[Federal Register Volume 66, Number 86 (Thursday, May 3, 2001)]
[Notices]
[Pages 22168-22173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10850]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-834-806]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products From Kazakhstan

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

ACTION: Notice of preliminary determination in the less than fair value 
investigation of certain hot-rolled carbon steel flat products from 
Kazakhstan.

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SUMMARY: On December 12, 2000, the Department of Commerce published a 
notice of initiation of an antidumping duty investigation of certain 
hot-rolled carbon steel flat products from Kazakhstan. This 
investigation covers one producer of the subject

[[Page 22169]]

merchandise. The period of investigation is April 1, 2000 through 
September 30, 2000. The Department preliminarily determines that 
certain hot-rolled carbon steel flat products from Kazakhstan are 
being, or are likely to be, sold in the United States at less than fair 
value, as provided in section 733 of the Tariff Act of 1930, as 
amended.

EFFECTIVE DATE: May 3, 2001.

FOR FURTHER INFORMATION CONTACT: Juanita H. Chen at 202-482-0409, or 
Rick Johnson at 202-482-3818, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue, NW., Washington, DC 20230.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``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 the regulations codified at 19 CFR part 351 (2000).

Preliminary Determination

    The Department of Commerce (``Department'') preliminarily 
determines that certain hot-rolled carbon steel flat products (``hot-
rolled steel'') from Kazakhstan are being, or are likely to be, sold in 
the United States at less than fair value (``LTFV''), as provided in 
section 733 of the Act. The estimated margins of sales at LTFV are 
shown in the ``Suspension of Liquidation'' section of this notice, 
infra.

