents reported and made U.S.

sales in a 26 month period is not a flaw

or unfair but merely reflects

respondents’ particular reporting

period.

Petitioners assert that the Department

may not use one database of home

market sales for its determination of

normal value sales comparisons and

another for its determination of CV

profit.

Furthermore, petitioners contend that,

contrary to respondents’ claim, the

Department has traditionally interpreted

the phrase ‘‘at a time reasonably

corresponding to the time’’ found in

section 773(a)(1)(A) to mean a home

market sale within the 90–60 day

window. Since respondents accepted

this window, petitioners argue that

respondents must also accept this same

database in identifying home market

sales from which to calculate CV profit.

Petitioners state that it is the

Department’s practice to rely on all

home market sales reported in the

foreign market sales database for

determining normal value as the basis

for calculating CV profit. Moreover,

petitioners argue that the Department

has used this approach in Notice of

Preliminary Results of Antidumping

Duty Administrative Review: Tapered

Roller Bearings from Japan; 61 FR 25200

(May 20, 1996). Accordingly, petitioners

assert that the Department should

continue using respondents’ reported

home market sales as the basis for

calculating CV profit.

Department’s Position: We disagree

with respondents. In this case, the

respondents reported home market sales

based on the standard 60-day/90-day

contemporaneous window which, in

this review, encompassed a 26-month

period. The Department has used the

home market sales during this 26-month

period to form the basis of its normal

value calculation. Thus, in accordance

with its normal practice, the Department

calculated CV profit based on the

contemporaneous sales data. In this

case, U.S. sales span a period of 21

months. It would not be appropriate to

limit the CV profit calculation to 12

months of home market sales, since this

would not reflect profit on all

contemporaneous sales.

The fact that we used costs based on

a different period (in this case, 12

months) does not render our CV profit

calculation inappropriate or

unreasonable. The respondents only

reported cost of manufacture and

general administrative expenses for the

1996 calendar year (the POR) as the

basis for costs of all reported home

market sales. The respondents did not

claim that the costs reported for this

period were in any way

unrepresentative of the costs incurred

for sales throughout the 26-month

period. In fact, these same cost figures

formed the basis for COP in determining

whether any of the home market sales

made during the 26-month sales

reporting period had been sold at belowcost prices within the meaning of

section 773(b) of the Act. Thus, it was

not unreasonable for the Department to

calculate CV profit using the same home

market cost data that it used to test for

below-cost sales.

Further, if the respondents believed

that for any reason the submitted costs

were not representative of the 26-month

period, they should have informed the

Department that the 12-month costs

used to calculate CV profit were not

representative of its 26-month costs.

Respondents knew from past experience

that it is the Department’s practice,

when calculating CV profit based on

reported home market sales, to calculate

CV profit based on all reported

contemporaneous home market sales.

The respondents have accepted this

approach in past administrative reviews

(see Certain Stainless Steel Wire Rods

from France: Final Results of

Antidumping Duty Administrative

Review, 61 FR 47874 (September 11,

1996); Certain Stainless Steel Wire Rods

from France: Final Results of

Antidumping Duty Administrative

Review, 62 FR 7206 (February 18, 1997))

and have offered no compelling reason

to alter it in this review.

Comment 3: Respondents argue that

in calculating CEP profit in the

preliminary results, the Department

inappropriately excluded non-arm’s

length home market sales used in the

calculation of CEP profit. Respondents

contend that this methodology is

contrary to both the statute and the

Statement of Administrative Action

(SAA), and is a departure from the

methodology used in the prior review.

Respondents assert that section

772(f)(2)(C)(i) of the Act provides that

CEP profit will be calculated based on

expenses and profit for all sales in the

United States and home market. Also,

respondents note that the SAA states

that ‘‘the total profit is calculated on the

same basis as the total expenses.’’ See

SAA at 155. Additionally, the SAA

states that ‘‘the total expenses are all

expenses incurred by or on behalf of the

foreign producer and exporter and the

affiliated seller in the United States with

respect to the production and sale of the

first of the following alternatives which

applies: (1) The subject merchandise

sold in the United States and the foreign

like product sold in the exporting

country (if Commerce requested this

information in order to determine

normal value and the constructed export

price).’’ See SAA at 154. Therefore,

respondents argue that the statute and

the SAA are clear that both the expenses

used to allocate the profit to the U.S.

sales, and the profit to be allocated,

should be based on all sales of the

subject merchandise in the United

States and the foreign like product in

the foreign market. Respondents

maintain the statute does not contain

any provision for disregarding any sales

in the calculation of CEP profit; and

maintain that disregarding any such

sales would be contrary to section 772(f)

of the Act.

Respondents note that the

Department’s recent policy bulletin

(‘‘Calculation of Profit for Constructed

Export Price’’ Policy Bulletin No. 97/1

(‘‘CEP Profit Policy Bulletin’’)) is

incorrect because the CEP profit

calculation does not reflect actual profit

or loss for actual market prices.

Respondents maintain that section

772(f)(2)(D) of the Act states that ‘‘actual

profit’’ represents the profit earned on

all sales for which expenses were

‘‘determined’’ under section

772(f)(2)(C), and section 772(f)(2)(C)

states that total expenses are all

expenses incurred with respect to the

subject merchandise sold in the United

States and the foreign like product sold

in the home market if requested by the

Department in order to determine

normal value and constructed export

price. Thus, because the Department
30188 Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices

requested that respondents report all

home market sales, and the Act states

that the calculation of total actual profit

and total expenses are made on the

same basis, profits associated with nonarm’s length sales must be included in

determining actual profit.

Respondents argue that excluding

non-arm’s length home market sales

from the calculation of CEP profit

distorts the calculation of total actual

profit and is inconsistent with the

statute and the SAA. Although the

Department includes unprofitable sales

to an unaffiliated party in determining

CEP profit—even if the sales are not in

the ordinary course of trade—

respondents contend that the

Department has no justification for

excluding sales with an affiliated party

(including profitable sales) only because

these sales do not pass the Department’s

arm’s length test. Therefore,

respondents argue that the Department

should base its calculation of CEP profit

on all home market sales, including

sales found not to be made at arm’s

length.

