Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices 22157

1The petitioners in these investigations are

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, the

Independent Steelworkers Union, and the United

Steelmakers of America (collectively the

petitioners). However, Weirton Steel Corporation is

not a petitioner in the investigation involving the

Netherlands.

2See Initiation Notice for a complete list of all the

countries being investigated concurrently.

weighted-average dumping margins are

as follows:

Exporter/manufacturer

Weightedaverage

margin

percent

Ukraine-Wide .............................. 89.49

International Trade Commission

Notification

In accordance with section 733(f) of

the Act, we have notified the ITC of our

determination of sales at LTFV. If 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

the domestic industry in the United

States is materially injured, or

threatened with material injury, by

reason of imports, or sales (or the

likelihood of sales) for importation, of

the subject merchandise.

Public Comment

Case briefs or other written comments

may be submitted to the Assistant

Secretary for Import Administration no

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. See 19 CFR

351.309(c)(1)(i); 19 CFR 351.309(d)(1). A

list of authorities used and an executive

summary of issues should accompany

any briefs submitted to the Department.

This summary 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 case or rebuttal briefs.

Tentatively, any hearing will be held

fifty-seven days after publication of this

notice at the U.S. Department of

Commerce, 14th Street and 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. See 19 CFR 351.310(c). 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. See 19 CFR 351.310(c).

If this investigation proceeds

normally, we will make our final

determination no later than 75 days

after the date of the preliminary

determination.

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. 01–10847 Filed 5–2–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–533–820]

Notice of Preliminary Determination of

Sales at Less Than Fair Value and

Postponement of Final Determination:

Certain Hot-Rolled Carbon Steel Flat

Products From India

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: May 3, 2001.

FOR FURTHER INFORMATION CONTACT:

Nithya Nagarajan, Timothy Finn, or

John Conniff at (202) 482–5253, (202)

482–0065, and (202) 482–1009,

respectively; AD/CVD Enforcement,

Office 4, Group II, Import

Administration, Room 1870,

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 Act)

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to Department of

Commerce (the Department) regulations

refer to the regulations codified at 19

CFR part 351 (2000).

Preliminary Determination

We preliminarily determine that

certain hot-rolled carbon steel flat

products (HRS) from India 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 Act. The estimated margins of sales

at LTFV are shown in the Suspension of

Liquidation section of this notice.

Case History

This investigation was initiated on

December 4, 2000. 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) (Initiation Notice).1 Since the

initiation of these investigations, the

following events have occurred.

The Department set aside a period for

all interested parties to raise issues

regarding product coverage. See

Initiation Notice, 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

HRS 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; and from Corus

Staal BV and Corus Steel U.S.A., Inc.

(collectively referred to as Corus); and

Thomas Steel Strip Corporation on

December 26, 2000, and from Rayovac

Corporation on March 12, 2001.

On December 22, 2000, the

Department issued a letter to all

interested parties in each of the

concurrent certain hot-rolled carbon

steel flat products antidumping

investigations,2 providing an

opportunity to comment on the

Department’s proposed model matching

characteristics and hierarchy.

Comments were submitted by:

petitioners (January 5, 2001); Corus, a

respondent in the concurrent

Netherlands HRS investigation (January

3, 2001); Iscor Limited, a respondent in

22158 Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices

3Section A of the questionnaire requests general

information concerning a company’s corporate

structure and business practices, the merchandise

under investigation that it sells, and the manner in

which it sells that merchandise in all of its markets.

Section B requests a complete listing of all home

market sales, or, if the home market is not viable,

of sales in the most appropriate third-country

market (this section is not applicable to respondents

in non-market economy (NME) cases). Section C

requests a complete listing of U.S. sales. Section D

requests information on the cost of production

(COP) of the foreign like product and the

constructed value (CV) of the merchandise under

investigation. Section E requests information on

further manufacturing.

the concurrent South Africa HRS

investigation (January 3, 2001); and

Zaporizhstal, a respondent in the

concurrent Ukraine HRS investigation

(January 3, 2001). No other interested

party submitted comments. Petitioners

agreed with the Department’s proposed

characteristics and hierarchy of

characteristics. 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

proposed by the Department or the

hierarchy of those product

characteristics but, rather, provided

information relating to its own products

that were 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

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 B–

7 and C–7. These fields are used in the

model match program to prevent

matches of prime merchandise to nonprime merchandise.