Case History

    On December 4, 2000, the Department initiated an antidumping duty 
investigation of hot-rolled steel from Kazakhstan. See Notice of 
Initiation of Antidumping Duty Investigations: Certain Hot-Rolled 
Carbon Steel Flat Products from Argentina, India, Indonesia, 
Kazakhstan, the Netherlands, the People's Republic of China, Romania, 
South Africa, Taiwan, Thailand, and Ukraine, 65 FR 77568 (December 12, 
2000) (``Notice of Initiation''). The Department set aside a period for 
all interested parties to raise issues regarding product coverage. See 
Notice of Initiation, at 77569. We received no comments from any 
parties in this investigation. The Department did, however, receive 
comments regarding product coverage in the investigation of hot-rolled 
steel from the Netherlands. In that investigation we received comments 
from Duracell Global Business Management Group on December 11, 2000, 
from Energizer on December 15, 2000, from Bouffard Metal Goods, Inc., 
and Truelove & Maclean, Inc., on December 18, 2000, from Corus Staal BV 
and Corus Steel U.S.A., Inc. (collectively ``Corus''), and Thomas Steel 
Strip on December 26, 2000, and from Rayovac Corporation on March 12, 
2001.
    On December 22, 2000, the Department issued a letter to interested 
parties in all of the concurrent hot-rolled steel investigations, 
providing an opportunity to comment on the Department's proposed model 
matching characteristics and hierarchy. Comments were submitted by: 
Bethlehem Steel Corporation, Gallatin Steel Company, IPSCO Steel Inc., 
LTV Steel Company, Inc., National Steel Corporation, Nucor Corporation, 
Steel Dynamics, Inc., U.S. Steel Group (a unit of USX Corporation), 
Weirton Steel Corporation, and the Independent Steelworkers Union 
(hereinafter collectively referred to as ``petitioners''); Corus, 
respondents in the Netherlands investigation; Iscor Limited 
(``Iscor''), respondent in the South Africa investigation; and 
Zaporizhstal, respondent in the Ukraine investigation. The petitioners 
agreed with the Department's proposed characteristics and hierarchy. 
Corus suggested adding a product characteristic to distinguish prime 
merchandise from non-prime merchandise. Neither Iscor nor Zaporizhstal 
proposed any changes to either the list of product characteristics or 
the hierarchy but, rather, provided information relating to its own 
products that was not relevant in the context of determining what 
information to include in the Department's questionnaires. For purposes 
of the questionnaires subsequently issued by the Department to the 
respondents, no changes were made to the product characteristics or 
hierarchy from those originally proposed by the Department in its 
December 22, 2000 letter. With respect to Corus' request, the 
additional product characteristic suggested by Corus, to distinguish 
prime merchandise from non-prime merchandise, is unnecessary. The 
Department already asks respondents to distinguish prime from non-prime 
merchandise in field number 2.2 ``Prime vs. Secondary Merchandise.'' 
See the Department's Antidumping Duty Questionnaire, at C-5 (January 4, 
2001).
    On December 29, 2000, the United States International Trade 
Commission (``ITC'') issued its affirmative preliminary determination 
that there is a reasonable indication that an industry in the United 
States was materially injured by reason of imports of the subject 
merchandise from Kazakhstan, which was published on January 4, 2001. 
See Hot-Rolled Steel Products from Argentina, China, India, Indonesia, 
Kazakhstan, Netherlands, Romania, South Africa, Taiwan, Thailand, and 
Ukraine, 66 FR 805 (January 4, 2001) (``ITC Preliminary 
Determination'').
    On January 4, 2001, the Department issued its antidumping duty 
questionnaire to the Embassy of Kazakhstan and to the only known 
producer of subject merchandise, OJSC Ispat Karmet (``Ispat Karmet''). 
The Department received confirmation from the U.S. Embassy in 
Kazakhstan that Ispat Karmet is the sole company in Kazakhstan that 
produces or exports hot-rolled carbon steel to the United States. On 
January 23, 2001, the Department requested comments from interested 
parties regarding surrogate country selection, and information to value 
factors of production. On February 6, 2001, we received the 
petitioners' comments for surrogate country selection. The Embassy of 
Kazakhstan and Ispat Karmet submitted no comments on surrogate country 
selection. On March 23 and April 6, 2001, we received comments from the 
petitioners regarding valuing factors of production. On April 18, 2001, 
we received comments from Ispat Karmet in opposition to some of the 
petitioners' suggested values for factors of production.
    On February 1, 2001, we received Ispat Karmet's Section A response 
to the Department's questionnaire (``Section A response''). On February 
14, March 12, and April 4, 2001, we issued Section A supplemental 
questions, Sections C and D supplemental questions, and Sections A, C 
and D second supplemental questions to Ispat Karmet, respectively. We 
received Ispat Karmet's Sections C and D response (``Section C/D 
response'') on February 26, 2001, its Section A supplemental response 
(``Supp. A response'') on March 7, 2001, its Sections C and D 
supplemental response (``Supp. C/D response'') on April 2, 2001, and 
its Sections A, C and D second supplemental response (``2d Supp. 
response'') on April 13, 2001.
    On March 16, 2001, certain petitioners (Bethlehem Steel 
Corporation, LTV Steel Company, Inc., National Steel Corporation, and 
U.S. Steel Group) (hereinafter collectively ``Bethlehem, et al. '') 
requested that the Department initiate a middleman dumping 
investigation. On March 30, 2001, Ispat Karmet submitted comments on 
the middleman dumping request,

[[Page 22170]]

arguing that the allegation is legally defective because Bethlehem et 
al. have not provided specific evidence that a trading company is 
dumping. On April 6, 2001, Bethlehem, et al. submitted a letter further 
asserting that they have demonstrated that a middleman dumping 
investigation is warranted, and that Ispat Karmet's opposition is 
baseless. On April 10, 2001, Ispat Karmet submitted a letter pointing 
out alleged flaws in the middleman dumping allegation. Because of the 
complexity of the issue, the Department has not yet determined the 
proper course of action on the middleman dumping allegation. 
Accordingly, we will address the middleman dumping issue in the final 
determination.
    On March 21, 2001, Ispat Karmet requested that the Department 
determine that the hot-rolled steel industry in Kazakhstan is a market-
oriented industry (``MOI''), and submitted basic information on the 
hot-rolled steel industry in Kazakhstan. On March 27, 2001, the 
petitioners submitted comments on Ispat Karmet's MOI request, arguing 
that Ispat Karmet failed to meet the conditions necessary for 
establishing MOI status. On March 30, 2001, the Department issued a 
supplemental questionnaire to Ispat Karmet, requesting further 
information on the hot-rolled steel industry in Kazakhstan. That 
additional information is due to be filed on April 30, 2001. 
Consequently, we do not yet have adequate information necessary to 
analyze the issue for the preliminary determination. As a result, we 
are unable to make a determination on Ispat Karmet's MOI request for 
this preliminary determination. We will address the MOI issue in the 
final determination.

