Certain Hot-Rolled Carbon Steel Flat Products From Romania: Preliminary Results of the Antidumping Duty Administrative Review and Notice of Intent to Rescind in Part, 72984-72988 [E5-7081]

Download as PDF 72984 Federal Register / Vol. 70, No. 235 / Thursday, December 8, 2005 / Notices [FR Doc. 05–23805 Filed 12–7–05; 8:45 am] BILLING CODE 3510–33–M DEPARTMENT OF COMMERCE International Trade Administration (A–485–806) Certain Hot–Rolled Carbon Steel Flat Products From Romania: Preliminary Results of the Antidumping Duty Administrative Review and Notice of Intent to Rescind in Part Import Administration, International Trade Administration, Department of Commerce. SUMMARY: The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on Certain Hot– Rolled Carbon Steel Flat Products from Romania. The period of review is November 1, 2003, through October 31, 2004. We preliminarily determine that sales of subject merchandise by Ispat Sidex, S.A. (now known as Mittal Steel Galati, S.A. (MS Galati)1), have been made below normal value. If these preliminary results are adopted in our final results, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on appropriate entries. Interested parties are invited to comment on these preliminary results. Parties that submit comments are requested to submit with each argument (1) a statement of the issue(s) and (2) a brief summary of the argument(s). We will issue the final results no later than 120 days from the publication of this notice. EFFECTIVE DATE: December 8, 2005. FOR FURTHER INFORMATION CONTACT: Dunyako Ahmadu at (202) 482–0198 or David Dirstine at (202) 482–4033, AD/ CVD Operations, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230. SUPPLEMENTARY INFORMATION: AGENCY: Background On November 29, 2001, the Department published an antidumping duty order on certain hot–rolled carbon steel flat products from Romania. See Notice of Amended Final Antidumping Duty Determination and Antidumping Duty Order: Certain Hot–Rolled Carbon 1 On July 15, 2005, we determined that MS Galati was the successor-in-interest to Ispat Sidex, S.A. See Final Results of Antidumping Duty ChangedCircumstances Review: Certain Hot-Rolled Carbon Steel Flat Products from Romania, 70 FR 40982 (July 15, 2005). VerDate Aug<31>2005 16:29 Dec 07, 2005 Jkt 208001 Steel Flat Products From Romania, 66 FR 59566 (November 29, 2001). On November 1, 2004, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on certain hot– rolled carbon steel flat products from Romania for the period November 1, 2003, through October 31, 2004. See Notice of Opportunity to Request Administrative Review of Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation, 69 FR 63359 (November 1, 2004). On November 30, 2004, the Department received three timely requests for an administrative review of this order. The Department received a timely request from Nucor Corporation, a domestic interested party, requesting that the Department conduct an administrative review of shipments exported to the United States from MS Galati and Metalexportimport, S.A. (MEI). In addition, the Department received a timely request from MS Galati, Sidex Trading S.r.l. (Sidex Trading), and Ispat North America Inc. (INA), requesting that the Department conduct an administrative review of subject merchandise produced by MS Galati and exported to the United States by Sidex Trading. Also, the Department received a timely request on behalf of United States Steel Corporation (USSC), the petitioner in this proceeding, to conduct an administrative review of subject merchandise produced or exported by MS Galati or MEI. On December 27, 2004, the Department initiated an administrative review of the antidumping duty order on certain hot–rolled carbon steel flat products from Romania for the period November 1, 2003, through October 31, 2004 (Notice of Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 69 FR 77181 (December 27, 2004)). On July 13, 2005, due to the complexity of the case and pursuant to section 751(c)(3)(A) of the Tariff Act of 1930, as amended (the Act), the Department extended the deadline for the completion of the preliminary results in this administrative review until no later than November 30, 2005. See Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review: Certain Hot–Rolled Carbon Steel Flat Products from Romania, 70 FR 40318 (July 13, 2005). Scope of the Order For purposes of this order, the products covered are certain hot–rolled carbon steel flat products of a PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 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 length, 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 order. The merchandise subject to this order is classified in the HTSUS at the following 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 are covered by this order, 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 customs purposes, the written description of the merchandise subject to this proceeding is dispositive. For further information on the scope of the order, see Certain Hot–Rolled Carbon Steel Flat Products from Romania: Preliminary Results of Antidumping Duty Administrative Review, 69 FR 70644 (December 7, 2004). E:\FR\FM\08DEN1.SGM 08DEN1 Federal Register / Vol. 70, No. 235 / Thursday, December 8, 2005 / Notices Notice of Intent to Rescind in Part In accordance with 19 CFR 351.213(d)(3), we will rescind an administrative review in whole or only with respect to a particular exporter or producer if we conclude that during the period of review there were no entries, exports, or sales of the subject merchandise. MEI submitted a letter indicating that there were no sales or shipments of subject merchandise during the 2003–2004 period of review. We have examined data maintained by CBP and are satisfied that MEI made no shipments during the period of review. We intend to rescind this review at the time of our final results if we continue to find no evidence of sales during the period of review. Verification As provided in section 782(i) of the Act and 19 CFR 351.307, we conducted a home-market cost and sales verification of the questionnaire responses of MS Galati. We used standard verification procedures, including on–site inspection of MS Galati’s production facility. Our cost and home-market sales verification results are outlined in the Memorandum to File, Cost of Production and Constructed Value Data Submitted by Mittal Steel Galati S.A. (formerly known as Ispat Sidex SA) in the Antidumping Duty Administrative Review of Certain Hot–Rolled Carbon Steel Flat Products from Romania, dated November 30, 2005, and Memorandum to the File, Home-Market Sales Verification of Questionnaire Responses Submitted by Mittal Steel Galati S.A. in the 2003– 2004 Antidumping Duty Review of Certain Hot–Rolled Carbon Steel Flat Products from Romania, dated November 30, 2005. The report concerning the verification of MS Galati’s U.S. sales response will be available to the parties and put on the record shortly following the issuance of these preliminary results of review. Public versions of these reports are on file in the Central Records Unit (CRU) located in room B–099 of the main Commerce building. Date of Sale In accordance with 19 CFR 351.401(i), the date of sale will normally be the date of the invoice, as recorded in the exporter’s or producer’s records kept in the ordinary course of business, unless satisfactory evidence is presented that the exporter or producer establishes the material terms of sale on some other date. As such, the date of the invoice is the presumptive date although this presumption may be overcome. VerDate Aug<31>2005 16:29 Dec 07, 2005 Jkt 208001 In the home market, MS Galati reported the date of invoice as the date of sale. For its constructed export–price (CEP) sales in the United States, MS Galati reported the date of INA’s customer order acknowledgment as the date of sale. In the prior review covering November 1, 2002, through October 30, 2003, MS Galati had reported the date of invoice as the date of sale for U.S. sales. In response to the Department’s June 14, 2005, supplemental questionnaire requesting an explanation of the change in practice, MS Galati stated