22146 Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices

is participating in these reviews, and it

is revoking these antidumping duty

orders.

Effective Date of Revocations

Pursuant to sections 751(c)(3)(A) and

751(d)(2) of the Act, and 19 CFR

351.222(i)(2)(i), the Department will

instruct the Customs Service to

terminate the suspension of liquidation

of the merchandise subject to these

orders entered, or withdrawn from

warehouse, on or after May 14, 2001.

Entries of subject merchandise prior to

the effective date of revocation will

continue to be subject to suspension of

liquidation. The Department will

complete any pending administrative

reviews of these orders and will conduct

administrative reviews of subject

merchandise entered prior to the

effective date of revocation in response

to appropriately filed requests for

review.

Effective January 20, 2001, Bernard T.

Carreau is fulfilling the duties of the

Assistant Secretary for Import

Administration.

Dated: April 27, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import

Administration.

[FR Doc. 01–11150 Filed 5–2–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–421–807]

Notice of Preliminary Determination of

Sales at Less Than Fair Value; Certain

Hot-Rolled Carbon Steel Flat Products

From the Netherlands

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: May 3, 2001.

FOR FURTHER INFORMATION CONTACT:

Melissa Blackledge, Stephanie Arthur,

or Robert James at (202) 482–3518, (202)

482–6312, or (202) 482–0649,

respectively; Antidumping and

Countervailing Duty Enforcement Group

III, Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW., Washington,

DC 20230.

The Applicable Statute and

Regulations:

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Tariff

Act) by the Uruguay Round Agreements

Act (URAA). In addition, unless

otherwise indicated, all citations to the

Department of Commerce (the

Department) regulations are to the

regulations at 19 CFR part 351 (April

2000).

Preliminary Determination

We preliminarily determine that

certain hot-rolled carbon steel flat

products (hot-rolled steel) from the

Netherlands are being sold, or are likely

to be sold, in the United States at less

than fair value (LTFV), as provided in

section 733 of the Tariff Act. The

estimated margins of sales at LTFV are

shown in the ‘‘Suspension of

Liquidation’’ section of this notice.

Case History

On December 4, 2000 the Department

initiated antidumping investigations of

hot-rolled steel from Argentina, India,

Indonesia, Kazakhstan, the Netherlands,

the People’s Republic of China,

Romania, South Africa, Taiwan,

Thailand, and Ukraine. See Initiation of

Antidumping Duty Investigation:

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). Since the

initiation of these investigations the

following events have occurred.

In its initiation notice the Department

set aside a period for all interested

parties to raise issues regarding product

coverage. See 65 FR 77568. We received

comments regarding product coverage

as follows: 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 the

Corus Group plc., which includes Corus

Steel USA (CSUSA) and Corus Staal BV

(Corus Staal), 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 HR

products antidumping investigations,

providing an opportunity to comment

on the Department’s proposed model

matching characteristics and hierarchy.

Comments were submitted by:

petitioners (January 5, 2001); Corus

Staal and CSUSA (January 3, 2001);

Iscor Limited (Iscor), respondent in the

South Africa investigation (January 3,

2001); and Zaporizhstal, respondent in

the Ukraine investigation (January 3,

2001). Petitioners agreed with the

Department’s proposed characteristics

and hierarchy of characteristics. Corus

Staal and CSUSA 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

proposed by the Department or the

hierarchy of those product

characteristics 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 the hierarchy of those

characteristics from those originally

proposed by the Department in its letter

dated December 22, 2000. With respect

to Corus Staal’s and CSUSA’s request,

the additional product characteristic

suggested to distinguish prime 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 B–7 and C–7.

These fields are used in the modelmatch program to prevent matches of

prime merchandise to non-prime

merchandise.

On December 28, 2000, the United

States International Trade Commission

(ITC) notified the Department that it

preliminarily determined that there is a

reasonable indication that an industry

in the United States is materially

injured by the reason of imports of the

subject merchandise from Argentina,

India, Indonesia, Kazakhstan, the

Netherlands, the People’s Republic of

China, Romania, South Africa, Taiwan,

Thailand, and Ukraine. See Hot-Rolled

Steel Products from Argentina, India,

Indonesia, Kazakhstan, the Netherlands,

the People’s Republic of China,

Romania, South Africa, Taiwan,

Thailand, and Ukraine, 66 FR 805

(January 4, 2001).