Petitioners state that the Department

should continue to exclude non-arm’s

length home market sales from its CEP

profit calculation. Petitioners argue that

the Department has carefully analyzed

this issue in the past and has concluded

that it would not be proper to consider

the profit (or lack thereof) on non-arm’s

length sales when attempting to

calculate total actual profit on CEP

sales. Petitioners state that the

Department provided several reasons for

its decision in its ‘‘CEP Profit Policy

Bulletin.’’

Petitioners state that the Department

properly recognized that non-arm’s

length sales do not provide an

indication of the actual profits

associated with these sales. Thus,

petitioners argue that relying on nonarm’s length transfer prices affords

respondents a chance to manipulate the

profit calculations by shifting profit to

downstream sales by affiliated

customers. In order to avoid this

manipulation, petitioners contend that

the Department must exclude sales that

are not at arm’s-length prices from its

calculation of CEP profit.

Furthermore, petitioners assert that

the Department’s policy of excluding

sales that are not at arm’s length from

its calculation of CEP profit is consistent

with the Act because it requires the

calculation of total actual profit.

Consequently, since the Act recognizes

that non-arm’s length sales are not

reliable indicators of normal value or

input costs, then they also are not

reliable for calculating actual profit.

Department’s Position: We agree with

petitioners. As we stated in our CEP

Profit Policy Bulletin, ‘‘sales to affiliates

made at non-arm’s length prices . . . are

excluded from the CEP profit

calculation because they do not reflect

actual market prices and, thus, do not

represent actual profit (or loss).’’

Further, the Department stated that

‘‘non-arm’s length sales are not a

reliable indicator of ‘actual profit,’ just

as they are not treated as a reliable

indicator of normal value or input

costs.’’ See sections 773(a)(5) and 773(f)

of the Act. Moreover, the Department’s

Bulletin states that ‘‘inclusion of nonarm’s length sales would

inappropriately distort the calculation

of total actual profit. Therefore, we

include below-cost sales but exclude

non-arm’s length sales for purposes of

computing sales revenues and expenses

for CEP profit.’’

Comment 4: Petitioners argue that the

Department made a fundamental legal

error in determining a CEP offset was

appropriate by identifying the level of

trade of CEP sales on an adjusted basis

while identifying the level of trade of

home market sales on an unadjusted

basis. Petitioners argue that the

comparison is inaccurate and leads to

the wrong conclusion that CEP sales

were at a different and less advanced

level of trade than the home market

sales. Petitioners argue that if the

Department were to look at the levels of

trade for sales in the U.S. and home

market on the same basis, and rely on

the unadjusted starting price for both

sales as the proper levels of trade, the

Department would conclude that the

U.S. and home market levels of trade are

the same and that a CEP offset would

not be necessary.

Petitioners contend that the

Department’s position that the CEP level

of trade is an adjusted price but the

normal value level of trade is linked to

the starting price is not supported by the

statute. Section 772(b) of the Act states

that CEP is ‘‘the price the subject

merchandise is first sold . . . to a

purchaser not affiliated with the

producer or exporter, as adjusted under

subsections (c) and (d). Therefore,

petitioners contend that the starting

price for a CEP sales comparison is the

price at which the product is sold to an

unaffiliated purchaser. Additionally,

petitioners assert that the statute defines

normal value as the price at which the

foreign like product is first sold, under

a variety of terms and conditions which

provide for the price to be adjusted. See

sections 773(a)(1)(A) and 773(a)(1)(B).

Moreover, petitioners contend that

section 773(a)(6)(C)(iii) of the Act

requires that normal value be adjusted

for ‘‘other differences in the

circumstances of sale,’’ between the CEP

and normal value sale, which includes

adjustments for the same types of

expenses deducted from CEP.

Accordingly, petitioners argue that it

is not accurate for the Department to

determine that CEP is a price that is

exclusive of all selling expenses, since

these expenses are required to be

adjusted for pursuant to section 772(d)

of the Act, but to describe normal value

as a price that is inclusive of all selling

functions and ignore the adjustments to

normal value that are statutorily

mandated by section 773(a)(6) of the

Act. The Department must consider

levels of trade in the same manner in

order to arrive at a fair comparison.

Furthermore, petitioners contend that

Congress intended for the Department to

look at the sale to an unaffiliated

purchaser, when examining CEP sales.

See section 772(b) of the Act. Petitioners

argue that a CEP transaction is between

the foreign producer/U.S. affiliate, and

the unaffiliated U.S. producer.

Petitioners argue that the Department

has ignored these transactions and has

incorrectly focused on the adjusted CEP

sale. Consequently, they argue the

Department is examining a level of trade

between a foreign producer and U.S.

affiliate that is artificial.

Respondents argue that the

Department properly examined the CEP

level of trade based on the price after

adjustments under section 772(d) of the

Act. Respondents argue that in the

preliminary results, the Department

properly determined that its CEP sales

to MAC (i.e., its U.S. super-distributor),

were made at a different level of trade

than home market sales (which were

made to end-users).

Respondents maintain that petitioners

argument is the identical argument from

the first and second administrative

reviews in which the Department

granted a CEP offset. In fact, the

argument also has been considered and

rejected by the Department, in other

administrative proceedings and in its

final regulations. See Antidumping

Duties; Countervailing Duties; Final

Rule, 62 FR 27296, 27414 (May 19,

1997); and Notice of Final

Determination of Sales at Less Than

Fair Value: Static Random Access

Memory Semiconductors from Taiwan,

63 FR 8909, 8919–8120 (February 23,

1998), Notice of Final Determination of

Sales at Less Than Fair Value: Large

Newspaper Printing Presses and

Components Thereof, Whether

Assembled or Unassembled from Japan,

61 FR 38139, 38143 (July 23, 1996).

Respondents maintain that the

Department’s position is clear with
Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices 30189

1This approach was recently criticized by the

Court of International Trade in Borden, Inc. v.

