Stainless Steel Bar from France: Preliminary Results of Antidumping Duty Administrative Review, 3463-3468 [E6-658]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 14 (Monday, January 23, 2006)]
[Notices]
[Pages 3463-3468]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-658]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-427-820


Stainless Steel Bar from France: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a timely request by the petitioners,\1\ the 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on stainless steel bar (SSB) from 
France with respect to Ugitech S.A. (Ugitech). The period of review 
(POR) is March 1, 2004, through February 28, 2005.
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    \1\ The petitioners include the following companies: Carpenter 
Technology Corporation; Crucible Specialty Metals Division, Crucible 
Materials Corporation; and Electroalloy Corporation, a Division of 
G.O. Carlson, Inc.
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    We preliminarily determine that sales have been made below normal 
value (NV). Interested parties are invited to comment on the 
preliminary results. If the preliminary results are adopted in our 
final results of administrative review, we will instruct U.S. Customs 
and Border Protection (CBP) to assess antidumping duties on all 
appropriate entries.

EFFECTIVE DATE:  January 23, 2006.

FOR FURTHER INFORMATION CONTACT:  David Goldberger or Rebecca Trainor, 
AD/CVD Operations, Office 2, Import Administration-Room B099, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-4136 or (202) 482-4007, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 7, 2002, the Department published in the Federal Register 
an antidumping duty order on SSB from France. See Notice of Antidumping 
Duty Order: Stainless Steel Bar from France, 67 FR 10385 (SSB Order). 
On March 31, 2005, both the petitioners and Ugitech submitted letters 
timely requesting that the Department conduct an administrative review 
of the sales of SSB made by Ugitech, pursuant to section 751 of the 
Tariff Act of 1930, as amended (the Act). The Department published a 
notice of initiation of an administrative review with respect to 
Ugitech. See Initiation of Antidumping and Countervailing Duty Reviews, 
70 FR

[[Page 3464]]

20862, (April 22, 2005). On April 27, 2005, we issued an antidumping 
duty questionnaire to Ugitech. Responses to the questionnaire were 
received in June 2005. We issued a supplemental questionnaire in August 
2005, and received responses in September and October 2005. Ugitech 
provided additional information in response to Department requests 
during November 2005.
    On November 7, 2005, we extended the time limit for the preliminary 
results in this review until January 13, 2006. See Notice of Extension 
of Time Limit for Preliminary Results in Antidumping Duty 
Administrative Review: Stainless Steel Bar From France, 70 FR 69319 
(November 15, 2005).
The petitioners submitted comments for the preliminary results in late 
December 2005, but they were submitted too late for consideration in 
the preliminary results.

Scope of the Order

    For purposes of this order, the term ``stainless steel bar'' 
includes articles of stainless steel in straight lengths that have been 
either hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise 
cold-finished, or ground, having a uniform solid cross section along 
their whole length in the shape of circles, segments of circles, ovals, 
rectangles (including squares), triangles, hexagons, octagons, or other 
convex polygons. SSB includes cold-finished stainless steel bars that 
are turned or ground in straight lengths, whether produced from hot-
rolled bar or from straightened and cut rod or wire, and reinforcing 
bars that have indentations, ribs, grooves, or other deformations 
produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), products that have been cut from stainless 
steel sheet, strip or plate, wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The SSB subject to this order is currently classifiable under 
subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 
7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of this order is dispositive.