On January 4, 2001 the Department

issued an antidumping questionnaire to

the Corus Group plc., the sole producer

of subject hot-rolled steel in the

Netherlands. We requested that Corus

Staal and CSUSA respond to section A

(general information, corporate

structure, sales practices, and

merchandise produced), section B

(home market or third-country sales),

section C (U.S. sales), section D (cost of

production/constructed value), and, if

applicable, section E (cost of further

Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices 22147

manufacture or assembly performed in

the United States).

Respondent submitted its initial

response to section A of the

Department’s questionnaire on February

1, 2001. We received Corus Staal’s and

CSUSA’s sections B through E responses

on February 26, 2001. Petitioners filed

comments regarding all portions of

respondent’s questionnaire response on

March 6, 2001. We issued the following

supplemental questionnaires to

respondent: (i) Section A on February

27, 2001, (ii) sections B and C on March

13, 2001, and (iii) sections D and E on

March 14, 2001. Respondent filed a

response to our section A and sections

B through E supplemental

questionnaires on March 16, 2001 and

April 4, 2001, respectively. In addition,

pursuant to the Department’s

preliminary determination that Corus

Staal and CSUSA are affiliated with

Galvpro LP (Galvpro), on March 16,

2001 respondent filed a section E

response reporting the cost of U.S.

further manufacturing incurred by

Galvpro. See Memorandum to Joseph A.

Spetrini; Affiliation Issue Regarding

Galvpro LP and Laura Metaal Holding,

February 27, 2001 (Affiliation

Memorandum); see also Letter from

Robert M. James to the Corus Group,

February 27, 2001. The ‘‘Affiliation’’

section of this notice provides further

information regarding our preliminary

determination with respect to affiliation

issues.

Period of Investigation

The period of investigation (POI) is

October 1, 1999 through September 30,

2000. This period corresponds to the

four most recent fiscal quarters prior to

the month of the filing of the petition

(i.e., December 2000), and is in

accordance with our regulations. See 19

CFR 351.204(b)(1).

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 this investigation.

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 (HTS), 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:

• Alloy hot-rolled steel products in

which at least one of the chemical

elements exceeds those listed above

(including, e.g., ASTM specifications

A543, A387, A514, A517, A506).

• Society of Automotive Engineers

(SAE)/American Iron and Steel Institute

(AISI) grades of series 2300 and higher.

• Ball bearings steels, as defined in

the HTS.

• Tool steels, as defined in the HTS.

• Silico-manganese (as defined in the

HTS) or silicon electrical steel with a

silicon level exceeding 2.25 percent.

• ASTM specifications A710 and

A736.

• USS Abrasion-resistant steels (USS

AR 400, USS AR 500).

• All products (proprietary or

otherwise) based on an alloy ASTM

specification (sample specifications:

ASTM A506, A507).

• 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 HTS.

The merchandise subject to this

investigation is classified in the HTS 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 flat-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 HTS

subheadings are provided for

convenience and U.S. Customs

purposes, the written description of the

merchandise under investigation is

dispositive.

Affiliation

In its initiation notice, the Department

identified as a respondent in this

investigation the Corus Group plc. See

65 FR 77573. As indicated in

respondent’s February 1, 2001

questionnaire response at pages A–7

and A–8, the Corus Group plc. wholly

owns Koninklijke Hoogovens NV

(KHNV) which, in turn, wholly owns

22148 Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices

1 Galvpro is a limited partnership, with

ownership held by Weirton Coatings LLC, the

Galvpro management, and Corus Group plc.

(through Corus Coatings LLC). Galvpro was formed

to construct and operate a manufacturing facility for

the treatment of cold-rolled steel to produce

galvanized steel products. See Respondent’s

January 18, 2001 submission at page 2.

Corus Staal. CSUSA is a U.S. subsidiary

of KHNV and acts as an agent for Corus

Staal’s U.S. sales. CSUSA argues in its

January 18, 2001 submission that

Galvpro should not be considered an

affiliated party under section 771(33) of

the Tariff Act because neither Corus

Staal nor CSUSA has any direct or

indirect ownership of Galvpro1. In

addition, Corus Staal claims in its

February 1, 2001 questionnaire response

that it also considers sales made to

Laura Metaal Trading BV (Laura Metaal)

to be unaffiliated transactions because

KHNV (Corus Staal’s parent and a

minority shareholder in Laura Metaal) is

not in a position to exercise or assert

control over Laura Metaal or its

subsidiaries.