that, previously, sales were made by Ispat Sidex directly to its U.S. customers (INA was not involved in sales of subject merchandise made by Ispat Sidex) and there was no such similar document—a customer order acknowledgment —used for such sales. MS Galati also stated that its first sales of subject merchandise during the period of review were made after March 2004. According to MS Galati, these sales were made using the customer order acknowledgment INA issued to unaffiliated U.S. customers. MS Galati also indicated that INA’s customer order acknowledgments contained language which made the prices and quantities final. It also provided sample cover letters sent with the customer order acknowledgment, INA’s customer terms and conditions, and affidavits of employees as evidence of notice of the change in INA’s business practice. Based on our review of INA’s customer order acknowledgments during the verifications we conducted at MS Galati’s headquarters in Romania along with our close examination of the customer order acknowledgments INA placed on the record in MS Galati’s response to our supplemental questionnaire, we conclude that all substantive terms of sale, i.e., price, quantity, terms of delivery, and payment, were fixed and not susceptible to change after the date of INA’s customer order acknowledgment. As such, we conclude that MS Galati has provided satisfactory evidence to support its assertion that the material terms of sale are fixed at the time of INA’s customer order acknowledgment and, for these preliminary results, we have used the date of the customer order acknowledgment as the appropriate date of sale for reporting U.S. sales. Fair–Value Comparisons To determine whether MS Galati’s sales of the subject merchandise from Romania to the United States were made at prices below normal value, we compared the CEP to the normal value, as described in the ‘‘Constructed Export Price’’ and ‘‘Normal Value’’ sections of PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 72985 this notice. Therefore, pursuant to section 777A(d)(2), we compared the CEPs of individual U.S. transactions to the monthly weighted–average normal value of the foreign like product where there were sales made in the ordinary course of trade. Product Comparisons In accordance with section 771(i) of the Act, we considered all products within the ‘‘Scope of the Order’’ section above which were produced and sold by MS Galati in the home market during the period of review to be foreign like product for the purpose of determining appropriate product comparisons to U.S. sales of subject merchandise. We relied on the following eleven characteristics to match U.S. sales of subject merchandise to comparison sales of the foreign like product: 1) painted; 2) quality; 3) carbon content; 4) yield strength; 5) thickness; 6) width; 7) form; 8) temper rolled; 9) pickled; 10) edge trim; and 11) 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 most similar foreign like product on the basis of the characteristics and reporting instructions we identified in our questionnaire. See Appendix V of the Department’s antidumping duty questionnaire to MS Galati dated January 21, 2005. Constructed Export Price In accordance with section 772(b) of the Act, CEP is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter, as adjusted under sections 772(c) and (d). For purposes of this administrative review, we have treated sales by MS Galati as CEP transactions because MS Galati’s U.S. affiliate, INA, made the first sale to an unaffiliated party in the United States. Therefore, we based CEP on the packed duty–paid prices to unaffiliated purchasers in the United States in accordance with sections 772(b), (c), and (d) of the Act. We made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act. These deductions included foreign inland freight from the plant to the port of export, foreign brokerage and handling, international freight, marine insurance, U.S. brokerage and handling, other U.S. transportation expenses (i.e., U.S. stevedoring, wharfage, and E:\FR\FM\08DEN1.SGM 08DEN1 72986 Federal Register / Vol. 70, No. 235 / Thursday, December 8, 2005 / Notices surveying), and U.S. customs duty. In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (i.e., imputed credit expenses) and indirect selling expenses. We revised the calculation of U.S. credit expense from the amount MS Galati claimed to reflect the seller’s cost of extending credit between the date of shipment from Romania and final payment from the first unaffiliated customer. Credit expense is the interest expense incurred (or interest revenue foregone) between shipment of merchandise to a customer and receipt of payment from the customer. Inventory carrying costs are the interest expenses incurred (or interest revenue foregone) between the time the merchandise leaves the production line at the factory to the time the goods are shipped to the first unaffiliated customer. In CEP cases where the merchandise does not enter inventory of a U.S. affiliate in the United States prior to sale to an unaffiliated U.S. customer, the Department calculates the credit period from the time the merchandise is shipped from the producer’s country to the date of payment. See, e.g., Notice of Final Results of Antidumping Duty Administrative Review: Carbon and Certain Alloy Steel Wire Rod from Trinidad and Tobago, 70 FR 12648 (March 15, 2005), and accompanying Issues and Decision Memorandum at Comment 6. For these CEP sales, we also made an adjustment for profit in accordance with section 772(d)(3) of the Act. We deducted the profit allocated to expenses deducted under sections 772(d)(1) and 772(d)(2) in accordance with sections 772(d)(3) and 772(f) of the Act. In accordance with section 772(f) of the Act, we computed profit based on total revenue realized on sales in both the U.S. and home markets, less all expenses associated with those sales. We then allocated profit to expenses incurred with respect to U.S. economic activity based on the ratio of total U.S. expenses to total expenses for both the U.S. and home markets. Normal Value A. Home-Market Viability We compared the aggregate volume of home-market sales of the foreign like product and U.S. sales of the subject merchandise to determine whether the volume of the foreign like product sold in Romania was sufficient, pursuant to section 773(a)(1)(c) of the Act, to form a basis for normal value. Because the VerDate Aug<31>2005 16:29 Dec 07, 2005 Jkt 208001 volume of home-market sales of the foreign like product was greater than five percent of the U.S. sales of subject merchandise, in accordance with section 773(a)(1)(B)(i) of the Act, we have based the determination of normal value upon the home-market sales of the foreign like product. Thus, we used as normal value the prices at which the foreign like product was first sold for consumption in Romania, in the usual commercial quantities, in the ordinary course of trade, and, to the extent possible, at the same level of trade as the CEP sales, as appropriate. After testing home-market viability, we calculated normal value as discussed in the ‘‘Price-to-Price Comparisons’’ section of this notice. B. Cost-of-Production Analysis On March 31, 2005, USSC submitted an allegation that home-market sales by the former Ispat Sidex, now MS Galati, were at prices below the cost of production. Upon review of USSC’s allegation, we found reasonable grounds to believe or suspect that MS Galati made sales at below the cost of production so we initiated a salesbelow-cost investigation on May 24, 2005, and instructed MS Galati to provide cost-of-production information concerning its sales. The Department has now conducted an investigation to determine whether MS Galati made home-market sales at prices below the cost of production during the period of review within the meaning of section 773(b) of the Act. In accordance with section 773(b)(3) of the Act, we calculated a weightedaverage cost of production based on the sum of the cost of materials and fabrication for the foreign like product plus amounts for home-market general and administrative (G&A) expenses, interest expenses, and packing expenses. We relied on the cost-ofproduction