Fair Value Comparisons

    To determine whether sales of SSB by Ugitech to the United States 
were made at less than NV, we compared constructed export price (CEP) 
to the NV, as described in the ``Constructed Export Price'' and 
``Normal Value'' sections of this notice.
    Pursuant to section 777A(d)(2) of the Act, we compared the CEPs of 
individual U.S. transactions to the weighted-average NV of the foreign 
like product where there were sales made in the ordinary course of 
trade, as discussed in the ``Cost of Production Analysis'' section 
below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by Ugitech covered by the description in the ``Scope 
of the Order'' section, above, to be foreign like products for purposes 
of determining appropriate product comparisons to U.S. sales. As 
section 771(16)(A) and (B) define ``foreign like product'' to be 
merchandise that is produced in the same country and by the same person 
as the merchandise which is the subject of the investigation, we have 
excluded from our comparisons SSB sold by Ugitech in France but 
produced by an unaffiliated party. Pursuant to 19 CFR 351.414(e)(2), we 
compared U.S. sales to sales made in the home market within the 
contemporaneous window period, which extends from three months prior to 
the month of the U.S. sale until two months after the sale. Where there 
were no sales of identical merchandise in the comparison market made in 
the ordinary course of trade to compare to U.S. sales, we compared U.S. 
sales to sales of the most similar foreign like product made in the 
ordinary course of trade. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
Ugitech in the following order: general type of finish; grade; 
remelting process; type of final finishing operation; shape; and size 
range.

Constructed Export Price

    We calculated CEP in accordance with section 772(b) of the Act 
because the subject merchandise was sold for the account of Ugitech by 
its subsidiary, Ugine Stainless & Alloy, Inc. (US&A), in the United 
States to unaffiliated purchasers. In addition, Ugitech reported sales 
of SSB which were further processed by US&A in the United States. For 
the subject merchandise further processed in the United States, we used 
the starting price of the subject merchandise and deducted the costs of 
further processing to determine CEP for such merchandise, in accordance 
with section 772(d)(2) of the Act. To calculate the cost of further 
manufacturing, we relied on Ugitech's reported cost of further 
manufacturing materials, labor, and overhead, plus amounts for further 
manufacturing general and administrative expenses (G&A) and financial 
expenses.
    We based CEP on the packed prices to unaffiliated purchasers in the 
United States. We identified the correct starting price by adjusting 
for alloy surcharges, freight revenue, other revenue and billing 
adjustments associated with the sale, and by making deductions for 
discounts, where applicable, as required by section 772 of the Act. We 
also made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These expenses included, where appropriate, 
foreign inland freight (including freight from the plant/warehouse to 
the port of exportation), brokerage and handling, ocean freight, marine 
insurance, U.S. inland freight expenses (including freight from the 
U.S. port to the warehouse, freight between warehouses, and freight 
from the warehouse to the unaffiliated customer), and U.S. customs 
duties and fees (including harbor maintenance fees and merchandise 
processing fees). 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 
(commissions, credit expenses, warranty expenses, other direct selling 
expenses and repacking expenses) and indirect selling expenses 
(indirect selling expenses and inventory carrying costs) incurred in 
the country of exportation and the United States. For the sales where 
the payment date was not reported because the customer had not yet 
paid, we set the payment date equal to October 5, 2005, the date of 
Ugitech's last submitted sales data base, and recalculated the imputed 
credit expense accordingly. We also deducted an amount for further-
manufacturing costs, where applicable, in accordance with section 
772(d)(2) of the Act, and made an adjustment for profit in accordance 
with section 772(d)(3) of the Act.

[[Page 3465]]

Normal Value

A. Home Market Viability
    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared the volume of home market sales of the foreign like product 
to the volume of U.S. sales of the subject merchandise, in accordance 
with section 773(a)(1)(C) of the Act.
    Because Ugitech's aggregate volume of home market sales of the 
foreign like product was greater than five percent of its aggregate 
volume of U.S. sales for the subject merchandise, we determined that 
its home market was viable.
B. Affiliated-Party Transactions and Arm's-Length Test
    During the POR, Ugitech sold the foreign like product to affiliated 
customers. To test whether these sales were made at arm's-length 
prices, we compared, on a product-specific basis, the starting prices 
of sales to affiliated and unaffiliated customers, net of all discounts 
and rebates, movement charges, direct selling expenses, and packing 
expenses. Pursuant to 19 CFR 351.403(c) and in accordance with the 
Department's practice, where the price to the affiliated party was, on 
average, within a range of 98 to 102 percent of the price of the same 
or comparable merchandise sold to unaffiliated parties, we determined 
that sales made to the affiliated party were at arm's length. See 
Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course 
of Trade, 67 FR 69186, 69187 (November 15, 2002) (establishing that the 
overall ratio calculated for an affiliate must be between 98 percent 
and 102 percent in order for sales to be considered in the ordinary 
course of trade and used in the normal value calculation). Sales to 
affiliated customers in the home market that were not made at arm's-
length prices were excluded from our analysis because we considered 
these sales to be outside the ordinary course of trade. See 19 CFR 
351.102(b).

Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (LOT) as the export price (EP) or CEP. Sales are 
made at different LOTs if they are made at different marketing stages 
(or their equivalent). See 19 CFR 351.412(c)(2). Substantial 
differences in selling activities are a necessary, but not sufficient, 
condition for determining that there is a difference in the stages of 
marketing (id.); see also Notice of 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) (Plate from South 
Africa). In order to determine whether the comparison sales were at 
different stages in the marketing process than the U.S. sales, we 
reviewed the distribution system in each market (i.e., the chain of 
distribution), including selling functions, class of customer (customer 
category), and the level of selling expenses for each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison market sales (i.e., NV based on either home 
market or third country prices) \2\, we consider the starting prices 
before any adjustments. For CEP sales, we consider only the selling 
activities reflected in the price after the deduction of expenses and 
profit under section 772(d) of the Act. See Micron Technology, Inc. v. 
United States, 243 F. 3d 1301, 1314 (Fed. Cir. 2001).
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    \2\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses, G&A expenses, and profit for CV, where possible.
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    When the Department is unable to match U.S. sales of the foreign 
like product in the comparison market at the same LOT as the EP or CEP, 
the Department may compare the U.S. sale to sales at a different LOT in 
the comparison market. In comparing EP or CEP sales at a different LOT 
in the comparison market, where available data make it practicable, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if the NV LOT is more remote from the factory than 
the CEP LOT and there is no basis for determining whether the 
difference in LOTs between NV and CEP affects price comparability 
(i.e., no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Plate 
from South Africa, 62 FR at 61731. We obtained information from Ugitech 
regarding the marketing stages involved in making the reported foreign 
market and U.S. sales, including a description of the selling 
activities performed for each channel of distribution.
    Ugitech sold SSB to end-users and distributors in both the U.S. and 
home markets. Ugitech reported that it made CEP sales in the U.S. 
market (through its U.S. affiliate, US&A) through the following two 
channels of distribution: (1) sales of Ugitech-produced SSB purchased 
from Ugitech, and (2) sales of Ugitech-produced SSB purchased from 
Ugitech's Italian affiliate, Trafilerie Bedini, S.r.l (Bedini). We 
compared the selling activities performed in each channel, and found 
that the same selling functions (e.g., production planning, warranty, 
technical service, and freight & delivery) were performed at the same 
relative level of intensity in both channels of distribution. 
Accordingly, we find that all CEP sales constitute one LOT.
    With respect to the home market, Ugitech reported five channels of 
distribution (channels 3 through 7) described as follows: (3) factory 
direct sales; (4) ex-inventory sales of standard SSB; (5) ex-inventory 
sales of SSB for special applications; (6) sales of ex-inventory 
French-origin standard SSB purchased from Bedini; and (7) sales of ex-
inventory French-origin SSB for special applications purchased from 
Bedini. According to Ugitech, the direct sales (channel 3), the ex-
inventory standard SSB sales (channels 4 and 6), and the ex-inventory 
SSB with special application sales (channels 5 and 7) constitute three 
distinct LOTs in the home market.\3\
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    \3\ Ugitech reported the selling functions performed in the home 
market according to the Ugitech entity responsible for the activity. 
As we find no basis to differentiate sales functions in this manner 
for purposes of our LOT analysis, we have ``collapsed'' this 
reporting in our analysis and considered the level of intensity 
performed for each selling function on the basis of the highest 
intensity performed by any Ugitech entity.
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    In determining whether separate LOTs exist in the home market, we 
compared the selling functions performed across all channels of 
distribution. After our analysis of the information submitted for the 
record of this review, we find that all home market sales were made at 
the same LOT, consistent with our analysis and findings in the previous 
administrative review. See Stainless Steel Bar from France: Preliminary 
Results of Antidumping Duty Administrative Review, 70 FR 17411, 17414 
(April 6, 2005), and Stainless Steel Bar from France: Final Results of 
Antidumping Duty Administrative Review, 70 FR 46482 (August 10, 2005) 
(SSB from France 2003-2004), Issues and Decision Memorandum at Comment 
4.
    Specifically with respect to this review, we found that, except for 
inventory maintenance, all selling functions were performed across all 
channels of distribution with only slight variances in the levels of 
intensity for a few sales activities listed within certain selling 
functions. We note that the selling functions (e.g., strategy planning 
and marketing, customer sales contact, production/planning/order 
evaluation, advertising, warranty, technical service,