United States, Slip Op. 98–36 (March 26, 1998), at

55–59 (Borden) (rejecting the Department’s practice

of adjusting the CEP starting price pursuant to

section 772(d) of the Act prior to making the level

of trade comparisons). The Department intends to

appeal this decision and, thus, will continue to

apply the methodology articulated in its new

regulations (19 C.F.R. § 351.412).

regard to identifying the level of trade

of CEP sales. The Department has stated

‘‘in those cases where a level of trade

comparison is warranted and possible,

then for CEP sales the level of trade will

be evaluated based on the price after

adjustments are made under section

772(d) of the Act . . . In every case

decided under the revised antidumping

statute, the Department has consistently

adhered to this interpretation of the

SAA and of the Act.’’ See Final Results

of Antidumping Duty Administrative

Review, Dynamic Random Access

Memory Semiconductors of One

Megabit or Above from the Republic of

Korea; 62 FR 965, 966 (January 7, 1997).

Therefore, respondents argue that the

Department should continue its past

practice of beginning its level of trade

analysis for CEP sales after adjusting for

U.S. selling expenses and profit, as

required by the SAA and the statute. See

SAA at 159, and section 772(d) of the

Act.

Department’s Position: We disagree

with petitioners. The Department is

continuing its practice, articulated in

section 351.412(c) of the new

regulations (see 62 FR 27296, 27414), of

making the level of trade comparisons

for CEP sales on the basis of the CEP

after adjustments provided for in section

772(d) of the statute.

As we stated in the second

administrative review (see Certain

Stainless Steel Wire Rods from France:

Final Results of Antidumping Duty

Administrative Review, 62 FR 7206

(February 18, 1997) (‘‘SSWR II’’)) the

starting price is not the basis for

comparison for CEP sales. The

comparison is based on the CEP, which

is net of the CEP deductions (i.e., those

deductions provided for in section

772(d) of the Act which are only

applicable to CEP sales). The statute

requires the Department to make

comparisons between NV and EP or CEP

to the extent practicable, at the same

level of trade. See section 773(a)(1)(B) of

the Act. If the starting price is used to

determine the level of trade for CEP

sales, the Department’s ability to make

meaningful comparisons at the same

level of trade (or appropriate

adjustments for differences in levels of

trade) would be severely undermined in

cases involving CEP sales. Similarly,

using the unadjusted price to determine

the level of trade of both EP and CEP

sales would result in a finding of

different levels of trade for an EP and a

CEP sale when, after adjustment, the

selling prices reflect the same selling

functions. Moreover, using the adjusted

CEP for establishing the level of trade is

consistent with the purposes of the CEP

adjustment; to determine what the sales

price would have been had the

transaction between the producer and

its U.S. affiliate qualified as an export

price sale. Accordingly, we have

followed our practice from the previous

administrative review, which specifies

that the level of trade analyzed for EP

sales is that of the unadjusted price, and

for CEP sales it is the level of trade of

the price after the deduction of U.S.

selling expenses and profit associated

with economic activity in the United

States pursuant to section 772(d) of the

Act. Therefore, for the final results, the

Department has continued to apply the

level-of-trade analysis from its

preliminary results in this review.1

Comment 5: Petitioners argue that

there are no differences in selling

functions between the U.S. and home

market sales. Consequently, even if the

Department relies on an adjusted CEP to

identify the U.S. level of trade,

respondents are not entitled to a CEP

offset. Petitioners maintain that the

channels of distribution and the selling

activities for home market sales made

during the POR are comparable to the

adjusted CEP sales.

Petitioners note that they informed

the Department that sales in the home

market were predominantly through a

different channel of distribution and

involved fewer selling functions than

the Department had examined in past

reviews. In prior reviews, petitioners

stated that respondents’ sales were

primarily through Ugine Service (i.e.,

channel 2) and involved an extra layer

of selling expenses when compared to

direct home market sales (i.e., channel

1) or CEP sales, and it was the Ugine

Service sales that respondents focused

on to distinguish the level of trade of the

CEP and the home market sales.

Petitioners assert that they ran a test

on the data which showed that sales

through Ugine Service are not

predominate in terms of home market

sales for comparison. Petitioners noted

that respondents identify selling

functions associated with channel 1

home market sales but not with CEP

sales, such as, customer sales contacts,

technical services and administrative

functions. Nevertheless, petitioners

contend that the record demonstrates

that the selling functions and expenses

associated with sales to both home

market channel 1 and the CEP sales, on

an adjusted basis, are the same.

Petitioners maintain that the indirect

selling expenses and their magnitude

are the same for both home market sales

through channel 1 and CEP sales. Thus,

petitioners argue there can be no

difference between the levels of trade

for home market channel 1 and CEP

sales based on the intensity or nature of

the expenses for both home market

channel 1 and U.S. CEP sales, citing

Professional Electric Cutting Tools from

Japan: Final Results of Antidumping

Duty Administrative Review, 63 FR

6891, 6895 (February 11, 1998).

Moreover, petitioners note that the

Department did not deduct indirect

selling expenses in calculating the

adjusted CEP price. Thus, petitioners

argue that the selling functions must

still be considered as selling functions

associated with the CEP sale in the level

of trade analysis. Petitioners contend

that the indirect selling activities and

expenses incurred by respondents (i.e.,

MAC and Techalloy) in the U.S. do not

replace the selling activities and

expenses incurred in the home market,

but provide an extra layer of functions

and expenses in the U.S. market.

Petitioners argue that the only

difference in selling functions between

the home market and the CEP sales is

the indirect selling expenses associated

with sales through channel 2 (Ugine

Service). Petitioners maintain that these

additional selling expenses cannot

justify finding different levels of trade

because the Department found that

these additional selling expenses do not

support a finding of different home

market levels of trade between channel

1 and channel 2 sales. Therefore,

petitioners argue that the record does

not establish any differences in selling

functions between channel 1 home

market sales and CEP sales, and there

are insufficient differences in selling

functions between channel 2 sales and

CEP sales to justify different levels of

trade.

Respondents argue that they had

different and fewer selling functions

which were performed for the CEP sales

than for home market sales to end-users,

which are at a more advanced stage of

distribution than the CEP sales.

Therefore, respondents argue that

pursuant to section 773(a)(7)(B) of the

Act, the Department was correct in

granting a CEP offset.