data MS Galati submitted in its questionnaire responses with the following exceptions: - We disallowed the claimed offset to G&A expenses for the reversal of a certain provision. This amount is not actual income for the company but rather is a reversal of a provision for expenses accrued prior to the period of review. Since the reversal of the provision does not appear to relate to current period costs, we do not consider it appropriate to offset the current period costs with this reversal. See Memorandum to Neal Halper, Director Office of Accounting: Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results Mittal Steel PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 Galati dated November 30, 2005. - We adjusted the transfer prices for certain inputs MS Galati purchased from affiliated suppliers to reflect the higher of the transfer price or the market price pursuant to section 773(f)(2) of the Act. Id. - We adjusted MS Galati’s reported cost of manufacturing to include two accounts which MS Galati used to offset its cost of manufacturing. These two accounts were also reported in the sales listing for the home market. Id. We then compared the weightedaverage cost of production for MS Galati to its home-market sales prices of the foreign like product, as required under section 773(b) of the Act, to determine whether these sales had been made at prices below the cost of production 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. On a model-specific basis, we compared the revised cost of production to the home-market prices, less any applicable movement charges and direct and indirect selling expenses. We disregarded below-cost sales where 20 percent or more of MS Galati’s sales of a given product during the period of review were made at prices below the cost of production and, thus, such sales were made within an extended period of time in substantial quantities in accordance with sections 773(b)(2)(B) and (c) of the Act, and where, based on comparisons of the price to the weighted-average cost of production for the period of review, we determined that the below-cost sales of the product were at prices which would not permit recovery of all costs within a reasonable time period, in accordance with section 773(b)(2)(D) of the Act. C. Arm’s-Length Test MS Galati reported that it made sales in the home market to affiliated and unaffiliated customers. The Department did not require MS Galati to report its affiliated party’s downstream sales because these sales represented less than five percent of total home-market sales. We excluded sales to affiliated customers in the home market not made in the ordinary course of trade from our analysis pursuant to section 773(a)(1)(B)(i) of the Act. To determine whether sales to affiliated customers were made in the ordinary course of trade, we tested whether sales to each affiliated customer were made at arm’s length. As such, we compared the starting prices of sales to affiliated and unaffiliated customers net of all billing E:\FR\FM\08DEN1.SGM 08DEN1 Federal Register / Vol. 70, No. 235 / Thursday, December 8, 2005 / Notices adjustments, movement charges, direct selling expenses, discounts, and packing. Where the price to that affiliated party was, on average, within a range of 98 to 102 percent of the price of the same or comparable merchandise sold to the unaffiliated parties at the same level of trade, we determined that the sales made to the affiliated party were at arm’s length, consistent with Antidumping Proceedings—Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 (November 15, 2002). D. Price-to-Price Comparisons We based normal value on the homemarket sales to unaffiliated purchasers and sales to affiliated customers that passed the arm’s-length test. We adjusted gross unit price for reported freight revenue. We made adjustments for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. We made adjustments for movement expenses (i.e., inland freight from plant to distribution warehouse and warehousing expenses) in accordance with section 773(a)(6)(B) of the Act. We made circumstance-of-sale adjustments for imputed credit, where appropriate, in accordance with section 773(a)(6)(C)(iii) of the Act. In accordance with section 773(a)(6) of the Act, we deducted home-market packing costs and added U.S. packing costs. Level of Trade In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, we determine normal value based on sales in the comparison market at the same level of trade as the CEP transaction. See also 19 CFR 351.412. The normal-value level of trade is the level of the starting-price sales in the comparison market or, when normal value is based on constructed value, the level of the sales from which we derive selling, general and administrative expenses and profits. For CEP sales, the U.S. level of trade is the level of the constructed sale from the exporter to the affiliated importer. See 19 CFR 351.412(c)(1). To determine whether home-market sales are at a different level of trade than CEP sales, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the home-market sales are at a different level of trade than CEP sales and the difference affects price comparability, as manifested in a pattern of consistent price differences between sales on which normal value is based and home-market sales at the VerDate Aug<31>2005 16:29 Dec 07, 2005 Jkt 208001 level of trade of the export transaction, we make a level-of-trade adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the normal-value level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in levels between normal value and CEP affects price comparability, we adjust normal value under section 773(a)(7)(B) of the Act (the CEP offset). See Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 (November 19, 1997). In this review, we obtained information from MS Galati regarding the marketing stages involved in sales to the reported home and U.S. markets. MS Galati reported that it sells to unaffiliated distributors and end-users in Romania as well as to affiliated endusers for consumption and affiliated distributors. In the United States, MS Galati had sales to an affiliate, INA, that resold the merchandise to unaffiliated customers. MS Galati reported one level of trade in the home market with the following three channels of distribution: 1) direct sales to customers; 2) consignment sales; 3) sales through its affiliated warehouse. Home-market sales were made to two classes of customers, endusers and distributors. Along with MS Galati’s home-market sales of merchandise stored at its affiliated warehouse, MS Galati also had sales to affiliated end-users for consumption. Based on our review of evidence on the record, we find that home-market sales through the three channels of distribution to both customer categories, whether affiliated or not, were substantially similar with respect to selling functions and stages of marketing. MS Galati performed the same selling functions at the same level for sales to all home-market customers. Accordingly, we preliminarily find that MS Galati had only one level of trade for its home-market sales. MS Galati reported one CEP level of trade with one channel of distribution in the United States which consists of its U.S. affiliate’s direct sales to endusers and distributors of merchandise shipped directly from Romania. As such, we preliminarily determine that MS Galati made CEP sales to the United States through one channel of distribution—direct sales to end-users and distributors. For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and CEP profit under section 772(d) of the Act. Accordingly, we reviewed the selling PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 72987 functions and services MS Galati reported it performed on CEP sales and we have determined that the selling functions performed on all CEP sales were identical. Therefore, we preliminarily determine that there is one CEP level of trade in the U.S. market. We then compared the selling functions performed by MS Galati on its CEP sales (after deductions) to the selling functions it provided in the home market. We found that MS Galati performs more selling functions for