On December 28, 2000, the United

States International Trade Commission

(ITC) preliminarily determined that

there is a reasonable indication that

imports of the products subject to this

investigation from Argentina, China,

India, Indonesia, Kazakhstan, the

Netherlands, Romania, South Africa,

Taiwan, Thailand, and Ukraine, are

materially injuring an industry in the

United States producing the domestic

like product. 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).

The Department issued antidumping

questionnaires to the two mandatory

respondents in India on January 11,

2001.3 See Selection of Respondents

section below. We received responses to

our questionnaire from both mandatory

respondents, Ispat Industries Ltd. (Ispat)

and Essar Steel Ltd. (Essar). We issued

supplemental questionnaires, pertaining

to sections A, B, C, and D of the

antidumping questionnaire, to Ispat and

Essar in March 2001. Ispat and Essar

responded to these supplemental

questionnaires in April 2001.

Ispat requested that it not be required

to report certain information requested

in the questionnaires. Specifically Ispat

requested that it be permitted to exclude

sales of HRS by its cold-rolling division.

These sales were the result of internal

transfers between Ispat’s HRS facility

and its cold-rolling production facility.

On February 1, 2001, Ispat reported that

its hot-rolling division transferred a

small quantity of HRS to its cold-rolling

division which primarily further

processed the HRS into non-subject

merchandise. However, the cold-rolling

division sold a small percentage of HRS

to unaffiliated home market customers

during the period of investigation (POI).

Also, Ispat reported that its cold-rolling

division purchased HRS on the open

market during the POI and does not

maintain information that would enable

it to track whether it sold HRS produced

by Ispat’s hot-rolling division or HRS

purchased from unaffiliated suppliers.

Therefore, according to Ispat, it would

be extremely difficult for Ispat to

identify and report the sales of HRS, by

its cold-rolling division. In addition,

Ispat claimed that the sales at issue

involve products with characteristics

unique to the home market, and thus it

is unlikely that these sales would match

its U.S. sales. As a result, Ispat

requested that it be allowed to exclude

these sales from its overall home market

sales database.

On March 16, 2001, the Department

issued a supplemental questionnaire to

Ispat concerning this exclusion request.

We received Ispat’s response on March

22, 2001. The information contained in

this response, in addition to information

contained in Ispat’s responses to the

antidumping questionnaire, indicate

that the sales covered by these exclusion

requests are not representative of

normal selling behavior, were made in

such small volumes that they would

have an insignificant effect on our

analysis, and, if not excluded, would

unduly complicate the Department’s

analysis. Therefore, we granted the

exclusion request discussed above. See

Letter from Thomas F. Futtner, Acting

Office Director, to Ispat, dated April 16,

2001.

Postponement of the Final

Determination

Section 735(a)(2) of the Act provides

that a final determination may be

postponed until not later than 135 days

after the date of the publication of the

preliminary determination if, in the

event of an affirmative preliminary

determination, a request for such

postponement is made by exporters who

account for a significant proportion of

exports of the subject merchandise, or in

the event of a negative preliminary

determination, a request for such

postponement is made by the

petitioners. The Department’s

regulations, at 19 CFR 351.210(e)(2),

require that requests by respondents for

postponement of a final determination

be accompanied by a request for

extension of provisional measures from

a four-month period to not more than

six months.

On April 13, 2001, Ispat and Essar

requested that, in the event of an

affirmative preliminary determination

in this investigation, the Department

postpone its final determination until

135 days after the publication of the

preliminary determination. Ispat and

Essar also included a request to extend

the provisional measures to not more

than 135 days after the publication of

the preliminary determination.