Respondents state that petitioners

mischaracterize the Department’s

analysis of a CEP offset. Respondents

assert that in the first and second

administrative reviews of this case, the

Department examined and compared

the selling functions performed by

Imphy and Ugine-Savoie for sales to its
30190 Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices

U.S. affiliate (i.e., MAC), and found the

selling expenses in the home market to

end-users were different than selling

expenses in sales to MAC and involved

different levels of trade. See Preliminary

Results of Antidumping Administrative

Review: Certain Stainless Steel Wire

Rods from France, 61 FR 53199, 53201–

53202 (September 11, 1996)(‘‘SSWR I’’).

Specifically, the Department found that

the record reflected that customer sales

contacts, technical services, inventory

maintenance, computer systems and

other administrative functions were

selling functions involved in home

market sales to end-users and not in

sales to MAC. The Department found

these differences demonstrate a

difference in level of trade. Respondents

argue that the exact same selling

functions exist in this review and more

differences are apparent when the

totality of selling functions are

analyzed. Respondents assert that

Imphy and Ugine-Savoie perform

certain selling functions in the home

market for direct sales, (e.g., suggesting

product improvements, developing sales

strategy, providing information on

market potential and competitors,

pricing, scheduling production and

delivery, visiting customers/potential

customers and receiving orders,

promoting new products, etc.) but only

to a limited extent or not at all, for CEP

sales.

Respondents assert that petitioners’

argument that respondents’ home

market sales involved the same selling

functions as CEP sales is the exact same

argument from the first administrative

review. Respondents argue that, in this

administrative review, they have more

responsibility for generating,

administering and servicing sales to

end-users in the home market than for

U.S. sales to MAC. According to

respondents, MAC’s role as a superdistributor is to remove and assume

virtually all of the risks and selling

functions involved in selling to the U.S.

market. Thus, these differences in

selling functions support the

Department’s determination of two

different levels of trade.

Respondents argue that petitioners’

allegation that there is no difference in

indirect selling expenses incurred by

Imphy and Ugine-Savoie between home

market channel 1 and CEP sales is a

false allegation. Respondents state that

they allocated their headquarters

indirect selling expenses based on

worldwide net sales revenue for the

purpose of this administrative review,

because respondents do not separately

book selling expenses by market.

Additionally, headquarters indirect

selling expenses are difficult to separate

by market. Any separation of these

expenses could produce rough and

potentially unverifiable estimates.

Payroll expense is the predominant

expense which is difficult to separate by

market since many of the same

headquarters personnel support sales to

various markets. Nevertheless,

respondents contend that this allocation

does not negate the differences in the

selling functions for sales to home

market end-users, compared to sales to

MAC. Respondents maintain that in

responding to the Department’s

questionnaire, they tried to avoid

obtaining any advantage through their

headquarters selling expenses, and

should not be penalized for the

documented and verified differences in

selling functions between the two

markets.

Moreover, respondents argue that

petitioners’ argument that direct sales

predominate in the home market is

inaccurate because their analysis

examined raw information, not what

was actually used in the margin

calculation. Analysis of the preliminary

results shows that sales through Ugine

Service predominated in the

comparisons, particularly in

comparisons to CEP. Respondents assert

that this is important, because the

Department calculates CV using home

market selling expenses to derive a

weighted average expense factor to add

to the cost of manufacture, citing

Department of Commerce, Import

Administration Policy Bulletin,

‘‘Treatment of adjustments and selling

expenses in calculating the cost of

production (COP) and constructed value

(CV)’’ (March 25, 1994). Respondents

note that the selling expense factor

included selling expenses attributable to

sales through Ugine Service, which

were greater than the selling expenses

involved in direct sales. Lastly,

respondents state that more than half of

the CEP sales were compared to prices

or CV reflecting the selling expenses of

Ugine Service. Therefore, respondents

argue that they are entitled to a CEP

offset for comparisons to home market

sales to end-users because the home

market sales involve a different and

more advanced level of distribution

than sales to MAC and petitioners have

not provided any evidence to reverse

the level of trade analysis.

Department’s Position: We disagree

with petitioners. We reviewed

respondents’ selling functions and

activities, and found that no single

selling function was sufficient to

warrant a separate level of trade in the

home market. Specifically, we analyzed

the respondents’ level of trade chart for

the home market and found that only

three selling functions differed between

the two home market channels of trade

(visiting customers/receiving orders,

promoting new products, and contacting

customers/preparing claim reports).

Additionally, we found that the vast

majority of the selling functions were

either identical or only differed

moderately in intensity (i.e., order

evaluation for production of specific

products, analyzing and paying

warranty claims, pre-sale inventory,

packing, post-sale warehousing,

suggesting potential product

improvements, developing sales

strategy, providing information on

market potential and competitors,

pricing, scheduling production and

delivery, follow-up on unpaid invoices,

technical advice regarding use, general

administrative support including

personnel, advertising, computer

systems and arranging freight and

delivery). Therefore, we have

determined that the selling functions

reported for the home market channels

of distribution are not different enough

to warrant two levels of trade in the

home market.

To determine whether separate levels

of trade exist between the U.S. market

and home market, we examined the

respondents’ level of trade claims. In

order to make this determination, we

reviewed the selling activities

associated with each channel of

distribution. The Department compared

EP sales to home market sales, and

determined that sales were made at the

same LOT (i.e., to end-users) in both

markets. See May 7, 1997,

Questionnaire Response, Exhibit 11.

For CEP sales, consistent with our

practice, discussed above in Comment

4, we consider only the selling activities

reflected in the constructed price, i.e.,

after the expenses and profit are

deducted under section 772(d) of the

Act. Whenever sales are made by or

through an affiliated company or agent

in CEP situations, we consider all

selling activities of both affiliated

parties, except for those selling

activities related to the expenses

deducted under section 772(d) of the

Act to determine the CEP level of trade.

The record indicates that the

following selling functions were

performed for HM sales to end users (at

varying levels of intensity) but are not

reflected in CEP: developing sales

strategy, providing information on

market potential and competitors, order

evaluation for pricing and production

scheduling, promoting new products,

following-up on unpaid invoices,

providing technical services, and

performing administrative functions.
Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices 30191

See May 7, 1997, Questionnaire

Response, Exhibit 11.