However, as explained below, the

Department has preliminarily

determined that Corus Staal, CSUSA,

Laura Metaal, and Galvpro are affiliated

parties within the meaning of section

771(33)(F) of the Tariff Act because they

are all under the common control of the

Corus Group plc. See Affiliation

Memorandum. Section 771(33)(F) of the

Tariff Act defines affiliated parties to

include ‘‘[t]wo or more persons directly

or indirectly controlling, controlled by,

or under the common control with, any

person.’’ Control, in turn, is defined by

section 771(33) as one person being

‘‘legally or operationally in a position to

exercise restraint or direction over the

other.’’ In determining whether control

exists, the Department considers

corporate or family groupings, franchise

or joint venture agreements, debt

financing, and close supplier

relationships. See 19 CFR 351.102(b).

Galvpro is a joint venture of Corus

Coatings USA, Inc., a wholly-owned

subsidiary of the Corus Group plc., and

Weirton Coatings LLC, a subsidiary of

Weirton Steel Corporation (Weirton).

The Corus Group plc. (through Corus

Coatings USA) has a substantial equity

interest in Galvpro. See Respondent’s

February 1, 2001 response at page A–10;

see also Respondent’s January 18, 2001

letter to the Department at page 3. In

previous cases the Department has

determined that control exists when one

party is in a position to influence the

pricing and production decisions of the

affiliated entity. See, e.g., Notice of

Final Determination of Sales at Less

Than Fair Value and Postponement of

Final Determination; Stainless Steel

Sheet and Strip in Coils From Germany,

64 FR 30710, 30721–24 (June 8, 1999).

The record in this investigation

indicates that the Corus Group plc. is

indeed in a position to influence pricing

and production decisions of Galvpro.

See Affiliation Memorandum at pages 2

and 3 for more detailed information

regarding this issue. In addition, a

review of the record reveals other

indicia of control, including debt

financing of Galvpro by the Corus Group

plc.. See Affiliation Memorandum at

page 3; see also Petitioners’ January 26,

2001 submission at Exhibit 2. Finally,

the significant equity in Galvpro by the

Corus Group plc. (through Corus

Coatings USA) is clear evidence of the

ability of Corus Group plc. to exert

influence over Galvpro’s production,

pricing, or cost of the subject

merchandise or foreign like product.

The record also indicates that the

Corus Group plc. has the ability to exert

control over Laura Metaal. Laura Metaal

consumes subject merchandise through

its manufacturing operations and acts as

a reseller through its service center.2 See

Respondent’s February 1, 2001 response

at page A–3. The Corus Group plc.

wholly owns KHNV, which in turn has

a minority shareholder interest in Laura

Metaal. In addition, KHNV nominated

one of the four voting members on Laura

Metaal’s Board of Directors, and

nominated one of two non-voting

advisors to the Board, affording the

Corus Group plc. substantial influence

over Laura Metaal and the company’s

operations. See Respondent’s February

1, 2001 response at page A–3.

As indicated above, the Corus Group

plc. has the potential ability to exercise

direction and restraint over Galvpro’s

and Laura Metaal’s production and

pricing. The Corus Group plc. has a

substantial equity interest in both

Galvpro and Laura Metaal and plays a

substantial role in their operations and

management. The Corus Group plc. is in

a position, legally and operationally, to

exercise direction and restraint over

both Galvpro and Laura Metaal, within

the meaning of section 771(33)(F) of the

Tariff Act, as amended by the URAA.

Because Corus Staal and CSUSA are

wholly-owned subsidiaries of the Corus

Group plc, Corus Group plc also is in a

position legally and operationally to

exercise direction and restraint over

Corus Staal and CSUSA, within the

meaning of section 771(33)(F) of the

Act. As a result, we preliminarily find

that both Galvpro and Laura Metaal are

affiliated with Corus Staal and CSUSA,

within the meaning of section

771(33)(F) of the Tariff Act because

these four companies are all under the

common control of the Corus Group plc.

For a more detailed discussion of our

preliminary affiliation determination,

please refer to the Affiliation

Memorandum.