Scope of Investigation

    For purposes of this investigation, the products covered are 
certain hot-rolled carbon steel flat products of a rectangular shape, 
of a width of 0.5 inch or greater, neither clad, plated, nor coated 
with metal and whether or not painted, varnished, or coated with 
plastics or other non-metallic substances, in coils (whether or not in 
successively superimposed layers), regardless of thickness, and in 
straight lengths of a thickness of less than 4.75 mm and of a width 
measuring at least 10 times the thickness. Universal mill plate (i.e., 
flat-rolled products rolled on four faces or in a closed box pass, of a 
width exceeding 150 mm, but not exceeding 1250 mm, and of a thickness 
of not less than 4.0 mm, not in coils and without patterns in relief) 
of a thickness not less than 4.0 mm is not included within the scope of 
these investigations.
    Specifically included within the scope of this investigation are 
vacuum degassed, fully stabilized (commonly referred to as 
interstitial-free (``IF'')) steels, high strength low alloy (``HSLA'') 
steels, and the substrate for motor lamination steels. IF steels are 
recognized as low carbon steels with micro-alloying levels of elements 
such as titanium or niobium (also commonly referred to as columbium), 
or both, added to stabilize carbon and nitrogen elements. HSLA steels 
are recognized as steels with micro-alloying levels of elements such as 
chromium, copper, niobium, vanadium, and molybdenum. The substrate for 
motor lamination steels contains micro-alloying levels of elements such 
as silicon and aluminum.
    Steel products to be included in the scope of this investigation, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (``HTSUS''), are products in which: (i) Iron 
predominates, by weight, over each of the other contained elements; 
(ii) the carbon content is 2 percent or less, by weight; and (iii) none 
of the elements listed below exceeds the quantity, by weight, 
respectively indicated:

    1.80 percent of manganese, or
    2.25 percent of silicon, or
    1.00 percent of copper, or
    0.50 percent of aluminum, or
    1.25 percent of chromium, or
    0.30 percent of cobalt, or
    0.40 percent of lead, or
    1.25 percent of nickel, or
    0.30 percent of tungsten, or
    0.10 percent of molybdenum, or
    0.10 percent of niobium, or
    0.15 percent of vanadium, or
    0.15 percent of zirconium.

    All products that meet the physical and chemical description 
provided above are within the scope of this investigation unless 
otherwise excluded. The following products, by way of example, are 
outside or specifically excluded from the scope of this investigation:

<bullet> Alloy hot-rolled steel products in which at least one of the 
chemical elements exceeds those listed above (including, e.g., American 
Society for Testing and Materials (``ASTM'') specifications A543, A387, 
A514, A517, A506).
<bullet> Society of Automotive Engineers (``SAE'')/American Iron & 
Steel Institute (``AISI'') grades of series 2300 and higher.
<bullet> Ball bearing steels, as defined in the HTSUS.
<bullet> Tool steels, as defined in the HTSUS.
<bullet> Silico-manganese (as defined in the HTSUS) or silicon 
electrical steel with a silicon level exceeding 2.25 percent.
<bullet> ASTM specifications A710 and A736.
<bullet> USS abrasion-resistant steels (USS AR 400, USS AR 500).
<bullet> All products (proprietary or otherwise) based on an alloy ASTM 
specification (sample specifications: ASTM A506, A507).
<bullet> Non-rectangular shapes, not in coils, which are the result of 
having been processed by cutting or stamping and which have assumed the 
character of articles or products classified outside chapter 72 of the 
HTSUS.


    The merchandise subject to this investigation is classified in the 
HTSUS at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products covered by this investigation, including: vacuum degassed 
fully stabilized; high strength low alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS 
subheadings are provided for convenience and U.S. Customs purposes, the 
written description of the merchandise under investigation is 
dispositive.