[[Page 3466]]

computer systems and freight and delivery) were all generally performed 
at the same or similar levels of intensity for the direct ex-works 
sales and both channels of inventory sales (standard and special 
application). As we noted in the previous review, although the level of 
intensity varies within a few of the selling activities performed for 
Ugitech's direct ex-works and inventory sales, these variances are not 
so significant to constitute distinct LOTs.
    With respect to inventory maintenance, the Department has 
determined that sales from an inventory warehouse are not at a separate 
LOT from sales shipped directly from a mill simply by virtue of the 
inventory maintenance function (see, e.g., SSB from France 2003-2004 
and Stainless Steel Bar From Germany: Final Results of Antidumping Duty 
Administrative Review, 70 FR 19419 (April 13, 2005), Issues and 
Decision Memorandum at Comment 2). Instead, we have looked at the 
variety and intensity of selling functions between these channels of 
distribution in order to determine whether there are distinguishable 
LOTs. We have maintained since the less-than-fair-value (LTFV) 
investigation in this proceeding that we do not consider the activities 
of light general warehousing services and further manufacturing/special 
services associated with special application sales that Ugitech has 
identified under inventory maintenance to be selling functions. See 
Notice of Preliminary Determination of Sales at Less Than Fair Value: 
Stainless Steel Bar From France, 66 FR 40201 (August 2, 2001); 
continued in Notice of Final Determination of Sales at Less Than Fair 
Value: Stainless Steel Bar From France, 67 FR 3143 (January 23, 2002) 
(SSB from France LTFV Final). Thus, these items are not relevant to the 
LOT analysis. However, we are accounting for some of these activities 
and the expenses associated with these activities in our calculations 
by deducting from the home market price the reported warehousing 
expenses, which include Ugitech's expenses for technical personnel 
working with the special application sales (see ``Price-to-Price 
Comparisons'' below).
    Ugitech has also reported the size of its sales quantities and the 
availability of just-in-time delivery to be distinct selling functions 
for purposes of the LOT analysis. However, the Department does not 
consider sales quantities (i.e., lot sizes) to be a selling function 
for purposes of distinguishing LOT (see, e.g., Stainless Steel Bar From 
Germany: Final Results of Antidumping Duty Administrative Review, 69 FR 
32982 (June 14, 2004), Issues and Decision Memorandum at Comment 1). We 
also do not consider the just-in-time delivery ability to be a selling 
function. Rather, we find it to be an element of warehousing activity. 
We agree that there is a difference in the selling function of pre-sale 
warehousing, which is offered for ex-inventory sales and not for ex-
mill sales. However, as noted above, this selling activity alone is not 
a sufficient basis to distinguish separate LOTs between factory direct 
and inventory sales. Accordingly, based on the record evidence of this 
review and the above analysis, we find few differences in the selling 
functions offered or in their intensity among Ugitech's three sales 
channels (factory direct, standard ex-inventory, and special 
application ex-inventory). Therefore, we have made our preliminary 
results treating all home market sales at the same LOT.
    Finally, we compared the CEP LOT to the home market LOT and found 
that the selling functions performed for home market customers are 
either performed at a higher degree of intensity or are greater in 
number than the selling functions performed for the U.S. customer. For 
example, in comparing the selling activities noted under the various 
selling functions reported (e.g., strategy planning/marketing and 
customer sales contact), Ugitech performed each of these selling 
activities at a higher level of intensity in the home market than in 
the U.S. market. Similarly, we noted that the advertising selling 
function was performed at the highest level of intensity in the home 
market, whereas, in the U.S. market it was not performed at all. 
Therefore, we conclude that Ugitech's home market sales are at a more 
advanced LOT than its U.S. sales.
    As home market and U.S. sales were made at different LOTs, we could 
not match CEP sales to home market sales at the same LOT. Moreover, as 
we found only one LOT in the home market, it was not possible to make 
an LOT adjustment to home market sales because such an adjustment is 
dependent upon our ability to identify a pattern of consistent price 
differences between the home market sales on which NV is based and home 
market sales at the LOT of the export transaction. Because the data 
available do not form an appropriate basis for making an LOT 
adjustment, but the home market LOT is at a more advanced stage of 
distribution than the CEP LOT, we have made a CEP offset to NV in 
accordance with section 773(a)(7)(B) of the Act. The CEP offset is 
calculated as the lesser of: (1) the indirect selling expenses on home 
market sales, or (2) the indirect selling expenses deducted from the 
starting price in calculating CEP.

