Certain Cut-to-Length Carbon Steel Plate from Romania: Preliminary Results of the Antidumping Duty Administrative Review and Partial Rescission, 53377-53382 [E6-14911]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 175 (Monday, September 11, 2006)]
[Notices]
[Pages 53377-53382]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-14911]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-485-803)


Certain Cut-to-Length Carbon Steel Plate from Romania: 
Preliminary Results of the Antidumping Duty Administrative Review and 
Partial Rescission

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from domestic producer, Nucor 
Corporation, and a Romanian producer/exporter, Mittal Steel Galati, 
S.A. (``MS Galati''), the Department of Commerce (``the Department'') 
is conducting an administrative review of the antidumping duty order on 
certain cut-to-length carbon steel plate from Romania. The period of 
review (``POR'') is August 1, 2004, through July 31, 2005. With regard 
to the two Romanian companies that are subject to this administrative 
review, producer MS Galati and exporter Metalexportimport S.A. 
(``MEI''), we preliminarily determine that sales of subject merchandise 
produced by MS Galati have been made at less than normal value 
(``NV''). Since MS Galati had prior knowledge of the destination of the 
subject merchandise it produced, and MEI does not produce or take title 
to the subject merchandise, we are assigning a preliminary dumping 
margin to MS Galati only and rescinding the review with respect to MEI. 
For a full discussion of the intent to rescind with respect to MEI, see 
the ``Notice of Intent to Rescind in Part'' section of this notice 
below. We invite interested parties to comment on these preliminary 
results. Parties that submit comments are requested to submit with each 
argument (1) a statement of the issue(s), (2) a brief summary of the 
argument(s), and (3) a table of authorities.

EFFECTIVE DATE: September 11, 2006

FOR FURTHER INFORMATION CONTACT: Dena Crossland or John Drury, AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14\th\ Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3362 or (202) 482-0195, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 1, 2005, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
certain cut-to-length carbon steel plate from Romania for the period 
August 1, 2004, through July 31, 2005. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 70 FR 44085 (August 1, 
2005). On August 31, 2005, the Department received two timely requests 
for an administrative review of this order. The Department received a 
timely request from Nucor Corporation, a domestic producer, requesting 
that the Department conduct an administrative review of shipments 
exported to the United States from MS Galati. In addition, the 
Department received a timely request from MS Galati, requesting that 
the Department conduct an administrative review of subject merchandise 
produced by MS Galati and exported by MS Galati or MEI.\1\
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    \1\ On September 29, 2005, IPSCO Steel Inc. (``IPSCO'') 
submitted a letter indicating its entry of appearance as a domestic 
interested party.
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    On September 28, 2005, the Department initiated an administrative 
review of the antidumping duty order on certain cut-to-length carbon 
steel plate from Romania, for the period covering August 1, 2004, 
through July 31, 2005, to determine whether merchandise imported into 
the United States from MS Galati and MEI is being sold at less than NV. 
See Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 70 FR 56631 (September 28, 
2005). On October 13, 2005, the Department issued an antidumping duty 
questionnaire to MS Galati.
    On November 10, 2005, we received the Section A questionnaire 
response from MS Galati. On December 1, 2004, and January 26, 2006, 
respectively, MS Galati filed its Section B and C questionnaire 
responses, and MEI stated in a separate filing that it did not have any 
home market (``HM'') sales during the POR and, thus, would not be 
filing a Section B response. On January 23, 2006, the Department issued 
a supplemental questionnaire regarding MS Galati's Sections A through C 
questionnaire responses. On March 22, 2005, MS Galati submitted its 
response to the supplemental questionnaire. On April 11, 2006, the 
Department issued a second supplemental questionnaire with regard to 
Sections A through D, and received MS Galati's response on April 27, 
2006.
    On December 23, 2005, IPSCO submitted allegations of sales below 
the cost of production (``COP'') against MS Galati, and, on January 12, 
2006, MS Galati submitted its rebuttal comments. Upon a thorough review 
of IPSCO's allegation and MS Galati's comments, the Department 
initiated a sales-below-cost investigation on January 23, 2006, and 
instructed MS Galati to respond to Section D of the antidumping 
questionnaire. On February 12, 2006, the Department received MS 
Galati's Section D Response. On March 15, 2006, the Department issued a 
supplemental questionnaire regarding MS Galati's Section D 
questionnaire response. On April 6, 2006, we received MS Galati's 
supplemental questionnaire response.
    On April 19, 2006, due to the complexity of the case and pursuant 
to section 751(a)(3)(A) of the Tariff Act of 1930, as amended (``the 
Act''), the Department postponed the preliminary results in this 
administrative review until no later than August 31, 2006. See Certain 
Cut-to-Length Carbon Steel Plate from Romania: Notice of Extension of 
Time Limit for the Preliminary Results of the Antidumping Duty 
Administrative Review, 71 FR 20076 (April 19, 2006).