The differences between the CEP level

of trade and the home market level of

trade are sufficient to constitute

different levels of trade. We found that

the data on the record did not allow the

Department to determine whether the

differences in levels of trade affect price

comparability. Since there is only one

home market level of trade which has

no equivalent to the CEP level of trade,

price differences between the relevant

levels of trade can not be quantified.

Further, the Department has determined

that home market sales involved a more

advanced stage of distribution (to endusers) as compared to respondents’ CEP

sales in the United States (MAC and

Techalloy).

Section 773(a)(7)(B) of the Act states

that a CEP ‘‘offset’’ may be made when

two conditions exist: (1) normal value is

established at a level of trade which

constitutes a more advanced stage of

distribution than the level of trade of the

CEP; and (2) the data available do not

provide an appropriate basis for a levelof-trade adjustment.

The Department has considered

petitioners’ argument that there is no

difference between the home market

channel 1 and CEP sales with regard to

indirect selling expenses and we do not

find it persuasive. Record evidence

indicates that there are differences in

selling activities between home market

sales to end users and CEP sales.

Notwithstanding these different

activities, the indirect selling expenses

reported by Imphy and Ugine-Savoie are

the same for home market channel 1 and

CEP. This does not mean, however, that

the selling activities are the same for

these two groups of sales. The amount

of selling expenses in itself is not a

dispositive indicator of whether

different levels of trade exist. In this

case, there clearly are sufficient

differences in selling activities despite

similar amounts of expenses.

Comment 6: Petitioners argue that in

calculating CEP, the Department failed

to deduct all selling expenses incurred

in selling the subject merchandise to the

United States. Petitioners assert that the

Department did not deduct certain

selling expenses (i.e., indirect selling

expenses and inventory carrying costs)

that were incurred with respect to U.S.

sales.

Petitioners argue that section

772(d)(1) of the Act states that the

Department is required to deduct all

direct and indirect selling expenses

‘‘incurred by or for the account of the

producer or exporter, or the affiliated

seller in the United States, in selling the

subject merchandise.’’ Additionally,

petitioners maintain that the SAA states

that indirect selling expenses are to be

deducted from CEP, citing SAA at 824.

Also, petitioners maintain that the

Department should read the SAA, at

page 823, to mean that it should deduct

indirect selling expenses incurred by

the producer with respect to U.S. sales

of subject merchandise in the home

market or expenses incurred in selling

to its affiliated U.S. importer.

Lastly, petitioners argue that the Court

of International Trade upheld the

Department’s past practice of deducting

indirect selling expenses incurred in the

home market or in selling to an

affiliated importer in the calculation of

exporter’s sales price (ESP), the

predecessor to CEP. See Silver Reed

America, Inc. v. United States, 683 F.

Supp. 1393 (1988). Also, petitioners

note that the URAA did not

substantively amend the CEP provision

to alter the deductions from CEP as

compared to ESP. In fact, petitioners

argue the URAA was more explicit than

the prior statute in requiring all selling

expenses be deducted from CEP, citing

section 772(d)(1) of the Act.

Respondents argue that petitioners

made the same allegations in the first

and second administrative reviews of

this proceeding and the Department has

rejected the argument in both instances.

Further, respondents contend that these

expenses were not incurred with respect

to U.S. sales.

Respondents assert that in the first

and second administrative reviews, the

Department did not deduct indirect

selling expenses incurred in France or

inventory carrying costs imputed to the

country of manufacture in determining

CEP, and there is no new information in

this review to cause the Department to

reconsider its decision. Respondents

argue that the Department decided this

exact issue in the second administrative

review, wherein the Department stated

that section 772(d)(1) of the Act

provided for the deduction of specified

expenses incurred in selling in the

United States; it did not provide for the

deduction of indirect expenses incurred

in the home market. See SSWR II, 62 FR

at 7210. Therefore, respondents contend

that pursuant to section 772(d)(1) of the

Act, home market expenses are not

properly deducted from the starting

price in determining CEP and they do

not represent expenses associated with

economic activities occurring in the

United States. See SAA at 153.

Moreover, respondents assert that the

Department’s approach is consistent

with its past practice and with section

351.402(b) of its new regulations. See

Preliminary Results of Antidumping

Administrative Review: Calcium

Aluminate Flux from France, 61 FR

40396, 40397 (August 2, 1996).

Respondents note that section

351.402(b) indicates that the Secretary

will deduct only expenses associated

with a sale to an unaffiliated customer

in the United States. Hence, the indirect

expenses reported in the DINDIRSU

field are expenses associated with

selling to MAC, Imphy and UgineSavoie’s affiliated reseller in the U.S.,

and are not deducted in the calculation

of CEP. Additionally, respondents assert

that home market inventory carrying

costs for sales to the U.S. reported in the

DINVCARU field are imputed inventory

carrying costs related to selling to MAC.

Respondents argue that deducting these

expenses would be inconsistent with

the statute. Finally, respondents argue

that petitioners’ citation to Silver Reed

is not appropriate because, as the

Department previously has found,

‘‘cases addressing pre-URAA practice

are not applicable.’’ See SSWR I, 61 FR

at 47882. Therefore, respondents argue

that the Department should reject

petitioners’ arguments and not deduct

these expenses in calculating CEP.

Department’s Position: We disagree

with petitioners. As we stated in the

final results of the first and second

administrative review of this order (see

SSWR I, 61 FR at 47874; SSWR II, 62 FR

at 7206), the Department does not

deduct indirect expenses incurred in

selling to the affiliated U.S. importer

under section 772(d) of the Act. Section

772(d) of the Act is intended to provide

for the deduction of expenses associated

with economic activities occurring in

the United States. See SAA at 823; see

also, GATT 1994 Antidumping

Agreement, article 2.4; see also, Final

Results of Antidumping Duty

Administrative Review; Certain ColdRolled Carbon Steel Flat Products from

the Netherlands: 63 FR 13204, 13212

(March 18, 1998).