its home-market sales than those it provides to its U.S. affiliate, INA. MS Galati reported that it provided minimal selling functions and services for the CEP level of trade and that, therefore, the home-market level of trade is more advanced than the CEP level of trade. Based on our analysis of the channels of distribution and MS Galati’s selling functions for sales in the home market and CEP sales in the U.S. market, we preliminarily find that the home-market level of trade is at a more advanced stage of distribution when compared to CEP sales because MS Galati provides many selling functions in the home market at a higher level of service as compared to selling functions it performed for its CEP sales. We examined whether a level-of-trade adjustment or CEP offset may be appropriate. In this case, MS Galati sold at one level of trade in the home market. Therefore, there is no information available to determine a pattern of consistent price differences between the sales on which we base normal value and the home-market sales at the level of trade of the export transaction, in accordance with our normal methodology as described above. See 19 CFR 351.412(d). We do not have record information which would allow us to examine pricing patterns based on MS Galati’s sales of other products, and there are no other respondents or other record information on which such as analysis could be based. Accordingly, because the data available do not provide an appropriate basis for making a level-of-trade adjustment but the level of trade in the home market is at a more advanced state of distribution than the level of trade of the CEP transactions, we made a CEP-offset adjustment to normal value in accordance with section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). To calculate the CEP offset, we deducted the home-market indirect selling expenses from normal value for home-market sales that we compared to U.S. CEP sales. As such, we limited the deduction for home-market indirect selling expenses by the amount of the E:\FR\FM\08DEN1.SGM 08DEN1 72988 Federal Register / Vol. 70, No. 235 / Thursday, December 8, 2005 / Notices indirect selling expenses we deducted in calculating the CEP as required under section 772(d)(1)(D) of the Act. Currency Conversion We made currency conversions pursuant to 19 CFR 351.415 based on the rates certified by the Federal Reserve Bank. Preliminary Results of Review We preliminarily determine that the weighted-average dumping margin for MS Galati during the period November 1, 2003, through October 31, 2004, is 0.94 percent. Pursuant to 19 CFR 351.224(b), the Department will disclose to parties calculations performed in connection with these preliminary results within five days of the date of publication of this notice. Any interested party may request a hearing within 30 days of publication of this notice. If requested, a hearing will be held at the main Department building. We will notify parties of the exact date, time, and place for any such hearing. Issues raised in the hearing will be limited to those raised in the respective case and rebuttal briefs. Case briefs from interested parties may be filed no later than 30 days after publication of this notice. Rebuttal briefs, limited to the issues raised in case briefs, may be submitted no later than five days after the deadline for filing case briefs. Parties who submit case or rebuttal briefs in this proceeding are requested to submit with each argument a statement of the issue and a brief summary of the argument with an electronic version included. The Department will publish a notice of final results of this administrative review, which will include the results of its analysis of issues raised in the case briefs, within 120 days from the date of publication of these preliminary results. Assessment Pursuant to 19 CFR 351.212(b), the Department calculates an assessment rate for each importer of the subject merchandise. Upon issuance of the final results of this review, if any importerspecific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.50 percent), we will issue appraisement instructions directly to CBP to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise. To determine whether the duty-assessment rate covering the period is de minimis, in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we have calculated an importer-specific assessment ad VerDate Aug<31>2005 16:29 Dec 07, 2005 Jkt 208001 valorem rate by aggregating the dumping margins calculated for all U.S. sales to the sole importer of MS Galati’s subject merchandise and dividing this amount by the total entered value of the sales to that importer. Where the importer-specific ad valorem rate is greater than de minimis and because the respondent has reported reliable entered values, we will instruct CBP to apply the assessment rate to the entered value of the importer’s entries during the period of review. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of this review. Cash-Deposit Requirements The following cash-deposit rates will be effective upon publication of the final results of this review for all shipments of certain hot-rolled carbon steel flat products from Romania entered, or withdrawn from warehouse, for consumption on or after publication date, as provided by section 751(a)(2)(C) of the Act: (1) for subject merchandise produced or exported by MS Galati, the cash-deposit rate will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not covered in this review, the cash-deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the original antidumping duty investigation, but the manufacturer is, the cashdeposit rate will be the rate established in the most recent period for the manufacturer of the merchandise; (4) if neither the exporter nor the manufacturer is a firm covered in this or any previous administrative review or in the original less-than-fair-value investigation, the cash-deposit rate will be 17.84 percent, the ‘‘All Others’’ rate made effective on June 14, 2005. See Certain Hot-Rolled Carbon Steel Flat Products From Romania: Final Results of Antidumping Duty Administrative Review, 70 FR 34448 (June 14, 2005). These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review. Notification to Importers This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during these review periods. Failure to comply with this requirement could result in the PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 Secretary’s presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties. This notice is published in accordance with sections 751(a)(1) and 777(i)(1) of the Act. Dated: November 30, 2005. Stephen J. Claeys, Assistant Secretary for Import Administration. [FR Doc. E5–7081 Filed 12–7–05; 8:45 am] Billing Code: 3510–DS–S DEPARTMENT OF COMMERCE International Trade Administration [A–427–814] Notice of Extension of Time Limit for Final Results of Antidumping Duty Administrative Review: Stainless Steel Sheet and Strip in Coils From France Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: December 8, 2005. FOR FURTHER INFORMATION CONTACT: Elfi Blum-Page or Sean Carey, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482–0197 or (202) 482– 3964, respectively. SUPPLEMENTARY INFORMATION: AGENCY: Background On August 8, 2005, the Department published the preliminary results of the administrative review of the antidumping duty order on stainless steel sheet and strip in coils (SSSS) from France for the period of July 1, 2003, through June 30, 2004 (see Preliminary Results of Antidumping Duty Administrative Review: Stainless Steel Sheet and Strip in Coils from France, 70 FR 45668 (August 8, 2005) (Preliminary Results)). The current deadline for the final results of this review is December 6, 2005. Extension of Time Limit for Final Results of Review Section 751(a)(3)(A) of the Tariff Act of 1930, as amended (the Act), requires the Department of Commerce (the Department) to issue the final results in an administrative review within 120 days of the date on which the preliminary results were published. However, if it is not practicable to complete the review within this time period, section 751(a)(3)(A) of the Act E:\FR\FM\08DEN1.SGM 08DEN1