Notice of Intent To Rescind Review in Part

    Pursuant to section 351.213(d)(3) of the Department's regulations, 
the Department may rescind an administrative review, in whole or only 
with respect to a particular exporter or producer, if the Secretary 
concludes that, during the period covered by the review, there were no 
entries, exports, or sales of the subject merchandise. See, e.g., 
Stainless Steel Plate in Coils from Taiwan: Notice of Preliminary 
Results and Rescission in Part of Antidumping Duty Administrative 
Review, 67 FR 5789, 5790 (February 7, 2002), and Stainless Steel Plate 
in Coils from Taiwan: Final Rescission of Antidumping Duty 
Administrative Review, 66 FR 18610 (April 10, 2001). As discussed 
above, MEI stated in its January 26, 2006, letter that it did not have 
any HM sales. Regarding sales of subject merchandise to the United 
States, during verification, we found that a) MEI is not the producer 
of subject merchandise, b) MEI does not

[[Page 53378]]

take title to the merchandise which MS Galati exports through MEI, and 
c) MS Galati has knowledge of the destination of its subject 
merchandise exports. See Memorandum to the File, through Abdelali 
Elouaradia, Program Manager, Verification of the Home Market and U.S. 
Sales Responses of Mittal Steel Galati S.A. in the Antidumping Duty 
Administrative Review of Certain Cut-to-Length Carbon Steel Plate from 
Romania, dated August 25, 2006. Therefore, the Department concludes 
that during the POR, MEI did not produce or export subject merchandise 
other than merchandise produced by MS Galati, and accordingly we are 
preliminarily rescinding the review with respect to MEI.

Scope of the Order

    The products covered by this order include hot-rolled carbon steel 
universal mill plates (i.e., flat-rolled products rolled on four faces 
or in a closed box pass, of a width exceeding 150 millimeters but not 
exceeding 1,250 millimeters and of a thickness of not less than 4 
millimeters, not in coil and without patterns in relief), of 
rectangular shape, neither clad, plated nor coated with metal, whether 
or not painted, varnished, or coated with plastics or other nonmetallic 
substances; and certain hot-rolled carbon steel flat-rolled products in 
straight lengths, of rectangular shape, hot rolled, neither clad, 
plated, nor coated with metal, whether or not painted, varnished, or 
coated with plastics or other nonmetallic substances, 4.75 millimeters 
or more in thickness and of a width which exceeds 150 millimeters and 
measures at least twice the thickness, as currently classifiable in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') under item 
numbers 7208.31.0000, 7208.32.0000, 7208.33.1000, 7208.33.5000, 
7208.41.0000, 7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000, 
7210.90.9000, 7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included 
under this order are flat-rolled products of nonrectangular cross-
section where such cross-section is achieved subsequent to the rolling 
process (i.e., products which have been ``worked after rolling'')--for 
example, products which have been bevelled or rounded at the edges. 
Excluded from this review is grade X-70 plate. These HTSUS item numbers 
are provided for convenience and customs purposes. The written 
description remains dispositive.