Cost of Production Analysis

    In the LTFV investigation, the most recently completed segment of 
this proceeding as of April 27, 2005, the date the questionnaire was 
issued in this review, we found that Ugitech (then known as Ugine-
Savoie Imphy S.A) had made sales below the cost of production. See 
Notice of Preliminary Determination of Sales at Less Than Fair Value 
and Postponement of Final Determination: Stainless Steel Bar From 
France, 66 FR 40201, 40205 (August 2, 2001); affirmed in SSB from 
France LTFV Final. Subsequently, the Department also disregarded 
certain sales made by Ugitech in the 2003-2004 administrative review 
that were determined to be below the cost of production. See Stainless 
Steel Bar from France: Preliminary Results of Antidumping Duty 
Administrative Review, 70 FR 17411, 17416 (April 6, 2005); affirmed in 
SSB from France 2003-2004. Thus, in accordance with section 
773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or 
suspect that Ugitech made sales in the home market at prices below the 
cost of producing the merchandise in the current review period. 
Accordingly, we instructed Ugitech to respond to the section D (Cost of 
Production) questionnaire.
A. Calculation of Cost of Production
    In accordance with section 773(b)(3) of the Act, we calculated 
Ugitech's cost of production (COP) and constructed value (CV) based on 
the sum of Ugitech's costs of materials and conversion for the foreign 
like product, plus amounts for G&A expenses and interest expenses (see 
``Test of Home Market Sales Prices'' section below for treatment of 
home market selling expenses). The Department relied on the COP data 
submitted by Ugitech in its most recent supplemental section D 
questionnaire response, dated October 5, 2005, for the COP calculation, 
except in the following instances:
    1. In fiscal years 2003 and 2004, Ugitech accrued restructuring 
costs related to a multi-year restructuring plan which is expected to 
be completed in 2010. Although Ugitech's home-country generally 
accepted accounting principles (GAAP) require the company to accrue the 
total estimated costs during the year in which the costs are probable 
and reasonably estimable, Ugitech reported that the