Agencies

[Federal Register Volume 70, Number 235 (Thursday, December 8, 2005)]
[Notices]
[Pages 72984-72988]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-7081]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-485-806)


Certain Hot-Rolled Carbon Steel Flat Products From Romania: 
Preliminary Results of the Antidumping Duty Administrative Review and 
Notice of Intent to Rescind in Part

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on Certain Hot-
Rolled Carbon Steel Flat Products from Romania. The period of review is 
November 1, 2003, through October 31, 2004. We preliminarily determine 
that sales of subject merchandise by Ispat Sidex, S.A. (now known as 
Mittal Steel Galati, S.A. (MS Galati)\1\), have been made below normal 
value. If these preliminary results are adopted in our final results, 
we will instruct U.S. Customs and Border Protection (CBP) to assess 
antidumping duties on appropriate entries. Interested parties are 
invited to comment on these preliminary results. Parties that submit 
comments are requested to submit with each argument (1) a statement of 
the issue(s) and (2) a brief summary of the argument(s). We will issue 
the final results no later than 120 days from the publication of this 
notice.
---------------------------------------------------------------------------

    \1\ On July 15, 2005, we determined that MS Galati was the 
successor-in-interest to Ispat Sidex, S.A. See Final Results of 
Antidumping Duty Changed-Circumstances Review: Certain Hot-Rolled 
Carbon Steel Flat Products from Romania, 70 FR 40982 (July 15, 
2005).

---------------------------------------------------------------------------
EFFECTIVE DATE: December 8, 2005.

FOR FURTHER INFORMATION CONTACT: Dunyako Ahmadu at (202) 482-0198 or 
David Dirstine at (202) 482-4033, AD/CVD Operations, Office 5, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.

SUPPLEMENTARY INFORMATION:

Background

    On November 29, 2001, the Department published an antidumping duty 
order on certain hot-rolled carbon steel flat products from Romania. 
See Notice of Amended Final Antidumping Duty Determination and 
Antidumping Duty Order: Certain Hot-Rolled Carbon Steel Flat Products 
From Romania, 66 FR 59566 (November 29, 2001).
    On November 1, 2004, the Department published a notice of 
opportunity to request an administrative review of the antidumping duty 
order on certain hot-rolled carbon steel flat products from Romania for 
the period November 1, 2003, through October 31, 2004. See Notice of 
Opportunity to Request Administrative Review of Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation, 69 FR 
63359 (November 1, 2004). On November 30, 2004, the Department received 
three timely requests for an administrative review of this order. The 
Department received a timely request from Nucor Corporation, a domestic 
interested party, requesting that the Department conduct an 
administrative review of shipments exported to the United States from 
MS Galati and Metalexportimport, S.A. (MEI). In addition, the 
Department received a timely request from MS Galati, Sidex Trading 
S.r.l. (Sidex Trading), and Ispat North America Inc. (INA), requesting 
that the Department conduct an administrative review of subject 
merchandise produced by MS Galati and exported to the United States by 
Sidex Trading. Also, the Department received a timely request on behalf 
of United States Steel Corporation (USSC), the petitioner in this 
proceeding, to conduct an administrative review of subject merchandise 
produced or exported by MS Galati or MEI.
    On December 27, 2004, the Department initiated an administrative 
review of the antidumping duty order on certain hot-rolled carbon steel 
flat products from Romania for the period November 1, 2003, through 
October 31, 2004 (Notice of Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 69 FR 77181 (December 27, 2004)).
    On July 13, 2005, due to the complexity of the case and pursuant to 
section 751(c)(3)(A) of the Tariff Act of 1930, as amended (the Act), 
the Department extended the deadline for the completion of the 
preliminary results in this administrative review until no later than 
November 30, 2005. See Notice of Extension of Time Limit for 
Preliminary Results of Antidumping Duty Administrative Review: Certain 
Hot-Rolled Carbon Steel Flat Products from Romania, 70 FR 40318 (July 
13, 2005).

Scope of the Order

    For purposes of this order, 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 length, 
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 
order. The merchandise subject to this order is classified in the HTSUS 
at the following 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 are covered by this order, 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 customs purposes, the 
written description of the merchandise subject to this proceeding is 
dispositive. For further information on the scope of the order, see 
Certain Hot-Rolled Carbon Steel Flat Products from Romania: Preliminary 
Results of Antidumping Duty Administrative Review, 69 FR 70644 
(December 7, 2004).

[[Page 72985]]

Notice of Intent to Rescind in Part

    In accordance with 19 CFR 351.213(d)(3), we will rescind an 
administrative review in whole or only with respect to a particular 
exporter or producer if we conclude that during the period of review 
there were no entries, exports, or sales of the subject merchandise. 
MEI submitted a letter indicating that there were no sales or shipments 
of subject merchandise during the 2003-2004 period of review. We have 
examined data maintained by CBP and are satisfied that MEI made no 
shipments during the period of review. We intend to rescind this review 
at the time of our final results if we continue to find no evidence of 
sales during the period of review.

Verification

    As provided in section 782(i) of the Act and 19 CFR 351.307, we 
conducted a home-market cost and sales verification of the 
questionnaire responses of MS Galati. We used standard verification 
procedures, including on-site inspection of MS Galati's production 
facility. Our cost and home-market sales verification results are 
outlined in the Memorandum to File, Cost of Production and Constructed 
Value Data Submitted by Mittal Steel Galati S.A. (formerly known as 
Ispat Sidex SA) in the Antidumping Duty Administrative Review of 
Certain Hot-Rolled Carbon Steel Flat Products from Romania, dated 
November 30, 2005, and Memorandum to the File, Home-Market Sales 
Verification of Questionnaire Responses Submitted by Mittal Steel 
Galati S.A. in the 2003-2004 Antidumping Duty Review of Certain Hot-
Rolled Carbon Steel Flat Products from Romania, dated November 30, 
2005. The report concerning the verification of MS Galati's U.S. sales 
response will be available to the parties and put on the record shortly 
following the issuance of these preliminary results of review. Public 
versions of these reports are on file in the Central Records Unit (CRU) 
located in room B-099 of the main Commerce building.