Verification

    As provided in section 782(I) of the Act, and section 351.307 of 
the Department's regulations, we conducted sales and cost verifications 
of the questionnaire responses of MS Galati and Mittal Steel North 
America (``MSNA''). We used standard verification procedures, including 
on-site inspection of MS Galati's production facility. Our verification 
results are outlined in the following memoranda: (1) Memorandum to the 
File, through Peter Scholl, Program Manager, Verification of the Cost 
Response of Mittal Steel Galati S.A. in the Antidumping Duty 
Administrative Review of Certain Cut-to Length Carbon Steel Plate from 
Romania , dated August 21, 2006 (``MS Galati Cost Verification 
Report''); (2) Memorandum to the File, through Abdelali Elouaradia, 
Program Manager, Verification of the Home Market and U.S. Sales 
Responses of Mittal Steel Galati S.A. in the Antidumping Duty 
Administrative Review of Certain Cut-to-Length Carbon Steel Plate from 
Romania, dated August 31, 2006 (``MS Galati Sales Verification 
Report''); and (3) Memorandum to the File, through Abdelali Elouaradia, 
Program Manager, Verification of U.S. Sales Information Submitted by 
Mittal Steel Galati, S.A. (``MS Galati'') in the Antidumping Duty 
Administrative Review of Certain Cut-to-Length Carbon Steel Plate from 
Romania, dated August 30, 2006 (``CEP Verification Report''). Public 
versions of these reports are on file in the Central Records Unit 
(``CRU'') located in room B-099 of the Main Commerce Building.

Currency Conversion

    We made currency conversions pursuant to section 351.415 of the 
Department's regulations based on the rates certified by the Federal 
Reserve Bank.

Date of Sale

    The Department's regulations state that it will normally use the 
date of invoice, as recorded in the exporter's or producer's records 
kept in the ordinary course of business, as the date of sale. See 
section 351.401(I) of the Department's regulations. If the Department 
can establish ``a different date that better reflects the date on which 
the exporter or producer establishes the material terms of sale,'' the 
Department may choose a different date. Id.
    For the present review, MS Galati reported the date of order 
acknowledgment as the date of sale for its U.S. sales and invoice date 
as the date of sale for its home market sales. Regarding its U.S. 
sales, MS Galati stated that after it agrees on the sales terms with 
its customer, it issues an order acknowledgment that specifically 
states that all parties agree that the terms are fixed. According to MS 
Galati, because of the long lead times between order acknowledgment 
date and invoice date, it decided to fix the U.S. sales terms with the 
order acknowledgment to guarantee price stability for its U.S. sales. 
Regarding its home market sales, MS Galati stated that it issues a 
contract addendum to the customer, which functions like an order 
acknowledgment, and then issues an invoice to the customer on or a few 
days after the date the merchandise is shipped. According to MS Galati, 
the terms of sale can change up to the date of shipment.
    In reviewing all information on the record, including transaction-
specific information examined at verification, we preliminarily find 
that the terms of sale for MS Galati's U.S. sales did not change from 
the order acknowledgment to the invoice. For home market sales, the 
Department examined at verification whether the date that MS Galati 
issued its addendum or the date it issued its invoice best reflects the 
date of sale, and determined that the invoice date should be the date 
of sale if the invoice is issued on or before the shipment date, and 
shipment date should be the date of sale if the invoice is issued after 
the shipment date. Therefore, for these preliminary results, the 
Department will use the order acknowledgment date as the date of sale 
for MS Galati's U.S. sales, and either the invoice date or shipment 
date, depending on which one takes place earlier, as the date of sale 
for MS Galati's home market sales. See the Analysis Memorandum for the 
Preliminary Results of the Administrative Review of the Antidumping 
Duty Order on Certain Cut-to-Length Carbon Steel Plate from Romania, 
dated August 31, 2006 (``Analysis Memo''), for further discussion of 
date of sale and other details on the calculation of the antidumping 
duty weighted-average margin. A public version of this memorandum is on 
file in the CRU.