The Department’s practice regarding

deductions from CEP under section

772(d) of the Act is articulated in its

new regulations. Section 351.402(b) of

these regulations state that ‘‘the

Secretary will make adjustments for

expenses associated with commercial

activities in the United States that relate

to the sale to an unaffiliated purchaser,

no matter where or when paid.’’ 62 FR

27296, 27411. Additionally, the

Department’s regulations state that ‘‘the

Secretary will not make an adjustment

for any expense that is related solely to

the sale to an affiliated importer in the

United States.’’ Id. The inventory

carrying costs petitioners refer to are

expenses related solely to the sale to the

affiliated importer (i.e., MAC).

Similarly, the indirect selling expenses
30192 Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices

incurred in the home market do not

represent expenses associated with

economic activities in the United States.

Therefore, for the final results, the

Department has not deducted the

indirect selling expenses and inventory

carrying costs referred to by petitioners

in its calculation of CEP.

Comment 7: Petitioners argue that if

the Department does not deduct certain

selling expenses (i.e., indirect selling

expenses and inventory carrying costs)

from the CEP calculation, it may not

deduct the same expenses from normal

value through the CEP offset. Petitioners

assert that the CEP offset is used to

balance deductions for selling expenses

made to CEP where there are different

levels of trade. Petitioners maintain that

certain indirect selling activities

undertaken by Imphy and Ugine-Savoie

in connection with their home market

sales and CEP sales are the same. See

Comment 5 above. Petitioners contend

that because Department did not deduct

indirect selling expenses and inventory

carrying costs in the calculation of CEP,

they should not be deducted from

normal value as part of the CEP offset.

Respondents argue that the

Department’s calculation of the CEP

offset in the preliminary results is in

accordance with the Act. Further,

respondents contend that the CEP offset

can include indirect selling expenses

and inventory carrying costs incurred in

the home market even if those expenses

are not deducted from CEP.

Respondents assert that there is no

statutory or other basis to consider

whether a particular home market

indirect expense is also incurred with

CEP sales. Moreover, respondents cite to

section 773(a)(7)(B) of the Act and argue

that the test is whether the home market

indirect expenses are incurred on sales

in the home market. On that basis, all

of the indirect expenses incurred in the

home market (i.e., indirect selling

expenses for Imphy’s and UgineSavoie’s commercial departments

(INDIRS1H), product liability premiums

(PRLBPRMH), and inventory carrying

costs (INVCARH)) should be taken into

account in calculating the CEP offset for

all home market sales. Additionally,

respondents argue that the indirect

selling expenses for Ugine Service

(INDIRS2H) should be considered in

calculating the CEP offset.

Department’s Position: We agree with

the respondents. Section 773(a)(7)(B) of

the Act states that when the constructed

export price offset is applicable,

‘‘normal value shall be reduced by the

amount of indirect selling expenses

incurred in the country in which normal

value is determined on sales of the

foreign like product but not more than

the amount of such expenses for which

a deduction is made under section

772(d)(1)(D).’’ Accordingly, the statute

directs the Department to make

deductions for the CEP offset for home

market indirect expense(s) incurred on

sales in the home market. The statue

does not require that the indirect selling

expenses deducted from normal value

be identical or comparable in nature to

the direct or indirect selling expenses

deducted from CEP.

Section 351.412(f)(2) of the

Department’s new regulations similarly

reflect the Department’s practice that

the amount of the CEP offset ‘‘will be

the amount of indirect selling expenses

included in normal value, up to the

amount of indirect selling expenses

deducted and determining constructed

export price.’’ 62 FR 27296, 27415. This

regulation goes on to define indirect

selling expenses as ‘‘selling expenses

* * * that the seller would incur

regardless of whether particular sales

were made, but that reasonably may be

attributed, in whole or in part, to such

sales.’’ Id. These regulations are

consistent with the Department’s

practice that the CEP offset is composed

of home market indirect selling

expenses and there is no requirement

that the same or comparable types of

expenses be deducted from CEP in order

for the expenses to be included in the

CEP offset. For these reasons, the

Department has deducted all of the

indirect expenses incurred in the home

market in calculating the CEP offset for

home market sales matched to CEP

transactions.

Comment 8: Petitioners argue that the

Department should deny respondents’

adjustment for negative billing

adjustments for certain home market

sales. Petitioners contend that

respondents have failed to correct

double-counting errors with regard to

these billing adjustments and warranty

costs in their revised questionnaire

response, and to prove that billing

adjustments were due to billing errors or

link the billing adjustments to billing

errors.

Petitioners note that respondents

stated in their July 28, 1997

supplemental questionnaire response,

that ‘‘[f]or certain sales, Ugine-Savoie

erroneously reported the associated

warranty claim as a billing adjustment.’’

Also, petitioners note that the

questionnaire response indicated that

‘‘on the revised HM Sales File submitted

with this response, the billing

adjustment has been removed for these

sales, as the claim was included within

warranty expense.’’ See July 28, 1997

Supplemental Questionnaire Response

at page 12. Thus, petitioners note that

respondents acknowledged that certain

warranty expenses were double-counted

in their original response because

certain billing expense adjustments

were also reported as warranty

expenses, and the billing adjustments

were made to invoice prices

(BILLADPH), not quantities

(BILLADQH). Therefore, petitioners

contend that respondents should have

made corrections to the BILLADPH

computer field. However, petitioners

assert that respondents did not correct

the double-counting error in their

amended home market sales listing. See

Petitioners’ letter of December 4, 1997.

Petitioners note that respondents

stated the double-counting error was

corrected in the amended home market

sales listing because the double-counted

amounts were removed from the

BILLADQH field. See Respondents’

letter of December 15, 1997 at pages 8–

10. However, petitioners argue that the

amounts reported under BILLADQH

related to quantity adjustments for

warranty claims, not the prices.

Petitioners assert that removing the

quantity amounts cannot correct the

error of double-counting warranty

expenses because the amounts

associated with warranty claims are still

reported in the invoice prices (i.e.,

BILLADPH) and warranty expenses.