Accordingly, since we have made an

affirmative preliminary determination,

and the requesting parties account for a

significant proportion of exports of the

subject merchandise, we have

postponed the final determination until

not later than 135 days after the date of

the publication of the preliminary

determination.

Period of Investigation

The period of investigation (POI) for

this investigation 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.,

November 2000).

Scope of Investigation

For purposes of these investigations,

the products covered are certain hotrolled 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

Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices 22159

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 these investigations 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 these investigations, 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 these

investigations unless otherwise

excluded. The following products, by

way of example, are outside or

specifically excluded from the scope of

these investigations:

• 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).

• Society of Automotive Engineers

(SAE)/American Iron & Steel Institute

(AISI) grades of series 2300 and higher.

• Ball bearing steels, as defined in the

HTSUS.

• Tool steels, as defined in the

HTSUS.

• Silico-manganese (as defined in the

HTSUS) 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 HTSUS.

The merchandise subject to these

investigations 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 these

investigations, 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.

Selection of Respondents

Section 777A(c)(1) of the Act directs

the Department to calculate individual

dumping margins for each known

exporter and producer of the subject

merchandise. Where it is not practicable

to examine all known producers/

exporters of subject merchandise,

section 777A(c)(2) of the Act permits the

Department to investigate either (1) a

sample of exporters, producers, or types

of products that is statistically valid

based on the information available at

the time of selection, or (2) exporters

and producers accounting for the largest

volume of the subject merchandise that

can reasonably be examined. Using

company-specific export data for the

POI, which we obtained from the

American Embassy in New Delhi, India,

we found that four Indian exporters

shipped HRS to the United States

during the POI. Due to limited resources

we determined that we could investigate

only the two largest producers/

exporters, accounting for more than 60

percent of total exports to the United

States. See Memorandum from Timothy

Finn to Holly A. Kuga, Selection of

Respondents, dated January 10, 2001.

Therefore, we designated Ispat and

Essar as mandatory respondents and

sent them the antidumping

questionnaire.

Product Comparisons

In accordance with section 771(16) of

the Act, all products produced by the

respondents covered by the description

in the Scope of Investigation section,

above, and sold in India during the POI

are considered to be foreign like

products for purposes of determining

appropriate product comparisons to

U.S. sales. We have relied upon the

following product characteristics to

match U.S. sales of subject merchandise

to comparison-market sales of the

foreign like product or CV: painted or

not painted; quality; carbon content;

yield strength; thickness; width; cut-tolength or coil; tempered or not

tempered; pickled or not pickled; edge

trim; and 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 listed above.

Fair Value Comparisons

To determine whether sales of HRS

from India were made in the United

States at LTFV, we compared the export

22160 Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices

price (EP) to the normal value (NV), as

described in the Export Price and

Normal Value sections of this notice. In

accordance with section

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

calculated weighted-average EPs. We

compared these to weighted-average

home market prices.

Date of Sale

For home market and U.S. sales, Ispat

and Essar both reported the date of

invoice/shipment, as the most

appropriate date of sale. Essar and Ispat

both stated that the invoice/shipment

date best reflects the date on which the

material terms of sale are established

and that price and/or quantity can and

do change between order confirmation

date and invoice/shipment date.

Petitioners, however, have alleged that

the sales documentation provided by

respondents indicates that the order

confirmation date appears to be the date

when the material terms of sale are set

for a majority of these respondents’ sales

of HRS. On March 2, 2001, the

Department requested respondents to

provide additional information

concerning the choice of date of

invoice/shipment as the date of sale. On

March 16, 2001, Ispat and Essar

reiterated that invoice/shipment date is

the most appropriate date of sale and

requested that they not have to report

sales based on any alternative date of

sale.

The Department is preliminarily using

the dates of sale reported by each

respondent (i.e., date of invoice/

shipment), as this is our preferred

methodology. The Department uses

invoice date under section 351.401(i)

unless there is sufficient evidence that

material terms of sale initially set at

some earlier date were not subject to

change. This methodology has recently

been affirmed by the Court of

International Trade. See SEAH Steel

Corp. Ltd. v. United States, Slip. Op.