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 NV, we 
compared the constructed export price (``CEP'') to the NV, as described 
in the ``Constructed Export Price'' and ``Normal Value'' sections of 
this notice. Therefore, pursuant to section 777A(d)(2) of the

[[Page 53379]]

Act, we compared the constructed export prices 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(16) of the Act, we considered all 
products covered by the ``Scope of the Order'' section above, which 
were produced and sold by MS Galati in the HM during the POR, to be 
foreign like product for the purpose of determining appropriate product 
comparisons to U.S. sales of subject merchandise. We relied on eight 
characteristics to match U.S. sales of subject merchandise to 
comparison sales of the foreign like product (listed in order of 
importance): (1) Painting; (2) quality; (3) specification and/or grade; 
(4) heat treatment; (5) standard thickness; (6) standard width; (7) 
whether or not checkered (floor plate); and (8) descaling. Where there 
were no sales of identical merchandise in the HM 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 listed 
in the Department's questionnaire. See Appendix V of the Department's 
antidumping duty questionnaire to MS Galati, dated October 13, 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, MS Galati has 
classified its sales as CEP. MS Galati identified one channel of 
distribution for U.S. sales: MS Galati through MEI to MSNA and then to 
unaffiliated U.S. customers, who are distributors. See ``Level of 
Trade'' section below for further analysis.
    For this sales channel, MS Galati has reported these sales as CEP 
sales because the first sale to an unaffiliated party occurred in the 
United States. Therefore, we based CEP on the packed duty paid prices 
to unaffiliated purchasers in the United States, in accordance with 
subsections 772(b), (c), and (d) of the Act. Where applicable, we made 
a deduction to gross unit price for billing adjustments. We made 
deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These deductions included, where appropriate, 
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 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 commissions) and indirect selling expenses. 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 HM 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 NV. 
Because the volume of HM 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 NV upon the HM sales of the foreign like product. 
Thus, we used as NV 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 (``LOT'') as the CEP sales, as 
appropriate. After testing HM viability, we calculated NV as noted in 
the ``Price-to-Price Comparisons'' section of this notice.

B. Cost of Production Analysis

    Based on a cost allegation submitted by the petitioner pursuant to 
section 351.301(d)(2)(ii) of the Department's regulations, we found 
reasonable grounds to believe or suspect that MS Galati made sales of 
the foreign like product at prices below the COP, as provided by 
section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by MS 
Galati. See Memorandum to Richard O. Weible, Director, through Abdelali 
Elouaradia, Program Manager, from John Drury and Dena Aliadinov, Case 
Analysts, and Ernest Gziryan, Case Accountant, regarding IPSCO Steel 
Inc.'s Allegation of Sales Below the Cost of Production for Mittal 
Steel Galati S.A., dated January 23, 2006, on file in the CRU. The 
Department has conducted an investigation to determine whether MS 
Galati made HM sales at prices below their COP during the POR within 
the meaning of section 773(b) of the Act. We conducted the COP analysis 
in the ``Calculation of Cost of Production'' section as described 
below.
    Because the Department initiated a sales-below-cost investigation, 
we instructed MS Galati to submit its response to Section D of the 
Department's Antidumping Questionnaire. MS Galati submitted its 
response to the Section D questionnaire on February 21, 2006, and its 
response to the Department's Section D supplemental questionnaire of 
March 15, 2006, on April 6, 2006.

1. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for the HM 
general and administrative (``G&A'') expenses, interest expenses, and 
packing expenses. We relied on the COP data submitted by MS Galati in 
its cost questionnaire responses with the following exceptions:
    - We corrected certain computer fields in MS Galati's cost database 
which were incorrectly reported due to clerical errors.
    - We increased the reported costs for byproduct revenue which was 
erroneously taken as an offset due to a clerical error.
    - We adjusted the transfer prices for certain inputs purchased from 
affiliated suppliers pursuant to section 773(f)(2) of the Act.
    - We revised the reported G&A expenses to include certain 
provisions and taxes. We adjusted the denominator used to calculate the 
G&A expense rate to account for changes in finished goods inventory.
    - In the reported cost database MS

[[Page 53380]]

Galati used the financial expense rate which was based on 2004 
financial statements of the parent Mittal Steel Company. We revised the 
reported financial expense rate to use the financial statements of 
Mittal Steel Company for the year 2005 because it most closely 
corresponds to the POR. In addition, we adjusted the reported financial 
expense rate to disallow offset for the short-term interest income 
because MS Galati did not provide supporting details for the claimed 
offset.
    - We applied the G&A and financial expense rates to the cost of 
manufacturing including packing expenses, because MS Galati did not 
remove packing costs from the denominators used to calculate these 
ratios.