Period of Investigation

    The period of investigation (``POI'') is April 1, 2000 through 
September 30, 2000.

Nonmarket Economy Country

    The Department has treated Kazakhstan as a non-market economy 
(``NME'') country in all past

[[Page 22171]]

antidumping investigations and administrative reviews. See, e.g., 
Titanium Sponge From the Republic of Kazakhstan, 64 FR 66169 (November 
24, 1999) (final admin. review); Ferrosilicon From Kazakhstan and 
Ukraine, 58 FR 13050 (March 9, 1993) (final determination); and Uranium 
From Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and 
Uzbekistan, 57 FR 23380 (June 3, 1992) (prelim. determination). A 
designation as a NME country remains in effect until it is revoked by 
the Department. See section 771(18)(C)(i) of the Act. No party has 
requested a revocation of Kazakhstan's NME status. Therefore, for this 
preliminary determination, the Department is continuing to treat 
Kazakhstan as a NME country.
    When the Department is investigating imports from a NME country, 
normal value (``NV'') is based on the NME producer's factors of 
production, valued in a comparable market economy that is a significant 
producer of comparable merchandise, pursuant to section 773(c)(1) and 
(4) of the Act. The sources of individual factor values are discussed 
in the ``Normal Value'' section of this notice, infra.

Separate Rates

    In a NME proceeding, the Department presumes that all companies 
within the country are subject to governmental control. Thus, it is the 
Department's policy to assign all producers of subject merchandise in a 
NME country a single rate, unless a producer can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate.
    Ispat Karmet is wholly foreign-owned. Ispat Karmet reported that 
100 percent of its shares are held by Ispat Karmet Holdings BV, which 
is located in the Netherlands. Further, there is no Kazakhstan 
ownership of Ispat Karmet. Thus, because we have no evidence indicating 
that it is under the control of the Republic of Kazakhstan, a separate 
rates analysis is not necessary to determine whether it is independent 
from government control. See Brake Rotors from the People's Republic of 
China, 66 FR 1303, 1306 (January 8, 2001) (prelim. results); Creatine 
Monohydrate from the People's Republic of China, 64 FR 71104, 71105 
(December 20, 1999) (final determ.).
    Accordingly, we preliminarily have determined a separate rate for 
Ispat Karmet.

Kazakhstan-Wide Rate

    As discussed, supra, in a NME proceeding, the Department presumes 
that all companies within the country are subject to governmental 
control. The Department assigns a single NME rate unless a producer can 
demonstrate eligibility for a separate rate. Ispat Karmet has 
preliminarily qualified for a separate rate. Furthermore, the 
information on the record indicates that Ispat Karmet accounted for all 
imports of subject merchandise during the POI. Since Ispat Karmet, the 
only known Kazakhstan producer, responded to the Department's 
questionnaire, and we have no evidence of any other Kazakhstan 
producers of subject merchandise during the POI, we have calculated a 
Kazakhstan-wide rate for this investigation based on the weighted-
average margin determined for Ispat Karmet. This Kazakhstan-wide rate 
applies to all entries of subject merchandise except for entries of 
subject merchandise exported by Ispat Karmet.