01–20 (Ct. Int’l. Trade) (February 23,

2001) (ruling that the Department’s

choice of date of invoice as the date of

sale was appropriate and in accordance

with the Department’s practice).

However, we intend to fully examine

establishment of material terms of sale

at verification, and we will incorporate

our findings, as appropriate, in our

analysis for the final determination. Due

to the complexity of this issue, we invite

all interested parties to submit

comments on this issue in accordance

with the schedule for comments set

forth in this notice.

Export Price

For the price to the United States, we

used EP, in accordance with section

772(a) of the Act, because Ispat and

Essar sold the merchandise directly to

unaffiliated U.S. customers or sold the

merchandise to unaffiliated trading

companies, with knowledge that these

companies in turn sold the merchandise

to U.S. customers, and constructed

export price was not otherwise

warranted. For both Ispat and Essar, we

calculated EP using the packed prices

charged to the first unaffiliated

customer in the United States (the

starting price).

We deducted from the starting price,

where applicable, amounts for discounts

and rebates, and movement expenses in

accordance with section 772(c)(2)(A) of

the Act. In this case, movement

expenses include foreign inland freight,

international freight, foreign and U.S.

brokerage and handling charges,

insurance, U.S. duties and U.S. inland

freight.

Duty Drawback

In the instant investigation, Ispat and

Essar have claimed a duty drawback

adjustment for the Government of

India’s Duty Entitlement Passbook

Scheme (‘‘DEPB’’). Under the DEPB

program, exporters are granted a credit

which is equivalent to 14 percent of the

FOB value of exports. The exporters

then use this credit to offset the customs

duty payment on imported inputs used

to manufacture exported products.

In addition, Essar has claimed a duty

drawback adjustment for the Advance

License program. The Advance License

program allows exporters to import

specified inputs duty-free to utilize in

production of a finished product.

According to the information on the

record, there is a quantitative limit on

the duty-free imports for each of the

specified input materials. These limited

inputs are exempt from customs duties,

and upon exportation of the finished

merchandise, the duties collected on

imported inputs are refunded to the

exporter.

The petitioners, in their comments for

our preliminary determination, filed on

April 11, 2001, argue that neither Ispat

nor Essar qualify for a duty drawback

adjustment for the DEPB program; and

in addition, that Essar does not qualify

for the Advance License program,

because the respondents have failed to

show that the duty drawback received

conformed to the Department’s

requirements for granting the

adjustment.

The Department applies a twopronged test to determine whether a

respondent has fulfilled the statutory

requirements for a duty drawback

adjustment pursuant to section

772(c)(1)(B) of the Act. Specifically, the

Department grants a duty drawback

adjustment if it finds that: (1) Import

duties and rebates are directly linked to

and are dependent upon one another,

and (2) the company claiming the

adjustment can demonstrate that there

are sufficient imports of raw materials to

account for the duty drawback received

on exports of the manufactured product.

See Steel Wire Rope from the Republic

of Korea; Final Results of Antidumping

Duty Administrative Review, 61 FR

55965, 55968 (October 30, 1996).

The Department has repeatedly

rejected the claim for duty drawback

under the DEPB, based on the fact that

the applicants received a drawback for

the full amount of dutiable imports

although there is no direct linkage

between the material actually imported

and the refunded amount. See Final

Determination: Stainless Steel Round

Wire from India, 64 FR 17319, 17320

(April 9, 1999). The record evidence in

this investigation demonstrates that

neither Essar nor Ispat was able to

‘‘link’’ the import duties paid on the

input, and then rebated upon

exportation. Rather the evidence on the

record demonstrates that the DEPB

program is a refund of duties calculated

on an aggregated basis rather than on a

input-specific basis. See Essar:

Supplemental Questionnaire Response,

dated April 6, 2001, at 48–50; see also

Ispat: Supplemental Questionnaire

Response, dated April 6, 2001, at SC–

18–19. After a review of the

documentation on the record, we found

that neither Ispat nor Essar was able to

(1) demonstrate that import duties and

rebates for the DEPB program are

directly linked to and dependent upon

one another; or (2) demonstrate that

there were sufficient imports of raw

materials to account for the duty

drawback received on exports of the

finished product. See Final Results of

Administrative Review: Silicon Metal

from Brazil, 64 F.R. 6305, 6318

(February 9, 1999) (denying a duty

drawback adjustment when the

respondent had not met the burden of

demonstrating that it was entitled to the

adjustment). Based on this information,

we preliminarily find that Ispat and

Essar have failed to meet both prongs of

the Department’s test with regard to the

DEPB duty drawback adjustment. As a

result, we have not made an adjustment

to U.S. price for DEPB duty drawback in

the preliminary determination.

With regard to the Advance License

program, we further find that Essar has

not met its burden. Essar failed

demonstrated that in order to obtain a

refund from the Government of India

under the Advance License Program,

that it was able to link the value of

Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices 22161

imports eligible for refund to the actual

quantity of inputs imported and then

used in the production and export of

subject merchandise. Essar states that it

provides the following information to

the Government of India: (1) The

quantity of exports; (2) the quantity of

imports; and (3) ‘‘whether the company

imported inputs in proportion to the

quantitative norms set by the

government.’’ See Essar: Supplemental

Questionnaire Response, at 49–50.

However, based upon an examination of

the information on the record, the

Department is unable to find that Essar’s

records indicate that the calculated

amount of exempted import duties were

applied to the import quantities of input

materials actually utilized (as opposed

to the total aggregate quantity of imports

eligible), and then reconciled to the

quantity of merchandise exported to

derive the reported per unit duty

drawback amount. See id. at 50.

Therefore, we preliminarily find that

Essar was unable to (1) demonstrate that

import duties and rebates for the

Advance License program are directly

linked to and dependent upon one

another; and (2) demonstrate that there

were sufficient imports of raw materials

to account for the duty drawback

received on exports of the finished

product. Therefore, we preliminarily

find that Essar has not met both prongs

of the Department’s test with regard to

the Advance Licence duty drawback

adjustment. As a result, we have not

made an adjustment to Essar’s U.S. price

for Advance License duty drawback in

the preliminary determination.

Normal Value

A. Selection of Comparison Market

Section 773(a)(1) of the Act directs

that NV be based on the price at which

the foreign like product is sold in the

home market, provided that the

merchandise is sold in sufficient

quantities (or has sufficient aggregate

value, if quantity is inappropriate) and

that there is no particular market

situation in the home market that

prevents a proper comparison with the

EP transaction. The statute contemplates

that quantities (or value) will normally

be considered insufficient if they are

less than five percent of the aggregate

quantity (or value) of sales of the subject

merchandise to the United States.

For this investigation, we found that

Ispat and Essar each had a viable home

market for HRS. Thus, the home market

is the appropriate comparison market in

this investigation, and we used the

respondents’ submitted home market

sales data for purposes of calculating

NV.

In deriving NV, we made adjustments

as detailed in the Calculation of NV

Based on Home Market Prices and

Calculation of NV Based on CV,

sections below.

B. Affiliated-Party Transactions and

Arm’s-Length Test

Essar reported that it only sold HRS

in the home market to unaffiliated

customers. Therefore, the Department’s

arm’s-length test is inapplicable with

regard to Essar’s home market sales.

Ispat reported that it made home

market sales to other affiliated

companies. We applied the arm’s-length

test to sales from Ispat to these affiliated

companies by comparing them to sales

of identical merchandise from Ispat to

unaffiliated home market customers. If

these affiliated party sales satisfied the

arm’s-length test, we used them in our

analysis. Sales to affiliated customers in

the home market 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. See 19 CFR

351.102.