Therefore, petitioners argue the

Department should deny respondents’

claimed negative billing adjustments

because they failed to correct the

double-counting of billing adjustments

and warranty expenses and did not

provide the Department the information

needed to correct the errors.

Petitioners also argue that

respondents have failed to demonstrate

that the claimed billing adjustments

were due to billing errors. Petitioners

have identified examples of where

billing adjustments took place for some

sales but not others of the same product

made on the same day.

Respondents argue that petitioners

wrongly asserted that respondents failed

to correct the double-counting of

reported warranty expense in its revised

sales listing (i.e., July 28, 1997

supplemental questionnaire response)

and failed to substantiate that the

reported billing adjustments were due to

billing errors or to link the billing

adjustments to the billing errors.

Respondents state that petitioners are

confusing invoice revenue and invoice

unit price. Respondents note, as stated

in their December 15, 1997 letter to the

Department, that billing revisions

relating to warranty expense items

involved adjustments to quantity

(BILLADQH), rather than price

(BILLADPH), and affected the QTYH
Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices 30193

and BILLADQU fields. Respondents

stated that they corrected errors in their

billing adjustments and warranty

expenses in their July 28, 1997

supplemental response. To correct the

errors, respondents made corrections to

their BILLADQH and QTYH fields to

correct the errors. The warranty field

was not revised.

Respondents contend that petitioners

have not commented on or

acknowledged their calculation example

in their December 15, 1997 letter which

illustrated the correction of the doublecounting. In reply to petitioners’

identification of eight observations

(which are four pairs of transactions)

that further question respondents’

billing adjustments, respondents state

that for two pairs of the transactions,

Imphy should have reported billing

adjustments in the BILLADPH field, and

that Imphy had a computer

programming error that caused the

omission of the billing adjustments from

these sales. Additionally, respondents

explain that this mistake was due to

credit memos against certain invoice

numbers resulting from calculating

invoice price on the original invoices.

Nevertheless, respondents argue that

all of the other records alleged to be

errors by petitioners are reported

correctly. Respondents stated that for

the other two pairs of observations that

petitioners alleged included errors in

billing adjustments to price,

respondents provided the following

explanations: one transaction reflected a

special price adjustment granted by

Ugine-Savoie, which the customer

requested to meet a specific market

condition, while the other transaction

was a price adjustment that the

customer requested. Therefore,

respondents assert that petitioners have

no basis to request the Department to

deny any of the billing adjustments

reported.

Department’s Position: We agree with

respondents. The Department has

examined the respondents’ home market

sales database, specifically the sales that

petitioners alleged were double-counted

with regard to billing adjustments and

warranty expenses, and found that the

billing adjustments had been revised

and correctly reported. In its analysis,

the Department examined respondents’

July 28, 1997 supplemental

questionnaire response, home market

sales database, and letter of December

15, 1997. From the information on the

record, we found that respondents had

eliminated the billing adjustment

quantity from the BILLADQH field

which respondents used to report credit

memos associated with warranty claims.

In addition, we found that they

subsequently revised the quantity

reported in the QTYH field, increasing

it by the amount that had been reported

in the BILLADQH field. Further, the

Department performed mathematical

calculations on the relevant home

market sales to ensure that respondents

had corrected the double-counting error.

We found that respondents had indeed

corrected their double-counting error,

and found that their explanation that

the double-counting error effected the

invoice revenue and not the invoice

price was consistent with the reported

data.

Additionally, the Department has

determined that respondents have

properly reported all of their billing

adjustments. We examined respondents’

December 15, 1997 letter and related

home market sales and found that the

alloy surcharge and billing adjustments

were reported correctly. Therefore, we

have determined that respondents have

properly reported all of their billing

adjustments with the exception of the

two invoices (fifteen home market sales

observations) that did not have

adjustments reported due to a computer

programming error. Respondents

reported these errors in their case briefs.

The information submitted regarding

the correction of these errors constituted

new factual information which was

untimely submitted. Petitioners did not

have an opportunity to comment on this

new factual information which was

submitted too late for consideration by

the Department. For these reasons, the

Department did not take this

information into account for these final

results.

Comment 9: Petitioners argue that the

Department incorrectly categorized

certain U.S. sales as sales that were

made outside the POR, and excluded

these sales from its model match

program. Petitioners state that the

Department’s computer program

indicates that even though the subject

merchandise of these sales entered the

U.S. prior to the POR, the sales were

made during the POR. Moreover, they

contend that the Department’s past

practice has been to examine CEP sales

during the POR, considering there is a

significant lag between entry date and

sale date for the CEP sales. See Gray

Portland Cement and Clinker from

Japan: Final Results of Antidumping

Duty Administrative Review, 58 FR

48826 (1993).

The respondents did not comment on

this argument.

Department’s Position: We agree with

the petitioners. The Department

incorrectly categorized certain U.S. sales

as sales that were made outside the

POR, and excluded these sales from its

model match program. Therefore, for the

final results, the Department has

corrected its computer program to

include these sales.

Comment 10: Respondents argue that

the Department incorrectly recalculated

its reported home market credit

expenses for sales with missing

payment and shipment dates. In the

preliminary results, respondents note

that the Department stated that it

intended to calculate the missing

payment or shipment date based on the

average time period between invoice

date and payment or shipment date,

respectively. Respondents argue,

however, that the Department

committed two programming errors in

this recalculation. Therefore,

respondents stated that the Department

should correct its errors and provided

programming language to fix the alleged

errors.

The petitioners did not comment on

this argument.

Department’s Position: We agree with

respondents and have corrected the

home market credit expense calculation

for sales with missing payment and

shipment dates for the final results.

Comment 11: Respondents argue that

the Department did not include indirect

selling expenses related to EP sales in

the total expenses used to calculate CEP

profit pursuant to section 772(d)(3) of

the Act, because the Department set

indirect selling expenses for EP sales to

zero before calculating the CEP profit

rate. Respondents maintain that the

Department requested indirect selling

expenses related to both EP and CEP

sales, and the Department’s recent

policy bulletin on the calculation of CEP

profit states that the calculation of total

actual profit under section 772(f)(2)(D)

includes all revenues and expenses from

EP sales. Thus, indirect expenses related

to EP sales should have been included

in the expenses used to calculate CEP

profit.