[[Page 3467]]

accrued costs relate to activities which occurred or are expected to 
occur over multiple fiscal years. In the previous review period, we 
included the current portion of the accrued restructuring charges in 
Ugitech's G&A expenses for fiscal year 2003 by amortizing the total 
accrued charges over the period of restructuring (see SSB from France 
2003-2004, Issues and Decision Memorandum at Comment 3). For the 
current review period, we continued to amortize the remaining accrued 
restructuring charges over the remaining period of restructuring.
    2. In accordance with its home-country GAAP, Ugitech incurred and 
recognized a loss for the impairment of fixed assets during fiscal year 
2004. Ugitech reported its depreciation expenses based on the impaired 
asset values. However, Ugitech excluded the loss from the company's 
reported G&A expenses for purposes of this administrative review. 
Consistent with our treatment of Ugitech's fiscal year 2003 impairment 
losses in the prior review period (see SSB from France 2003-2004, 
Issues and Decision Memorandum at Comment 1) and because the impairment 
loss relates to the general operations of the company, we included 
Ugitech's fiscal year 2004 impairment in the company-wide G&A expenses 
for the current review period.
    3. Ugitech excluded certain miscellaneous financial expenses from 
the reported calculation of the financial expense ratio of Ugitech's 
parent company, Arcelor S.A. (Arcelor). The expenses were recognized in 
Arcelor's audited financial statement as financial expenses, but were 
excluded from the calculations in Ugitech's responses. We revised 
Ugitech's calculations to include Arcelor's miscellaneous financial 
expenses in the financial expense ratio.
Our revisions to Ugitech's COP data are discussed in the Memorandum 
from Joseph Welton, Accountant, to Neal Halper, Director, entitled Cost 
of Production and Constructed Value Calculation Adjustments for the 
Preliminary Results - Ugitech, S.A., dated January 12, 2006.
B. Test of Home Market Sales Prices
    On a product-specific basis, we 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 
the sale prices were below the COP. For purposes of this comparison, we 
used COP exclusive of selling and packing expenses. The prices 
(inclusive of alloy surcharges, freight revenue, service charge 
revenue, processing charge revenue and billing adjustments, where 
appropriate) were exclusive of any applicable movement charges, 
rebates, discounts, and direct and indirect selling expenses and 
packing expenses, revised where appropriate, as discussed below under 
the ``Price-to-Price Comparisons'' section. In determining whether to 
disregard home market sales made at prices less than their COP, we 
examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, 
whether such sales were made: (1) within an extended period of time, 
(2) in substantial quantities, and (3) at prices which did not permit 
the recovery of all costs within a reasonable period of time.
C. Results of the COP Test
    In determining whether to disregard home market sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) or the Act: (1) whether, within an extended period 
of time, such sales were made in substantial quantities; and (2) 
whether such sales were made at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade. Where less than 20 percent of the respondent's home market sales 
of a given product are at prices less than the COP, we do not disregard 
any below-cost sales of that product, because we determine that in such 
instances the below-cost sales were not made within an extended period 
of time and in ``substantial quantities.'' Where 20 percent or more of 
a respondent's sales of a given product are at prices less than the 
COP, we disregard the below-cost sales because: (1) they 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 (2) based 
on our comparison of prices to the weighted-average COPs for the POR, 
they were at prices which would not permit the recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act.
    We found that, for certain specific products, more than 20 percent 
of Ugitech's home market sales were at prices less than the COP and, in 
addition, such sales did not provide for the recovery of costs within a 
reasonable period of time. We therefore excluded these sales and used 
the remaining sales as the basis for determining NV, in accordance with 
section 773(b)(1) of the Act.