To test whether these sales were made

at arm’s-length prices, we compared on

a model-specific basis the starting prices

of sales to affiliated and unaffiliated

customers net of all discounts and

rebates, movement charges, direct

selling expenses, and home market

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)

and 62 FR at 27355, Preamble—

Department’s Final Antidumping

Regulations (May 19, 1997).

A. COP Analysis

Concurrent with the filing of the

original petition, the petitioners alleged

that sales of HRS in the home market of

India were made at prices below the

fully absorbed COP, and accordingly,

requested that the Department conduct

a country-wide sales-below-COP

investigation. Based upon the

comparison of the adjusted prices from

the petition for the foreign like product

to its COP, and in accordance with

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

found reasonable grounds to believe or

suspect that sales of HRS manufactured

in India were made at prices below the

COP. See Initiation Notice at 77572. As

a result, the Department has conducted

an investigation to determine whether

Ispat and Essar made sales in the home

market at prices below their respective

COPs during the POI within the

meaning of section 773(b) of the Act. We

conducted the COP analysis described

below.

1. Calculation of COP. In accordance

with section 773(b)(3) of the Act, we

calculated a weighted-average COP for

each respondent based on the sum of

the cost of materials and fabrication for

the foreign like product, plus amounts

for the home market general and

administrative (G&A) expenses and

interest expenses.

We relied on the COP data submitted

by Ispat and Essar in their cost

questionnaire responses, except, as

noted below, in specific instances where

Ispat’s submitted costs were not

appropriately quantified or valued.

a. Changes to Ispat’s Cost of

Production. Based on the information

on the record, it appears that Ispat

reached commercial levels of

production prior to the POI. Therefore,

we disallowed the start-up adjustment

claimed by Ispat. We adjusted the

reported costs to include depreciation

expenses and certain raw material costs

that were omitted. We recalculated

Ispat’s G&A expense ratio using its

company-wide G&A costs from its fiscal

year 2000 audited financial statements.

We adjusted Ispat’s financial expense

ratio to include the net exchange rate

difference and loss on cancellation of

forward contract per its audited

financial statements.

See Calculation Memorandum from

Michael P. Harrison to Neal Halper,

dated April 23, 2001, for a discussion of

the above-referenced adjustments.

2. Test of Home Market Sales Prices.

On a model-specific basis, we compared

the revised COP to the home market

prices, less any applicable discounts

and rebates, movement charges, selling

expenses, commissions, and packing.

We then compared the adjusted

weighted-average COP to the home

market sales of the foreign like product,

as required under section 773(b) of the

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.

3. Results of the COP Test. Pursuant

to section 773(b)(2)(C) of the 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 that product

because we determined that the belowcost 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

22162 Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices

sales to have been made in ‘‘substantial

quantities’’ within an extended period

of time in accordance with section

773(b)(2)(B) or the Act. In such cases,

because we compared prices to POI

average costs, we also determined that

such sales were not made at prices that

would permit recovery of all costs

within a reasonable period of time, in

accordance with section 773(b)(2)(D) of

the Act. Therefore, we disregarded the

below-cost sales.

We found that, for certain models of

HRS, more than 20 percent of the home

market sales by Ispat and Essar 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

Act.

D. Calculation of NV Based on Home

Market Prices

We based home market prices on the

packed prices to unaffiliated purchasers

in India. We adjusted, where applicable,

the starting price for discounts and

rebates. We made adjustments for any

differences in packing, in accordance

with section 773(a)(6)(A) and

773(a)(6)(B)(i) of the Act, and we

deducted movement expenses and

domestic brokerage and handling,

pursuant to section 773(a)(6)(B)(ii) of

the Act. In addition, where applicable,

we made adjustments for differences in

circumstances of sale (COS) pursuant to

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

movement expenses (foreign inland

freight and warehousing). We also made

COS adjustments, where applicable, by

deducting direct selling expenses

incurred for home market sales (credit

expense and warranty) and adding U.S.

direct selling expenses. We also made

adjustments, pursuant to 19 CFR

351.410(e), for indirect selling expenses

incurred on comparison-market or U.S.

sales where commissions were granted

on sales in one market but not in the

other (the commission offset). No other

adjustments to NV were claimed or

allowed.