Date of Sale

    In reporting its U.S. sales, Ispat Karmet stated that it 
``understands that the Department's current practice is to rely on the 
invoice date as the date of sale.'' See Section C response, at 8. Ispat 
Karmet initially stated that the ``date of invoice is the date on which 
all essential terms of sale are finalized, i.e., quantity, unit price, 
and product mix, and is the date on which Ispat Karmet transfers title 
to the customer.'' See Section A response, at A-9. Yet in elaborating 
on its sales process, Ispat Karmet stated that it ``negotiates each 
sale individually and concludes the sale by signing an addendum to an 
annual sales agreement with an international trader. The addendum 
establishes the basic terms for individual transactions, but Ispat 
Karmet does not transfer title to the purchaser until the date shown on 
the invoice. Ispat Karmet, therefore, reports the invoice date as the 
date of sale * * * ''See Section C response, at 8.
    As stated in 19 CFR 351.401(i), the Department will normally use 
the date of invoice as the date of sale. However, as also stated in 
that regulatory provision, the Department may use a date other than the 
date of invoice if the Department is satisfied that a different date 
better reflects the date on which the exporter or producer establishes 
the material terms of sale.
    In response to the Department's questionnaire regarding the types 
of changes after the initial agreement, Ispat Karmet explained that 
``(o)n occasion, the delivery date may be extended beyond the date 
specified in the original addendum. However, we do not normally 
experience any changes once an addendum is finalized, other than 
changes in quantity within the tolerance limit.'' Id. at A-9 and A-10. 
Ispat Karmet stated that after initially negotiating the annual 
contract, ``Ispat Karmet and the trader subsequently negotiate an 
addendum for subsequent shipments of merchandise, generally covering 
the quantity to be shipped over a one-or two-month period and 
establishing the specific terms of those shipments, such as quantity, 
technical specifications, delivery, and packing.'' See Supp. C/D 
response, at 2. However, Ispat Karmet maintained that the ``addendum is 
the preparatory document for a sale, while the invoice reflects the 
actual shipment of the merchandise and the completion of the sale.'' 
Id.
    From Ispat Karmet's own response, it appears that the material 
terms of the sale are established with the addendum. The information on 
the record indicates a lack of any changes in the material terms of 
sale between addendum and invoice, aside from ``variations within a 
permissible tolerance range.'' Id. at 3. There appear to be no changes 
in price or in quantity, outside of the contractually agreed upon 
tolerances, after the addendum is finalized. This serves to confirm 
that the parties agree to the material terms of sale at the addendum 
stage. Therefore, for this preliminary determination, the Department is 
using the date of the addendum as the date of sale, as it better 
reflects the date on which the material terms of the sale were 
established. We intend to fully examine this issue at verification and 
will incorporate our findings, as appropriate, in our final 
determination.

Fair Value Comparisons

    To determine whether sales of hot-rolled steel products from 
Kazakhstan were made in the United States at LTFV, we compared EP to a 
normal value (``NV''), as described in the ``Export Price'' and 
``Normal Value'' sections of this notice, infra.

Export Price

    We used EP methodology for this preliminary determination, in 
accordance with section 772(a) of the Act. Section 772(a) of the Act 
defines EP as the ``the price at which the subject merchandise is first 
sold (or agreed to be sold) before the date of importation by the 
producer or exporter of the subject merchandise outside of the United 
States to an unaffiliated purchaser in the United States or to an 
unaffiliated purchaser for exportation to the United States * * *'' 
Constructed export price (``CEP'') methodology, in accordance with 
section 772(b) of the Act, was not otherwise warranted based on the 
facts

[[Page 22172]]

on the record. All sales activities, including negotiations, paperwork 
processing and receipt of payment, appear to be conducted in 
Kazakhstan. See Section A response, at A-9 and A-10; Supp. A response, 
at 5-6. Ispat Karmet did report that when it ``receives a complaint 
from a customer, a member of Ispat Karmet's technical staff may travel 
to the customer's location to inspect the product.'' See Section C/D 
response, at 4. However, this appears to occur after importation to the 
United States. Ispat Karmet identified Ispat North America, Inc. as 
providing ``general marketing services in the United States to all 
steel plants in the Ispat group, including Ispat Karmet.'' See Section 
A response, at A-8. However, Ispat Karmet reported that ``(n) either 
Ispat North America nor any other related party had any role in U.S. 
sales during the period of investigation.'' See Section C/D response, 
at 7. Ispat Karmet also stated that all of its ``sales to the U.S. 
market during the POI were concluded directly with its trading company 
customers.'' See Section C response, at 7.
    None of the customers to whom Ispat Karmet sold subject merchandise 
to during the POI were listed as affiliated companies. See Supp. A 
response, at Exhibit 3. Furthermore, Ispat Karmet indicated that it 
knew that its reported sales of subject merchandise were destined for 
the United States at the time of sale because in negotiating with an 
international trader, Ispat Karmet seeks ``details of the end-customer 
and the intended end application. Because of this, Ispat Karmet's sales 
have clearly identified destinations.'' See Section A response, at A-9. 
Accordingly, pursuant to section 772(a) of the Act, because subject 
merchandise was sold to an unaffiliated purchaser by Ispat Karmet 
outside of the United States, with the knowledge that the final 
destination of subject merchandise was the United States, we have 
determined these sales to be EP transactions for purposes of this 
preliminary determination.
    In accordance with section 777A(d)(1)(A)(i) of the Act, we compared 
POI-wide weighted-average EPs to the NVs based on factors of 
production. See Memorandum to Edward C. Yang from Juanita H. Chen: 
Factor Valuation Memorandum (April 13, 2001) (``Factor Valuation 
Memo''). We calculated EP based on the Free Carrier At (``FCA'') rail 
prices charged to unaffiliated customers. See Section C response, at 
10. We also made adjustments from the starting price to account for 
foreign inland freight. See Memorandum to the File, from Juanita H. 
Chen, Case Analyst: Preliminary Determination Analysis for OJSC Ispat 
Karmet (April 23, 2001) (``Prelim. Analysis Memo'').