Date of Sale

    In accordance with 19 CFR 351.401(i), the date of sale will 
normally be the date of the invoice, as recorded in the exporter's or 
producer's records kept in the ordinary course of business, unless 
satisfactory evidence is presented that the exporter or producer 
establishes the material terms of sale on some other date. As such, the 
date of the invoice is the presumptive date although this presumption 
may be overcome.
    In the home market, MS Galati reported the date of invoice as the 
date of sale. For its constructed export-price (CEP) sales in the 
United States, MS Galati reported the date of INA's customer order 
acknowledgment as the date of sale. In the prior review covering
    November 1, 2002, through October 30, 2003, MS Galati had reported 
the date of invoice as the date of sale for U.S. sales. In response to 
the Department's June 14, 2005, supplemental questionnaire requesting 
an explanation of the change in practice, MS Galati stated that, 
previously, sales were made by Ispat Sidex directly to its U.S. 
customers (INA was not involved in sales of subject merchandise made by 
Ispat Sidex) and there was no such similar document--a customer order 
acknowledgment --used for such sales. MS Galati also stated that its 
first sales of subject merchandise during the period of review were 
made after March 2004. According to MS Galati, these sales were made 
using the customer order acknowledgment INA issued to unaffiliated U.S. 
customers. MS Galati also indicated that INA's customer order 
acknowledgments contained language which made the prices and quantities 
final. It also provided sample cover letters sent with the customer 
order acknowledgment, INA's customer terms and conditions, and 
affidavits of employees as evidence of notice of the change in INA's 
business practice.
    Based on our review of INA's customer order acknowledgments during 
the verifications we conducted at MS Galati's headquarters in Romania 
along with our close examination of the customer order acknowledgments 
INA placed on the record in MS Galati's response to our supplemental 
questionnaire, we conclude that all substantive terms of sale, i.e., 
price, quantity, terms of delivery, and payment, were fixed and not 
susceptible to change after the date of INA's customer order 
acknowledgment. As such, we conclude that MS Galati has provided 
satisfactory evidence to support its assertion that the material terms 
of sale are fixed at the time of INA's customer order acknowledgment 
and, for these preliminary results, we have used the date of the 
customer order acknowledgment as the appropriate date of sale for 
reporting U.S. sales.

Fair-Value Comparisons

    To determine whether MS Galati's sales of the subject merchandise 
from Romania to the United States were made at prices below normal 
value, we compared the CEP to the normal value, as described in the 
``Constructed Export Price'' and ``Normal Value'' sections of this 
notice. Therefore, pursuant to section 777A(d)(2), we compared the CEPs 
of individual U.S. transactions to the monthly weighted-average normal 
value of the foreign like product where there were sales made in the 
ordinary course of trade.

Product Comparisons

    In accordance with section 771(i) of the Act, we considered all 
products within the ``Scope of the Order'' section above which were 
produced and sold by MS Galati in the home market during the period of 
review to be foreign like product for the purpose of determining 
appropriate product comparisons to U.S. sales of subject merchandise. 
We relied on the following eleven characteristics to match U.S. sales 
of subject merchandise to comparison sales of the foreign like product: 
1) painted; 2) quality; 3) carbon content; 4) yield strength; 5) 
thickness; 6) width; 7) form; 8) temper rolled; 9) pickled; 10) edge 
trim; and 11) 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 most similar foreign like product on the 
basis of the characteristics and reporting instructions we identified 
in our questionnaire. See Appendix V of the Department's antidumping 
duty questionnaire to MS Galati dated January 21, 2005.

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under sections 772(c) and 
(d). For purposes of this administrative review, we have treated sales 
by MS Galati as CEP transactions because MS Galati's U.S. affiliate, 
INA, made the first sale to an unaffiliated party in the United States. 
Therefore, we based CEP on the packed duty-paid prices to unaffiliated 
purchasers in the United States in accordance with sections 772(b), 
(c), and (d) of the Act. We made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These deductions 
included foreign inland freight from the plant to the port of export, 
foreign brokerage and handling, international freight, marine 
insurance, U.S. brokerage and handling, other U.S. transportation 
expenses (i.e., U.S. stevedoring, wharfage, and

[[Page 72986]]

surveying), and U.S. customs duty. In accordance with section 772(d)(1) 
of the Act, we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (i.e., imputed credit expenses) and indirect selling expenses.
    We revised the calculation of U.S. credit expense from the amount 
MS Galati claimed to reflect the seller's cost of extending credit 
between the date of shipment from Romania and final payment from the 
first unaffiliated customer. Credit expense is the interest expense 
incurred (or interest revenue foregone) between shipment of merchandise 
to a customer and receipt of payment from the customer. Inventory 
carrying costs are the interest expenses incurred (or interest revenue 
foregone) between the time the merchandise leaves the production line 
at the factory to the time the goods are shipped to the first 
unaffiliated customer. In CEP cases where the merchandise does not 
enter inventory of a U.S. affiliate in the United States prior to sale 
to an unaffiliated U.S. customer, the Department calculates the credit 
period from the time the merchandise is shipped from the producer's 
country to the date of payment. See, e.g., Notice of Final Results of 
Antidumping Duty Administrative Review: Carbon and Certain Alloy Steel 
Wire Rod from Trinidad and Tobago, 70 FR 12648 (March 15, 2005), and 
accompanying Issues and Decision Memorandum at Comment 6.
    For these CEP sales, we also made an adjustment for profit in 
accordance with section 772(d)(3) of the Act. We deducted the profit 
allocated to expenses deducted under sections 772(d)(1) and 772(d)(2) 
in accordance with sections 772(d)(3) and 772(f) of the Act. In 
accordance with section 772(f) of the Act, we computed profit based on 
total revenue realized on sales in both the U.S. and home markets, less 
all expenses associated with those sales. We then allocated profit to 
expenses incurred with respect to U.S. economic activity based on the 
ratio of total U.S. expenses to total expenses for both the U.S. and 
home markets.

Normal Value

A. Home-Market Viability

    We compared the aggregate volume of home-market sales of the 
foreign like product and U.S. sales of the subject merchandise to 
determine whether the volume of the foreign like product sold in 
Romania was sufficient, pursuant to section 773(a)(1)(c) of the Act, to 
form a basis for normal value. Because the volume of home-market sales 
of the foreign like product was greater than five percent of the U.S. 
sales of subject merchandise, in accordance with section 
773(a)(1)(B)(i) of the Act, we have based the determination of normal 
value upon the home-market sales of the foreign like product. Thus, we 
used as normal value the prices at which the foreign like product was 
first sold for consumption in Romania, in the usual commercial 
quantities, in the ordinary course of trade, and, to the extent 
possible, at the same level of trade as the CEP sales, as appropriate. 
After testing home-market viability, we calculated normal value as 
discussed in the ``Price-to-Price Comparisons'' section of this notice.