Product Comparisons

Pursuant to section 771(16) of the

Tariff Act, all products produced by the

respondent that are within the scope of

the investigation, above, and were sold

in the comparison market during the

POI, are considered to be foreign like

products. We have relied on the

following eleven criteria to match U.S.

sales of subject merchandise to

comparison-market sales of the foreign

like product: whether or not painted,

quality, carbon content level, yield

strength, thickness, width, whether coil

or cut sheet, whether or not temper

rolled, whether or not pickled, whether

mill or trimmed edge, and whether the

steel is rolled with or without patterns

in relief. Where there were no sales of

identical merchandise in the home

market to compare to U.S. sales, we

compared U.S. sales to the next most

similar foreign like product on the basis

of the characteristics and reporting

instructions listed in the Department’s

January 4, 2001 questionnaire.

Fair Value Comparisons

To determine whether sales of hotrolled steel from the Netherlands were

made in the United States at less than

fair value, we compared constructed

export price (CEP) to normal value (NV),

as described in the ‘‘Constructed Export

Price’’ and ‘‘Normal Value’’ sections of

this notice. In accordance with section

777A(d)(1)(A)(i) of the Tariff Act, we

calculated weighted-average CEPs for

comparison to weighted-average NVs.

Constructed Export Price

Corus Staal reported as export price

(EP) transactions certain sales of subject

merchandise sold to unaffiliated U.S.

customers prior to importation. Corus

Staal reported as CEP transactions its

sales of subject merchandise sold

through the Rafferty-Brown Companies,

two affiliated steel service centers

which further manufacture flat-rolled

steel products. In addition, in

accordance with our preliminary

affiliation determination, Corus Staal

reported as CEP transactions sales made

through Galvpro.

We have preliminarily determined

with respect to Corus Staal’s reported

EP sales that such transactions are

properly classified as CEP transactions.

Having reviewed the evidence on the

record of this investigation regarding

respondent’s reported EP sales, we

conclude that sales between the foreign

producer (i.e., Corus Staal) and the U.S.

Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices 22149

3The U.S. Court of International Trade (CIT) has

held that the Department’s practice of determining

levels of trade for CEP transactions after CEP

deductions is an impermissible interpretation of

section 772(d) of the Tariff Act. See Borden, Inc. v.

United States, 4 F. Supp. 2d 1221, 1241–42 (CIT

1998) (Borden); see also Micron Technology v.

United States, 40 F. Supp. 2d. 481 (1999)(Micron).

The U.S. Court of Appeals for the Federal Circuit

(CAFC), however, has reversed the CIT’s holdings

in both Micron and Borden on the level of trade

issue. The CAFC held that the statute

unambiguously requires Commerce to deduct the

selling expenses set forth in section 772(d) from the

CEP starting price prior to performing its LOT

analysis. See Micron Technology Inc. v. United

States, Court Nos. 00–1058–1060 (Fed. Cir. March

7, 2001); see also Borden, Inc. v. United States,

Court Nos. 99–1575–1576 (Fed. Circ. March 12,

2001)(unpublished opinion). Consequently, the

Department will continue to adjust the CEP,

pursuant to section 772(d) of the Tariff Act, prior

to performing the LOT analysis, as articulated by

the Department’s regulations at 19 CFR 351.412.

customer were made ‘‘in the United

States’’ by CSUSA on behalf of Corus

Staal within the meaning of section

772(b) of the Tariff Act, and therefore,

should be treated as CEP transactions.

Specifically, although Corus Staal

initially reaches the agreement with the

U.S. customer on the estimated overall

volume and pricing of merchandise,

CSUSA provides the final written

confirmation of the agreement, setting

forth the agreed prices and quantities, to

the U.S. customer. See Respondent’s

February 1, 2001 response at page A–56.

The description provided by Corus Staal

regarding the sales process for its

alleged EP transactions indicates that,

for these sales, the merchandise was

‘‘sold (or agreed to be sold)’’ in the

United States. Therefore, we have

preliminarily decided to treat Corus

Staal’s reported EP sales as CEP

transactions. This is consistent with the

Federal Circuit’s decision in AK Steel

Corporation et. al. v. United States, 226

F.3d 1361 (Fed. Cir. 2000) (AK Steel).

See also Polyvinyl Alcohol from Japan:

Preliminary Results of Antidumping

Duty Administrative Review, 66 FR

11140 (February 22, 2001), where the

Department preliminarily determined

that, pursuant to AK Steel, sales through

a U.S. affiliate were made ‘‘in the

United States’’ and were therefore

classifiable as CEP transactions. For a

more detailed discussion of this issue,

please refer to our Preliminary Analysis

Memorandum, dated April 23, 2001.