Price-to-Price Comparisons

    As discussed in the ``Normal Value'' section above, we calculated 
NV based on delivered prices to unaffiliated customers or prices to 
affiliated customers that were determined to be at arm's length. We 
made adjustments, where appropriate, to the starting price for alloy 
surcharges, freight revenue, service charge revenue, processing charge 
revenue, billing adjustments, early payment discounts and rebates. We 
made deductions, where appropriate, from the starting price for inland 
freight (from the plant to the warehouse or plant to the customer), 
warehousing expenses, and inland insurance, under section 
773(a)(6)(B)(ii) of the Act.
    For the sales where the payment date was not reported because the 
customer had not yet paid, we set the payment date equal to October 5, 
2005, the date of Ugitech's last submitted sales data base, and 
recalculated the imputed credit expense accordingly.
    We made adjustments for differences in costs attributable to 
differences in the physical characteristics of the merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. 
In addition, we made adjustments under section 773(a)(6)(C)(iii) of the 
Act and 19 CFR 351.410 for differences in circumstances of sale for 
imputed credit expenses, receivables insurance expenses, and warranty 
expenses. At the Department's request, Ugitech reported per-unit 
warranty expenses based on two methodologies: one allocating warranty 
expenses according to its reported sales channels and LOTs, and another 
allocating warranty expenses over all home market sales. We applied the 
reported per-unit amount calculated based on the second allocation 
methodology described above (i.e., the AVWARRH variable) as Ugitech 
reported no difference in warranty terms or expenses according to sales 
channel, and we determined that all home market sales were made at the 
same LOT.
    We also deducted home market packing costs and added U.S. packing 
costs, in accordance with section 773(a)(6)(A) and (B) of the Act. 
Finally, as discussed above under the ``Level of Trade'' section, we 
made a CEP offset pursuant to section 773(a)(7)(B) of the Act and 19 
CFR 351.412(f). We calculated the CEP offset as the lesser of the 
indirect selling expenses on the comparison-market sales or the 
indirect selling expenses deducted from the starting price in 
calculating CEP.

[[Page 3468]]

Pursuant to the Department's request, Ugitech reported per-unit home 
market indirect selling expenses based on multiple expense allocation 
methodologies in accordance with its reported sales channels and its 
claimed LOTs. Consistent with our LOT determination explained above, we 
applied the reported indirect selling expense variables which 
represented the expense amounts allocated over all home market sales, 
rather than by reported sales channel and claimed LOT.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act based on the exchange rates in effect on the dates of the U.S. 
sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
weighted-average dumping margin for the period March 1, 2004, through 
February 28, 2005, is as follows:

------------------------------------------------------------------------
                Manufacturer/Exporter                   Percent Margin
------------------------------------------------------------------------
Ugitech S.A.........................................                9.70
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b). Any interested party may request a 
hearing within 30 days of publication. See 19 CFR 351.310(c). If 
requested, a hearing will be scheduled after determination of the 
briefing schedule.
    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, Room B-099, within 30 days of the 
date of publication of this notice. Requests should contain: (1) the 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c).
    Issues raised in the hearing will be limited to those raised in the 
respective case briefs. Case briefs from interested parties and 
rebuttal briefs, limited to the issues raised in the respective case 
briefs, may be submitted in accordance with a schedule to be 
determined. Parties who submit case briefs or rebuttal briefs in this 
proceeding are requested to submit with each argument (1) a statement 
of the issue and (2) a brief summary of the argument. Parties are also 
encouraged to provide a summary of the arguments not to exceed five 
pages and a table of statutes, regulations, and cases cited.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries, in accordance with 19 CFR 351.212. 
The Department will issue appropriate appraisement instructions for the 
companies subject to this review directly to CBP within 15 days of 
publication of the final results of this review.
    For assessment purposes, we calculated importer-specific ad valorem 
duty assessment rates based on the ratio of the total amount of dumping 
margins calculated for the examined sales to the total entered value of 
those same sales. We will instruct CBP to assess antidumping duties on 
all appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., at or above 0.50 percent). See 19 CFR 351.106(c)(1). 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the final 
results of this review and for future deposits of estimated duties, 
where applicable.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) the cash deposit rate for the reviewed 
company will be that established in the final results of this review, 
except if the rate is less than 0.50 percent, and therefore, de minimis 
within the meaning of 19 CFR 351.106(c)(1), in which case the cash 
deposit rate will be zero; (2) for previously reviewed or investigated 
companies not listed above, 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 LTFV investigation, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent period 
for the manufacturer of the merchandise; and (4) the cash deposit rate 
for all other manufacturers or exporters will continue to be 3.90 
percent, the ``All Others'' rate made effective by the LTFV 
investigation. See SSB Order. These 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 this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.

    Dated: January 12, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-658 Filed 1-20-06; 8:45 am]
BILLING CODE 3510-DS-S