The petitioners’ did not comment on

this argument.

Department’s Position: We agree with

the respondents in part. We agree that

the calculation of total actual profit

under section 772(f)(2)(D) of the statute

includes all revenues and expenses

resulting from the respondent’s U.S.

sales and home market sales. See Final

Results of Antidumping Duty

Administrative Review; Certain ColdRolled Carbon Steel Flat Products from

the Netherlands; 63 FR 13204, 13211

(March 18, 1998). The Department,

however, has not adopted the computer

programming changes suggested by

respondents. Instead, in the final margin

program, the Department changed the

definition of a variable (INDEXUS) to be
30194 Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices

the sum of indirect selling expenses and

inventory carrying costs incurred in the

United States, and deleted another

variable (INDEXPU) from the final

margin program. For a complete listing

of the changes the Department has made

to its final margin program, please see

the Department’s analysis memorandum

and final margin computer program.

Comment 12: Respondents argue that

the Department did not calculate CV

profit consistent with its determination

of the CV profit rate. Respondents assert

that the Department calculated the CV

profit rate as the ratio of total home

market profit on above-cost sales to the

sum of the total cost of manufacture,

G&A, net financial expense, and packing

expenses. However, the Department

applied the CV profit rate to a larger

base, in calculating the profit amount

used to calculate profit for CV.

Respondents maintain that the CV profit

rate should be applied to the same

expenses that were included in the

denominator used to calculate the CV

profit rate. Therefore, respondents state

that the Department should correct its

program to exclude direct and indirect

selling expenses from the base to which

the CV profit ratio was applied.

The petitioners did not comment on

this argument.

Department’s Position: We agree with

respondents and have corrected this

error for the final results.

Final Results of Review

As a result of our review, we have

determined that the following margins

exist:

Manufacturer/

exporter Time period

Margin

(percent)

Imphy/UgineSavoie ........ 1/1/96—12/31/96 7.46

The Department shall determine, and

the Customs Service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

United States price and normal value

may vary from the percentages stated

above. The Department will issue

appraisement instructions directly to

the Customs Service. The final results of

this review shall be the basis for the

assessment of antidumping duties on

entries of merchandise covered by this

review. For duty assessment purposes,

we calculated an importer-specific

assessment rate by aggregating the

dumping margins calculated for all U.S.

sales to each importer and dividing this

amount by the total value of subject

merchandise entered during the POR for

each importer.

Furthermore, the following deposit

requirements will be effective upon

publication of this notice of final results

of review for all shipments of certain

stainless steel wire rods from France

entered, or withdrawn from warehouse,

for consumption on or after the

publication date, as provided for by

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

deposit rates for the reviewed

companies will be the rates for those

firms as stated above; (2) if the exporter

is not covered in this review, or the

original investigation, but the

manufacturer is, the cash deposit rate

will be the rate established for the most

recent period for the manufacturer of

the merchandise; and (3) the cash

deposit rate for all other manufacturers

or exporters will continue to be 24.51

percent for stainless steel wire rods, the

all others rate established in the LTFV

investigation. See Amended Final

Determination and Antidumping Duty

Order: Certain Stainless Steel Wire Rods

from France (59 FR 4022, January 28,

1994).

These deposit requirements, when

imposed, shall remain in effect until

publication of the final results of the

next administrative review.

This notice serves as a final reminder

to importers of their responsibility

under 19 CFR 353.26 to file a certificate

regarding the reimbursement of

antidumping duties prior to liquidation

or the relevant entries during this

review period. Failure to comply with

this requirement could result in the

Secretary’s presumption that

reimbursement of antidumping duties

occurred and the subsequent assessment

of double antidumping duties.

This notice also serves as the only

reminder to parties subject to

administrative protective order (APO) of

their responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with section 353.34(d) of the

Department’s regulations. Timely

notification of return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and the terms of an APO is a

sanctionable violation.

This administrative review and notice

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

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

CFR 353.33(c)(5).

Dated: May 26, 1998.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 98–14759 Filed 6–2–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

National Institute of Standards and

Technology

[Docket No. 970520119–7284–02]

RIN 0693–ZA15

Grant Funds—Materials Science and

Engineering Laboratory—Availability

of Funds

AGENCY: National Institute of Standards

and Technology, Commerce.

ACTION: Notice.

SUMMARY: The purpose of this notice is

to inform potential applicants that the

Materials Science and Engineering

Laboratory (MSEL), National Institute of

Standards and Technology (NIST), is

continuing its program for grants and

cooperative agreements in the following

fields of research: Ceramics, Metallurgy,

Polymer Sciences, Neutron Scattering

Research and Spectroscopy. Each

applicant must submit one signed

original and two copies of each proposal

along with a Grant Application,

(Standard Form 424 REV. 7/95 and

other required forms), as referenced

under the provisions of OMB Circular

A–110 and 15 CFR 24.

DATES: Applications must be received

no later than the close of business

September 30, 1998.

ADDRESSES: Applications should be

submitted to the National Institute of

Standards and Technology, Materials

Science and Engineering Laboratory,

Building 223, Room A305, Gaithersburg,

Maryland 20899–0001; Attention: Patty

Salpino. Each application package

should be clearly marked to identify the

field of research.

FOR FURTHER INFORMATION CONTACT:

Technical inquiries should be directed

to the following Program Managers: Dr.

Ronald Munro—(301) 975–6127

[Ceramics Division], Bruno Fanconi—

(301) 975–6762 [Polymers Division],

John Manning—(301) 975–6157

[Metallurgy Division—transformations,

phases, microstructure and kinetic

processes in metals and their alloys], Dr.

Neville Pugh—(301) 975–5960

[Metallurgy Division—sensors for

analytical models for metallurgical

processes], Richard Ricker—(301) 975–

6023 [Metallurgy Division—degradation

of materials in their service

environment], John Rush—(301) 976–

6220 [NIST Center for Neutron

Research]. Inquiries should be general

in nature.

Specific inquiries as to a laboratory’s

needs, the usefulness or merit of any

particular project, or other inquiries

with the potential to provide and