We calculated CEP in accordance

with subsection 772(b) of the Tariff Act.

We based CEP on the packed, delivered,

duty paid or delivered prices to

unaffiliated purchasers in the United

States. We made adjustments for pricebilling errors and early payment

discounts, where applicable. We also

made deductions for movement

expenses in accordance with section

772(c)(2)(A) of the Tariff Act; these

included, where appropriate, foreign

inland freight, marine insurance, foreign

brokerage and handling, international

freight, U.S. customs duties, U.S. inland

freight, U.S. inland insurance, and U.S.

warehousing expenses. In accordance

with section 772(d)(1) of the Tariff Act,

we deducted those selling expenses

associated with economic activities

occurring in the United States,

including direct selling expenses (credit

costs and warranty expenses), and

indirect selling expenses, including

inventory carrying costs. We also made

an adjustment for profit in accordance

with section 772(d)(3) of the Tariff Act.

With respect to subject merchandise

to which value was added in the United

States by the Rafferty Brown Companies

and Galvpro prior to sale to unaffiliated

customers, we deducted the cost of

further manufacturing in accordance

with section 772(d)(2) of the Tariff Act.

Level of Trade

In accordance with section

773(a)(1)(B)(i) of the Tariff Act, to the

extent practicable, we determine NV

based on sales in the comparison market

at the same level of trade (LOT) as the

EP or CEP transaction. The NV LOT is

that of the starting price sales in the

comparison market or, when NV is

based on CV, that of the sales from

which we derive selling, general and

administrative (SG&A) expenses and

profit. For EP the U.S. LOT is also the

level of the starting price sale, which is

usually from the exporter to the

importer. For CEP it is the level of the

constructed sale from the exporter to the

importer.3

To determine whether NV sales are at

a different LOT than EP or CEP sales, we

examine stages in the marketing process

and selling functions along the chain of

distribution between the producer and

the unaffiliated customer. If the

comparison market sales are at a

different LOT, and the difference affects

price comparability, as manifested in a

pattern of consistent price differences

between the sales on which NV is based

and comparison market sales at the LOT

of the export transaction, we make a

LOT adjustment under section

773(a)(7)(A) of the Tariff Act. Finally,

for CEP sales, if the NV level is more

remote from the factory than the CEP

level and there is no basis for

determining whether the differences in

the levels between NV and CEP affect

price comparability, we adjust NV

under section 773(A)(7)(B) of the Tariff

Act (the CEP offset provision). See, e.g.,

Certain Carbon Steel Plate from South

Africa, Final Determination of Sales at

Less Than Fair Value, 62 FR 61731

(November 19, 1997).

In implementing these principles in

this investigation, we obtained

information from Corus Staal and

CSUSA about the marketing stages

involved in its reported U.S. and home

market sales, including a description of

the selling activities performed by Corus

Staal and CSUSA for each channel of

distribution. In identifying LOTs for

U.S. CEP sales we considered the selling

functions reflected in the starting price

after any adjustments under section

772(D) of the Tariff Act.

In the home market, Corus Staal

reported two channels of distribution

(sales by Corus Staal and sales through

its affiliated service centers) and three

customer categories (end users, steel

service centers, and trading companies).

For both channels of distribution in the

home market, Corus Staal performed

similar selling functions, including

strategic and economic planning,

advertising, freight and delivery

arrangements, technical/warranty

services, and sales logistics support. The

remaining selling activities did not

differ significantly by channel of

distribution. See Corus Staal’s February

1, 2001 response at Exhibit A–8.

Because channels of distribution do not

qualify as separate levels of trade when

the selling functions performed for each

channel are sufficiently similar, we have

determined that one LOT exists for

Corus Staal’s home market sales.

In the United States CSUSA reported

two channels of distribution for sales of

subject merchandise during the POI (EP

sales made directly from CSUSA to U.S.

customers and CEP sales made through

affiliated service centers). For EP sales,

CSUSA reported two customer

categories (end users and steel service

centers). See CSUSA’s February 26,

2001 response at pages C–13 through C–

15. As explained in the ‘‘Constructed

Export Price’’ section of our notice, we

have preliminary determined that all of

Corus Staal’s reported EP transactions

are properly classified as CEP sales. In

CEP situations we do not determine the

U.S. LOT on the basis of the CEP

starting price. Rather, as described

above, we determine the U.S. LOT on

the basis of the CEP starting price minus

the expenses and profit deducted

pursuant to section 772(d) of the Act.