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if: (1) The 
merchandise is exported from a NME country; and (2) the information 
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
    Factors of production include: (1) Hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs, including 
depreciation. We calculated NV based on factors of production reported 
by Ispat Karmet. See Factor Valuation Memo; see also Prelim. Analysis 
Memo. We valued all the input factors using publicly available 
information as discussed in the ``Surrogate Country'' and ``Factor 
Valuations'' sections of this notice, infra.

A. Surrogate Country

    When the Department investigates imports from a NME, section 773(c) 
of the Act provides for the Department, in most circumstances, to base 
NV on the NME producers' factors of production, valued in a surrogate 
market economy country or countries considered appropriate by the 
Department. In accordance with section 773(c)(4), the Department, in 
valuing factors of production, shall utilize, to the extent possible, 
the prices or costs of factors of production in one or more market 
economy countries that are at a level of economic development 
comparable to the NME country and are significant producers of 
comparable merchandise. The sources of individual factor values are 
discussed, infra.
    The Department's Office of Policy has determined that Algeria, 
Ecuador, Egypt, Morocco, and the Philippines are countries comparable 
to Kazakhstan in terms of overall economic development. See Memorandum 
to the File, from Juanita H. Chen, Case Analyst: Selection of Surrogate 
Country (March 26, 2001) (``Surrogate Country Memo''), at Attachment I 
(policy memorandum from Jeffrey May, dated January 12, 2001). According 
to the available information on the record, we have determined that 
Egypt is an appropriate surrogate country because it is at a comparable 
level of economic development and is a significant producer of 
comparable merchandise. Furthermore, there is a wide array of publicly 
available information for Egypt. Therefore, we have relied, where 
possible, on Egyptian information in calculating NV by using Egyptian 
prices to value Ispat Karmet's factors of production, when available 
and where appropriate. We have obtained and relied upon public 
information wherever possible. See Factor Valuation Memo. Where no 
Egyptian values were available, we used information from the 
Philippines, another country chosen by the Department's Office of 
Policy as comparable to Kazakhstan in terms of overall economic 
development. Id.
    In accordance with section 351.301(c)(3)(i) of the Department's 
regulations, for the final determination in an antidumping 
investigation, interested parties may submit publicly available 
information to value factors of production within 40 days after the 
date of publication of the preliminary determination.

B. Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by Ispat Karmet for the POI. 
See Factor Valuation Memo. To calculate NV, we multiplied the reported 
per-unit factor quantities by publicly available surrogate values from 
Egypt or, where necessary, the Philippines.
    In selecting surrogate values, we considered the specificity, 
quality and contemporaneity of the data. We adjusted import prices by 
including the cost of freight so that the import prices were delivered 
prices. For those values not contemporaneous with the POI, we adjusted 
the values to account for inflation using producer price indices, as 
appropriate, published in the International Monetary Fund, 
International Financial Statistics (March 2001) (``IMF'').
    We valued raw material inputs, energy inputs, by-products and 
packing materials using values from the appropriate HTSUS category, and 
from the World Bank website. See Factor Valuation Memo, at 4-8. 
Pursuant to section 351.408(c)(1) of our regulations, where it was 
possible to discern from the record that a factor was purchased from a 
market economy supplier and paid for in a market economy currency, we 
used the price paid to the market economy supplier. See Factor 
Valuation Memo, at 7; see also Lasko Metal Products v. United States, 
43 F.3d 1442, 1445-46 (Fed. Cir. 1994). To value labor, we used 
regression-based wage rates, in accordance with section 351.408(c)(3) 
of the Department's regulations. See Factor Valuation Memo,