E. Calculation of NV Based on CV

Section 773(a)(4) of the Act provides

that, where NV cannot be based on

comparison-market sales, NV may be

based on CV. Accordingly, for those

models of HRS for which we could not

determine the NV based on comparisonmarket sales, either because there were

no sales of a comparable product or all

sales of the comparison products failed

the COP test, we based NV on CV.

F. Level of Trade (LOT)/CEP Offset

In accordance with section

773(a)(1)(B) of the Act, to the extent

practicable, we determine NV based on

sales in the comparison market at the

same LOT as the U.S. transaction (in

this case EP transactions). 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 sales, the U.S. LOT is also

the level of the starting-price sale,

which is usually from exporter to

importer.

To determine whether NV sales are at

a different LOT than EP transactions, 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 Act.

In implementing these principles in

this investigation, we obtained

information from the respondents about

the marketing stages involved in the

reported U.S. and home market sales,

including a description of the selling

activities performed by the respondents

for each channel of distribution. In

identifying LOTs for EP and home

market sales, we considered the selling

functions reflected in the starting price

before any adjustments. In this

investigation, neither Ispat nor Essar

requested a LOT adjustment.

Ispat. Ispat reported that it sold

subject merchandise to three different

types of customers (end users, service

centers, and trading companies through

three separate channels of distribution)

in the home market. Further, Ispat

indicated that, for each of the reported

channels of distribution, it provided the

same types of selling functions (market

research, sales calls, interactions with

customers, inventory maintenance,

freight, and technical advice) at the

same levels of intensity. Since all three

types of Ispat’s customers received the

same selling functions, at the same

levels of intensity, we determine that

there is a single LOT in the home

market with respect to Ispat.

Ispat also reported that it made EP

sales of subject merchandise to a single

type of customer (trading companies)

through a single channel of distribution

in the U.S. market. Further, Ispat

indicated that it performed certain types

of selling functions (pre- and post-sale

customer visits, order processing,

inventory maintenance, technical

advice, freight arrangements, warranty

services, and advertising) for the U.S.

customers. As a result, we preliminary

determine that there is a single level of

trade with respect to Ispat’s EP sales.

We then compared the LOT for Ispat’s

EP sales to the home market LOT and

found that its EP sales are provided at

the same LOT as its home market sales.

Thus, no LOT adjustment is warranted,

and we have not made a LOT

adjustment for Ispat’s sales.

Essar. Essar reported that it sold

subject merchandise to two different

types of customers (end users and

service centers through two separate

channels of distribution) in the home

market. Further, it indicated that, for

each of the reported channels of

distribution, it provided the same types

of selling functions (price negotiation,

sales calls, interactions with customers,

inventory maintenance, freight, and

warranty services) at the same levels of

intensity. Since both types of Essar’s

customers received the same selling

functions, at the same levels of

intensity, we determine that there is a

single LOT in the home market with

respect to Essar.

Essar further reported that it made EP

sales of subject merchandise to a single

type of customer (trading companies)

through a single channel of distribution

in the U.S. market. Further, Essar

indicated that it provided certain types

of selling functions (price negotiation,

processing orders, freight and delivery

arrangements, inventory maintenance,

sales calls and visits, credit and

payment collection, and warranty

services) for the U.S. customers. As a

result, we preliminary determine that

there is a single level of trade for U.S.

EP sales. We then compared the LOT for

EP sales to the home market LOT and

found that Essar’s EP sales are provided

at the same LOT as its home market

sales. Thus, no LOT adjustment is

warranted, and we have not made a LOT

adjustment for Essar’s sales.

Currency Conversions

We made currency conversions into

U.S. dollars in accordance with section

773A of the Act based on exchange rates

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

as obtained from the Federal Reserve

Bank (the Department’s preferred source

for exchange rates).

Verification

In accordance with section 782(i) of

the Act, we intend to verify all

Federal Register / Vol. 66, No. 86 / Thursday, May 3, 2001 / Notices 22163

information relied upon in making our

final determination.