Corus Staal and CSUSA claimed that

sales made through its second channel

of distribution in the home market (i.e.,

those through affiliated service centers)

constituted a different LOT from its

alleged EP sales. Corus Staal and

CSUSA therefore requested a LOT

adjustment to the extent that price

comparisons were made between U.S.

EP sales and those through home market

affiliated service centers. As there are no

22150 Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices

4On March 6, 2001 Corus Staal requested that it

not be required to report downstream home market

sales made through Feijen Staal service (Feijen),

claiming that the cut-to-length sheet sold by this

form would have a low likelihood of matching to

U.S. sales of coiled material. The Department

informed Corus Staal on March 8, 2001 that it

would not be required to report Feijen’s

downstream sales based on Corus Staal’s claims, on

the record, with respect to the nature of the

products sold by Feijen. The Department will

accordingly include in its calculation of normal

value sales to Feijen from Corus Staal, provided

these transactions pass our arm’s-length test. Corus

Staal also requested an exemption from reporting

downstream sales made by Vlietjonge BV

(Vlietjonge), an affiliated party involved in the

processing and sale of flat products. See Corus

Staal’s April 4, 2001 supplemental response at page

A–4. Corus Staal again claimed that the cut-tolength merchandise sold by Vlietjonge would not

likely match to U.S. sales of coiled material. The

Department granted Corus Staal’s request on April

6, 2001.

EP transactions in the United States, it

is not necessary to address respondent’s

request for a LOT adjustment with

respect to EP sales.

With regard to its CEP sales,

respondent claims that a CEP offset for

sales made through two affiliated

parties, Rafferty-Brown Steel Company

of Connecticut (RBC) and RaffertyBrown Steel Company of North Carolina

(RBN) (collectively, the Rafferty-Brown

Companies) is appropriate because the

RBC and RBN sales are made at a point

in the distribution process that is less

advanced than Corus Staal’s home

market sales. In analyzing respondent’s

request for a CEP offset, we reviewed

information respondent provided in

section A of its response regarding

selling activities performed and services

offered in the U.S. and foreign market.

We found there to be few differences in

the selling functions performed by

Corus Staal on sales to its affiliated U.S.

importers and those performed for sales

in the home market. For example, on

sales to both home market customers

and to affiliated U.S. importers, Corus

Staal provided similar freight and

delivery services and technical/

warranty assistance. See Respondent’s

February 1, 2001 response at pages A–

19 through A–46. The Department has

preliminarily determined that the record

does not support Corus Staal’s claim

that home market sales are at a different,

more advanced LOT than the adjusted

CEP sales. Accordingly, no CEP offset

adjustment to NV is warranted. For a

more detailed discussion regarding the

basis for our LOT determination, refer to

our Preliminary Determination Analysis

Memorandum for the Corus Group plc.,

dated April 23, 2001.

Normal Value

Home Market Viability

In order to determine whether there

was a sufficient volume of sales in the

home market to serve as a viable basis

for calculating NV (i.e., the aggregate

volume of home market sales of the

foreign like product was equal to or

greater than five percent of the aggregate

volume of U.S. sales), we compared

Corus Staal’s volume of home market

sales of the foreign like product to the

volume of U.S. sales of the subject

merchandise, in accordance with

section 773(a)(1)(C) of the Tariff Act. As

Corus Staal’s aggregate volume of home

market sales of the foreign like product

was greater than five percent of its

aggregate volume of U.S. sales of the

subject merchandise, we determined

that the home market was viable.

Therefore, we have based NV on home

market sales in the usual commercial

quantities and in the ordinary course of

trade.

Affiliated-Party Transactions and

Arm’s-Length Test

Corus Staal’s sales to affiliated home

market customers for consumption

which were not made at arm’s-length

prices were excluded from our analysis

because we considered them to be

outside the ordinary course of trade.4

See 19 CFR 351.102(b). To test whether

these sales were made at arm’s-length

prices, we compared on a modelspecific basis the prices of sales to

affiliated and unaffiliated customers net

of all movement charges, direct selling

expenses, and packing. Where, for the

tested models of subject merchandise,

prices to the affiliated party were on

average 99.5 percent or more of the

price to the unaffiliated parties, we

determined that sales made to the

affiliated party were at arm’s length. See

19 CFR 351.403(c). In instances where

no price ratio could be calculated for an

affiliated customer because identical

merchandise was not sold to

unaffiliated customers, we were unable

to determine that these sales were made

at arm’s-length prices and, therefore,

excluded them from our LTFV analysis.