[[Page 22173]]

at 8. We based the value of freight by rail on public information used 
in the August 31, 1999 analysis memorandum for the preliminary results 
of the 1997-1998 administrative review of titanium sponge from 
Kazakhstan. Id.; see also Titanium Sponge From the Republic of 
Kazakhstan, 64 FR 48793, 48795 (September 8, 1999) (prelim. results). 
To value overhead, selling, general and administrative expenses, and 
profit, we used public information reported in the 1998 financial 
statements of Alexandria National Iron & Steel Co. (``ANS Steel''), an 
Egyptian producer of hot-rolled steel. See Factor Valuation Memo, at 8-
9. While we could not determine a complete value for overhead using ANS 
Steel's financial statements, we could determine a value for 
depreciation, a part of overhead, and have used this value for 
overhead.
    For each of the surrogate values selected for use in the 
Department's calculations, we adjusted the values for inflation using 
appropriate price index inflators when those values were not from a 
period concurrent with the POI. See Factor Valuation Memo, at 2.

Verification

    As provided in section 782(i)(1) of the Act, we will verify all 
appropriate information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service (``Customs'') to suspend liquidation of all 
imports of subject merchandise entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. We will instruct Customs to require a cash 
deposit or the posting of a bond equal to the weighted-average amount 
by which the NV exceeds the EP, as indicated below. These suspension of 
liquidation instructions will remain in effect until further notice. 
The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/Manufacturer                        margin
                                                               percent
------------------------------------------------------------------------
OJSC Ispat Karmet..........................................       239.57
Kazakhstan-Wide............................................       239.57
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed, within five 
days of the date of publication of this notice, to the parties in this 
investigation, in accordance with section 351.224(b) of the 
Department's regulations.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our affirmative determination of sales at LTFV. As our final 
determination is affirmative, the ITC will determine, before the later 
of 120 days after the date of this preliminary determination or 45 days 
after our final determination, whether imports of hot-rolled steel from 
Kazakhstan are materially injuring, or threaten material injury to, the 
U.S. industry.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than 50 days 
after the date of publication of this notice, and rebuttal briefs, 
limited to issues raised in the case briefs, may be submitted no later 
than five days after the time limit for filing the case brief, pursuant 
to section 351.309(c) and (d) of the Department's regulations. A list 
of authorities used, a table of contents, and an executive summary of 
issues should accompany any briefs submitted to the Department. 
Executive summaries should be limited to five pages total, including 
footnotes.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in the case or rebuttal briefs. 
Tentatively, any hearing will be held 57 days after publication of this 
notice at the U.S. Department of Commerce, 1401 Constitution Avenue, 
NW., Washington, DC 20230, at a time and location to be determined. 
Parties should confirm by telephone the date, time, and location of the 
hearing two days before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the date of publication of this notice, 
pursuant to section 351.310(c) of the Department's regulations. 
Requests should contain: (1) The party's name, address, and telephone 
number; (2) the number of participants; and (3) a list of the issues to 
be discussed. At the hearing, each party may make an affirmative 
presentation only on issues raised in that party's case brief, and may 
make rebuttal presentations only on arguments included in that party's 
rebuttal brief, pursuant to section 351.310(c) of the Department's 
regulations.
    If this investigation proceeds normally, we will make our final 
determination no later than 75 days after the date of this preliminary 
determination (i.e. July 9, 2001).
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act. Effective January 20, 2001, 
Bernard T. Carreau is fulfilling the duties of the Assistant Secretary 
for Import Administration.

    Dated: April 23, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-10850 Filed 5-2-01; 8:45 am]
BILLING CODE 3510-DS-P