B. Cost-of-Production Analysis

    On March 31, 2005, USSC submitted an allegation that home-market 
sales by the former Ispat Sidex, now MS Galati, were at prices below 
the cost of production. Upon review of USSC's allegation, we found 
reasonable grounds to believe or suspect that MS Galati made sales at 
below the cost of production so we initiated a sales-below-cost 
investigation on May 24, 2005, and instructed MS Galati to provide 
cost-of-production information concerning its sales.
    The Department has now conducted an investigation to determine 
whether MS Galati made home-market sales at prices below the cost of 
production during the period of review within the meaning of section 
773(b) of the Act.
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average cost of production based on the sum of the cost of 
materials and fabrication for the foreign like product plus amounts for 
home-market general and administrative (G&A) expenses, interest 
expenses, and packing expenses. We relied on the cost-of-production 
data MS Galati submitted in its questionnaire responses with the 
following exceptions:
    - We disallowed the claimed offset to G&A expenses for the reversal 
of a certain provision. This amount is not actual income for the 
company but rather is a reversal of a provision for expenses accrued 
prior to the period of review. Since the reversal of the provision does 
not appear to relate to current period costs, we do not consider it 
appropriate to offset the current period costs with this reversal. See 
Memorandum to Neal Halper, Director Office of Accounting: Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results Mittal Steel Galati dated November 30, 2005.
    - We adjusted the transfer prices for certain inputs MS Galati 
purchased from affiliated suppliers to reflect the higher of the 
transfer price or the market price pursuant to section 773(f)(2) of the 
Act. Id.
    - We adjusted MS Galati's reported cost of manufacturing to include 
two accounts which MS Galati used to offset its cost of manufacturing. 
These two accounts were also reported in the sales listing for the home 
market. Id.
    We then compared the weighted-average cost of production for MS 
Galati to its home-market sales prices of the foreign like product, as 
required under section 773(b) of the Act, to determine whether these 
sales had been made at prices below the cost of production 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.
    On a model-specific basis, we compared the revised cost of 
production to the home-market prices, less any applicable movement 
charges and direct and indirect selling expenses.
    We disregarded below-cost sales where 20 percent or more of MS 
Galati's sales of a given product during the period of review were made 
at prices below the cost of production and, thus, such sales were made 
within an extended period of time in substantial quantities in 
accordance with sections 773(b)(2)(B) and (c) of the Act, and where, 
based on comparisons of the price to the weighted-average cost of 
production for the period of review, we determined that the below-cost 
sales of the product were at prices which would not permit recovery of 
all costs within a reasonable time period, in accordance with section 
773(b)(2)(D) of the Act.

C. Arm's-Length Test

    MS Galati reported that it made sales in the home market to 
affiliated and unaffiliated customers. The Department did not require 
MS Galati to report its affiliated party's downstream sales because 
these sales represented less than five percent of total home-market 
sales. We excluded sales to affiliated customers in the home market not 
made in the ordinary course of trade from our analysis pursuant to 
section 773(a)(1)(B)(i) of the Act. To determine whether sales to 
affiliated customers were made in the ordinary course of trade, we 
tested whether sales to each affiliated customer were made at arm's 
length. As such, we compared the starting prices of sales to affiliated 
and unaffiliated customers net of all billing

[[Page 72987]]

adjustments, movement charges, direct selling expenses, discounts, and 
packing. Where the price to that affiliated party was, on average, 
within a range of 98 to 102 percent of the price of the same or 
comparable merchandise sold to the unaffiliated parties at the same 
level of trade, we determined that the sales made to the affiliated 
party were at arm's length, consistent with Antidumping Proceedings--
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 
(November 15, 2002).

D. Price-to-Price Comparisons

    We based normal value on the home-market sales to unaffiliated 
purchasers and sales to affiliated customers that passed the arm's-
length test. We adjusted gross unit price for reported freight revenue. 
We made adjustments for physical differences in the merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act. We made 
adjustments for movement expenses (i.e., inland freight from plant to 
distribution warehouse and warehousing expenses) in accordance with 
section 773(a)(6)(B) of the Act. We made circumstance-of-sale 
adjustments for imputed credit, where appropriate, in accordance with 
section 773(a)(6)(C)(iii) of the Act. In accordance with section 
773(a)(6) of the Act, we deducted home-market packing costs and added 
U.S. packing costs.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine normal value based on sales in the 
comparison market at the same level of trade as the CEP transaction. 
See also 19 CFR 351.412. The normal-value level of trade is the level 
of the starting-price sales in the comparison market or, when normal 
value is based on constructed value, the level of the sales from which 
we derive selling, general and administrative expenses and profits. For 
CEP sales, the U.S. level of trade is the level of the constructed sale 
from the exporter to the affiliated importer. See 19 CFR 351.412(c)(1).
    To determine whether home-market sales are at a different level of 
trade than CEP sales, we examined stages in the marketing process and 
selling functions along the chain of distribution between the producer 
and the unaffiliated customer. If the home-market sales are at a 
different level of trade than CEP sales and the difference affects 
price comparability, as manifested in a pattern of consistent price 
differences between sales on which normal value is based and home-
market sales at the level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. For 
CEP sales, if the normal-value level is more remote from the factory 
than the CEP level and there is no basis for determining whether the 
difference in levels between normal value and CEP affects price 
comparability, we adjust normal value under section 773(a)(7)(B) of the 
Act (the CEP offset). See Final Determination of Sales at Less Than 
Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 
62 FR 61731, 61732 (November 19, 1997).
    In this review, we obtained information from MS Galati regarding 
the marketing stages involved in sales to the reported home and U.S. 
markets. MS Galati reported that it sells to unaffiliated distributors 
and end-users in Romania as well as to affiliated end-users for 
consumption and affiliated distributors. In the United States, MS 
Galati had sales to an affiliate, INA, that resold the merchandise to 
unaffiliated customers.
    MS Galati reported one level of trade in the home market with the 
following three channels of distribution: 1) direct sales to customers; 
2) consignment sales; 3) sales through its affiliated warehouse. Home-
market sales were made to two classes of customers, end-users and 
distributors. Along with MS Galati's home-market sales of merchandise 
stored at its affiliated warehouse, MS Galati also had sales to 
affiliated end-users for consumption. Based on our review of evidence 
on the record, we find that home-market sales through the three 
channels of distribution to both customer categories, whether 
affiliated or not, were substantially similar with respect to selling 
functions and stages of marketing. MS Galati performed the same selling 
functions at the same level for sales to all home-market customers. 
Accordingly, we preliminarily find that MS Galati had only one level of 
trade for its home-market sales.
    MS Galati reported one CEP level of trade with one channel of 
distribution in the United States which consists of its U.S. 
affiliate's direct sales to end-users and distributors of merchandise 
shipped directly from Romania. As such, we preliminarily determine that 
MS Galati made CEP sales to the United States through one channel of 
distribution--direct sales to end-users and distributors.
    For CEP sales, we consider only the selling activities reflected in 
the price after the deduction of expenses and CEP profit under section 
772(d) of the Act. Accordingly, we reviewed the selling functions and 
services MS Galati reported it performed on CEP sales and we have 
determined that the selling functions performed on all CEP sales were 
identical. Therefore, we preliminarily determine that there is one CEP 
level of trade in the U.S. market.
    We then compared the selling functions performed by MS Galati on 
its CEP sales (after deductions) to the selling functions it provided 
in the home market. We found that MS Galati performs more selling 
functions for its home-market sales than those it provides to its U.S. 
affiliate, INA. MS Galati reported that it provided minimal selling 
functions and services for the CEP level of trade and that, therefore, 
the home-market level of trade is more advanced than the CEP level of 
trade. Based on our analysis of the channels of distribution and MS 
Galati's selling functions for sales in the home market and CEP sales 
in the U.S. market, we preliminarily find that the home-market level of 
trade is at a more advanced stage of distribution when compared to CEP 
sales because MS Galati provides many selling functions in the home 
market at a higher level of service as compared to selling functions it 
performed for its CEP sales.
    We examined whether a level-of-trade adjustment or CEP offset may 
be appropriate. In this case, MS Galati sold at one level of trade in 
the home market. Therefore, there is no information available to 
determine a pattern of consistent price differences between the sales 
on which we base normal value and the home-market sales at the level of 
trade of the export transaction, in accordance with our normal 
methodology as described above. See 19 CFR 351.412(d). We do not have 
record information which would allow us to examine pricing patterns 
based on MS Galati's sales of other products, and there are no other 
respondents or other record information on which such as analysis could 
be based. Accordingly, because the data available do not provide an 
appropriate basis for making a level-of-trade adjustment but the level 
of trade in the home market is at a more advanced state of distribution 
than the level of trade of the CEP transactions, we made a CEP-offset 
adjustment to normal value in accordance with section 773(a)(7)(B) of 
the Act and 19 CFR 351.412(f).
    To calculate the CEP offset, we deducted the home-market indirect 
selling expenses from normal value for home-market sales that we 
compared to U.S. CEP sales. As such, we limited the deduction for home-
market indirect selling expenses by the amount of the