All Others Rate

Recognizing the impracticality of

examining all producers and exporters

in all cases, section 735(c)(5)(A) of the

Act provides for the use of an ‘‘all

others’’ rate, which is applied to noninvestigated firms. See SAA at 873. This

section states that the all others rate

shall generally be an amount equal to

the weighted average of the weightedaverage dumping margins established

for exporters and producers

individually investigated, excluding any

zero and de minimis margins, and any

margins based entirely upon the facts

available. Therefore, we have

preliminarily assigned to all other

exporters of Indian HRS, an ‘‘all others’’

margin that is the weighted average of

the margins calculated for Ispat and

Essar.

Suspension of Liquidation

In accordance with section 733(d) of

the Act, we are directing the U.S.

Customs Service (Customs Service) to

suspend liquidation of all entries of

HRS from India 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 NV exceeds

EP, as indicated in the chart below. We

will adjust the deposit requirements to

account for any export subsidies found

in the companion countervailing duty

investigation. These suspension-ofliquidation instructions will remain in

effect until further notice. The

weighted-average dumping margins are

as follows:

Manufacturer/exporter Margin

(percent)

Ispat Industries Ltd ..................... 39.36

Essar Steel Ltd ........................... 34.55

All Others .................................... 34.75

Disclosure

The Department will disclose

calculations performed within five days

of the date of publication of this notice

to the parties of the proceedings in these

investigations in accordance with 19

CFR 351.224(b).

International Trade Commission

Notification

In accordance with section 733(f) of

the Act, we have notified the ITC of our

sales at LTFV determination. If our final

antidumping determination is

affirmative, the ITC will determine

whether the imports covered by that

determination 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 determination.

Public Comment

Case briefs for this investigation must

be submitted no later than one week

after the issuance of the verification

reports. Rebuttal briefs must be filed

within five days after the deadline for

submission of case briefs. 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. Further, we would

appreciate it if parties submitting

written comments would provide the

Department with an additional copy of

the public version of any such

comments on diskette.

Section 774 of the Act provides that

the Department will hold a hearing to

afford interested parties an opportunity

to comment on arguments raised in case

or rebuttal briefs, provided that such a

hearing is requested by any interested

party. If a request for a hearing is made

in an investigation, the hearing will

tentatively be held two days after the

deadline for submission of the rebuttal

briefs, at the U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW, Washington, DC 20230. In

the event that the Department receives

requests for hearings from parties to

more than one HRS case, the

Department may schedule a single

hearing to encompass all those cases.

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 within 30 days of the

publication of this notice. Requests

should specify the number of

participants and provide a list of the

issues to be discussed. Oral

presentations will be limited to issues

raised in the briefs.

As noted above, the final

determination will be issued within 135

days after the date of the publication of

the preliminary determination.

This determination is issued and

published pursuant to sections 733(f)

and 777(i)(1) of the Act. Effective

January 20, 2001, Bernard T. Carreau is

fulfilling the duties of Assistant

Secretary for Import Administration.

Dated: April 23, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import

Administration.

[FR Doc. 01–10848 Filed 5–2–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–560–812]

Notice of Preliminary Determination of

Sales at Less Than Fair Value: Certain

Hot-Rolled Carbon Steel Flat Products

From Indonesia

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: May 3, 2001.

FOR FURTHER INFORMATION CONTACT:

Mark Manning or Nova Daly at (202)

482–3936 and (202) 482–0989,

respectively; AD/CVD Enforcement,

Office 4, Group II, Import

Administration, Room 1870,

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 Act)

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to Department of

Commerce (the Department) regulations

refer to the regulations codified at 19

CFR part 351 (2000).

Preliminary Determination

We preliminarily determine that

certain hot-rolled carbon steel flat

products (HRS) from Indonesia 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 Act. The estimated margins of sales

at LTFV are shown in the Suspension of

Liquidation section of this notice.

Case History

This investigation was initiated on

December 4, 2000. 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,