See, e.g., Final Determination of Sales at

Less Than Fair Value: Certain ColdRolled Carbon Steel Flat Products from

Argentina, 58 FR 37062, 37077 (July 9,

1993); see also Notice of Preliminary

Determination of Sales at Less Than Fair

Value and Postponement of Final

Determination: Emulsion StyreneButadiene Rubber from Brazil, 63 FR

59509, 59512 (November 4, 1998).

Where the exclusion of such sales

eliminated all sales of the most

appropriate comparison product, we

made a comparison to the next most

similar model.

Cost of Production Analysis

Based on allegations contained in the

petition, and in accordance with section

773(b)(2)(A)(i) of the Tariff Act, we

found reasonable grounds to believe or

suspect that sales of hot-rolled steel

produced in the Netherlands were made

at prices below the cost of production

(COP). As a result, the Department has

initiated investigations to determine

whether Corus Staal made home market

sales during the POI at prices below its

respective COP, within the meaning of

section 773(b) of the Tariff Act. We

conducted the COP analysis described

below.

A. Calculation of COP

In accordance with section 773(b)(3)

of the Tariff Act, we calculated COP

based on the sum of Corus Staal’s cost

of materials and fabrication for the

foreign like product, plus an amount for

home market SG&A expenses, interest

expenses, and packing costs. We relied

on the home market sales and COP

information provided by Corus Staal in

its original and supplemental responses.

Where appropriate, we made certain

adjustments to Corus Staal’s reported

COP. See Memorandum to the File,

‘‘Analysis of Cost-of-Production Data of

Corus Group plc.,’’ April 23, 2001, on

file in room B–099 of the Main

Commerce building.

B. Test of Home-Market Sales Prices

We compared the adjusted weightedaverage COP for Corus Staal to the home

market sales of the foreign like product,

as required under section 773(b) of the

Tariff Act, in order to determine

whether these sales had been made at

prices below the COP within an

extended period of time (i.e., a period of

one year) in substantial quantities and

whether such prices were sufficient to

permit the recovery of all costs within

a reasonable period of time. In

accordance with section 773(b)(2)(C)(i)

of the Tariff Act, we determined that

sales made below the COP were made

in substantial quantities if the volume of

such sales represented 20 percent or

more of the volume of sales under

consideration for the determination of

normal value.

On a model-specific basis, we

compared the revised COP to the home

market prices, less any applicable

movement charges and other direct and

indirect selling expenses.

C. Results of the COP Test

Pursuant to section 773(b)(2)(C) of the

Tariff Act, where less than 20 percent of

a respondent’s sales of a given product

were at prices less than the COP, we did

not disregard any below-cost sales of

Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices 22151

that product because we determined

that the below-cost sales were not made

in ‘‘substantial quantities.’’ Where 20

percent or more of a respondent’s sales

of a given product during the POI were

at prices less than the COP, we

determined such sales to have been

made in ‘‘substantial quantities’’ within

an extended period of time in

accordance with section 773(b)(2)(B) or

the Tariff Act. In such cases, because we

compared prices to POI-average costs,

we also determined that such sales were

not made at prices which would permit

recovery of all costs within a reasonable

period of time, in accordance with

section 773(b)(2)(D) of the Tariff Act.

Therefore, we disregarded the belowcost sales.

We found that for certain models of

hot-rolled steel, more than 20 percent of

the home-market sales by Corus Staal

were made within an extended period of

time at prices less than the COP.

Further, the prices did not provide for

the recovery of costs within a reasonable

period of time. We therefore disregarded

these below-cost sales and used the

remaining sales as the basis for

determining NV, in accordance with

section 773(b)(1) of the Tariff Act. For

those U.S. sales of hot-rolled steel for

which there were no comparable home

market sales in the ordinary course of

trade, we compared EP to constructed

value (CV) in accordance with section

773(a)(4) of the Tariff Act. See Price-toCV Comparisons, below.