[[Page 72988]]

indirect selling expenses we deducted in calculating the CEP as 
required under section 772(d)(1)(D) of the Act.

Currency Conversion

    We made currency conversions pursuant to 19 CFR 351.415 based on 
the rates certified by the Federal Reserve Bank.

Preliminary Results of Review

    We preliminarily determine that the weighted-average dumping margin 
for MS Galati during the period November 1, 2003, through October 31, 
2004, is 0.94 percent.
    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties calculations performed in connection with these preliminary 
results within five days of the date of publication of this notice. Any 
interested party may request a hearing within 30 days of publication of 
this notice. If requested, a hearing will be held at the main 
Department building. We will notify parties of the exact date, time, 
and place for any such hearing.
    Issues raised in the hearing will be limited to those raised in the 
respective case and rebuttal briefs. Case briefs from interested 
parties may be filed no later than 30 days after publication of this 
notice. Rebuttal briefs, limited to the issues raised in case briefs, 
may be submitted no later than five days after the deadline for filing 
case briefs. Parties who submit case or rebuttal briefs in this 
proceeding are requested to submit with each argument a statement of 
the issue and a brief summary of the argument with an electronic 
version included.
    The Department will publish a notice of final results of this 
administrative review, which will include the results of its analysis 
of issues raised in the case briefs, within 120 days from the date of 
publication of these preliminary results.

Assessment

    Pursuant to 19 CFR 351.212(b), the Department calculates an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this review, if any importer-specific 
assessment rates calculated in the final results are above de minimis 
(i.e., at or above 0.50 percent), we will issue appraisement 
instructions directly to CBP to assess antidumping duties on 
appropriate entries by applying the assessment rate to the entered 
value of the merchandise. To determine whether the duty-assessment rate 
covering the period is de minimis, in accordance with the requirement 
set forth in 19 CFR 351.106(c)(2), we have calculated an importer-
specific assessment ad valorem rate by aggregating the dumping margins 
calculated for all U.S. sales to the sole importer of MS Galati's 
subject merchandise and dividing this amount by the total entered value 
of the sales to that importer. Where the importer-specific ad valorem 
rate is greater than de minimis and because the respondent has reported 
reliable entered values, we will instruct CBP to apply the assessment 
rate to the entered value of the importer's entries during the period 
of review. The Department will issue appropriate assessment 
instructions directly to CBP within 15 days of publication of the final 
results of this review.

Cash-Deposit Requirements

    The following cash-deposit rates will be effective upon publication 
of the final results of this review for all shipments of certain hot-
rolled carbon steel flat products from Romania entered, or withdrawn 
from warehouse, for consumption on or after publication date, as 
provided by section 751(a)(2)(C) of the Act: (1) for subject 
merchandise produced or exported by MS Galati, the cash-deposit rate 
will be the rate established in the final results of this review; (2) 
for previously reviewed or investigated companies not covered in this 
review, the cash-deposit rate will continue to be the company-specific 
rate published for the most recent period; (3) if the exporter is not a 
firm covered in this review, a prior review, or the original 
antidumping duty investigation, but the manufacturer is, the cash-
deposit rate will be the rate established in the most recent period for 
the manufacturer of the merchandise; (4) if neither the exporter nor 
the manufacturer is a firm covered in this or any previous 
administrative review or in the original less-than-fair-value 
investigation, the cash-deposit rate will be 17.84 percent, the ``All 
Others'' rate made effective on June 14, 2005. See Certain Hot-Rolled 
Carbon Steel Flat Products From Romania: Final Results of Antidumping 
Duty Administrative Review, 70 FR 34448 (June 14, 2005).
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during these review periods. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice is published in accordance with sections 751(a)(1) and 
777(i)(1) of the Act.

    Dated: November 30, 2005.
Stephen J. Claeys,
Assistant Secretary for Import Administration.
[FR Doc. E5-7081 Filed 12-7-05; 8:45 am]
Billing Code: 3510-DS-S