D. Calculation of Constructed Value

In accordance with section 773(e)(1)

of the Tariff Act, we calculated CV

based on the sum of Corus Staal’s cost

of materials, fabrication, SG&A, interest,

U.S. packing costs, and an amount for

profit. We made adjustments similar to

those described above for COP. In

accordance with section 773(e)(2)(A) of

the Tariff Act, we based SG&A and

profit on the amounts incurred and

realized by Corus Staal in connection

with the production and sale of the

foreign like product in the ordinary

course of trade for consumption in the

home market. For selling expenses we

used the weighted-average home market

selling expenses.

Price-to-Price Comparisons

We calculated NV based on the FOB

or delivered prices to unaffiliated

customers. We made deductions, where

appropriate, from the starting price for

billing adjustments, early payment

discounts, and inland freight. Where

appropriate, we made adjustments for

differences in the physical

characteristics of the merchandise in

accordance with section 773(a)(6)(C)(ii)

of the Tariff Act. In addition, we made

adjustments under section

773(a)(6)(C)(iii) of the Tariff Act for

differences in circumstances of sale for

imputed credit expenses (offset by

interest revenue) and warranties.

Finally, we deducted home market

packing costs and added U.S. packing

costs in accordance with section

773(a)(6)(A) and (B) of the Tariff Act.

Price-to-CV Comparisons

For price-to-CV comparisons, we

made adjustments to CV in accordance

with section 773(a)(8) of the Tariff Act.

We deducted from CV the weightedaverage home market direct selling

expenses and added the weightedaverage U.S. product-specific direct

selling expenses in accordance with

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

Currency Conversions

We made currency conversions into

U.S. dollars based on the exchange rates

in effect on the dates of the U.S. sales,

as certified by the Federal Reserve Bank,

in accordance with section 773A(a) of

the Tariff Act.

Verification

Pursuant to section 782(i) of the Tariff

Act, we intend to verify all information

relied upon in making our final

determination.

Suspension of Liquidation

In accordance with section 733(d)(2)

of the Tariff Act, we are directing the

Customs Service to suspend liquidation

of all entries of hot-rolled steel from the

Netherlands that are entered, or

withdrawn from warehouse, for

consumption on or after the date of

publication of this notice in the Federal

Register. We will instruct the Customs

Service to require a cash deposit or the

posting of a bond equal to the weightedaverage amount by which the NV

exceeds the CEP, as indicated in the

chart below. These suspension-ofliquidation instructions will remain in

effect until further notice. The

weighted-average dumping margins are

as follows:

Exporter/manufacturer

Weightedaverage

margin

percentage

Corus Staal BV ......................... 2.44

All Others .................................. 2.44

ITC Notification

In accordance with section 733(f) of

the Tariff Act, we have notified the ITC

of our determination. If our final

antidumping determination is

affirmative, the ITC will determine

whether these imports are materially

injuring, or threaten material injury to,

the U.S. industry. The deadline for that

ITC determination would be the later of

120 days after the date of this

preliminary determination or 45 days

after the date of our final

determinations.

Public Comment

Case briefs or other written comments

in at least six copies must be submitted

to the Assistant Secretary for Import

Administration no later than later than

fifty days after the date of publication of

this notice, and rebuttal briefs, limited

to issues raised in case briefs, no later

than fifty-five days after the date of

publication of this preliminary

determination. A list of authorities used

and an executive summary of issues

should accompany any briefs submitted

to the Department. Such summary

should be limited to five pages total,

including footnotes. In accordance with

section 774 of the Tariff Act, we will

hold a public hearing, if requested, to

afford interested parties an opportunity

to comment on arguments raised in case

or rebuttal briefs. Tentatively, any

hearing will be held fifty-seven days

after publication of this notice, time and

room to be determined, at the U.S.

Department of Commerce, 14th Street

and Constitution Avenue, NW.,

Washington, DC 20230. Parties should

confirm by telephone the time, date, and

place of the hearing 48 hours before the

scheduled time.

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 publication of this notice.

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. Oral

presentations will be limited to issues

raised in the case and rebuttal briefs. We

intend to make our final determination

no later than 75 days after the date of

this preliminary determination.

This determination is published

pursuant to sections 733(f) and 777(i)(1)

of the Tariff Act. Since 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. 01–10846 Filed 5–2–01; 8:45 am]

BILLING CODE 3510–DS–P