2. Test of Home Market Sales Prices

    We compared the weighted-average COP for MS Galati to its HM sales 
prices of the foreign like product, as required under section 773(b) of 
the Act, to determine whether these sales were made at prices below the 
COP within an extended period of time (i.e., a period of one year) in 
substantial quantities and whether such prices were sufficient to 
permit the recovery of all costs within a reasonable period of time.
    On a model-specific basis, we compared the revised COP to the HM 
prices, less any applicable movement charges and direct and indirect 
selling expenses.

3. Results of the COP Test

    We disregarded below-cost sales where (1) 20 percent or more of MS 
Galati's sales of a given product during the POR were made at prices 
below the COP, 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 (2) based on comparisons of price 
to weighted-average COPs for the POR, 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. We found that MS Galati made sales below cost 
and we disregarded such sales where appropriate.

C. Arm's-Length Test

    MS Galati reported that it made sales in the HM 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 HM sales. Sales to 
affiliated customers in the HM not made at arm's length were excluded 
from our analysis. See section 351.403(c) of the Department's 
regulations. To test whether these sales were made at arm's length, we 
compared the starting prices of sales to affiliated and unaffiliated 
customers net of all billing adjustments and freight revenue, movement 
charges, direct selling expenses, discounts and rebates, 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. See Antidumping Proceedings - Affiliated Party Sales 
in the Ordinary Course of Trade, 67 FR 69186 (November 15, 2002).

D. Price-to-Price Comparisons

    We based NV on the HM sales to unaffiliated purchasers and sales to 
affiliated customers that passed the arm's-length test. We made 
adjustments, where appropriate, for physical differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. We 
made adjustments, where applicable, for movement expenses (i.e., inland 
freight from plant to distribution warehouse, inland freight from plant 
to customer, 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 HM packing costs and added U.S. packing costs. 
Finally, in accordance with section 773(a)(4) of the Act, where the 
Department was unable to determine NV on the basis of contemporaneous 
matches in accordance with section 773(a)(1)(B)(I) of the Act, we based 
NV on CV.
    During the sales verification in Romania, the Department was unable 
to verify inland freight expenses from the plant to the port of 
exportation (field DINLFTP1U in the U.S. market sales database). See MS 
Galati Sales Verification Report. Therefore, we have used the highest 
reported freight value contained in Verification Exhibit 33 for all of 
the U.S. market sales. See Analysis Memo, dated August 31, 2006, for 
further discussion of this and other adjustments we made as a result of 
our findings during the verifications.

Level of Trade

    In accordance with section 773(a)(1)(B)(I) of the Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same LOT as the EP or CEP transaction. See also section 
351.412 of the Department's regulations. The NV LOT is the level of the 
starting-price sales in the comparison market or, when NV is based on 
CV, the level of the sales from which we derive selling, general and 
administrative (``SG&A'') expenses and profits. For CEP sales, the U.S. 
LOT is the level of the constructed sale from the exporter to the 
affiliated importer. See section 351.412(c)(1)(ii) of the Department's 
regulations. As noted in the ``Constructed Export Price'' section 
above, we preliminarily find that all of MS Galati's sales through its 
U.S. affiliates are appropriately classified as CEP sales.
    To determine whether NV sales are at a different LOT than CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison market sales are at a 
different LOT than CEP sales, and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between sales on which NV is based and comparison market 
sales at the LOT of the export transaction, where possible, we make a 
LOT adjustment under section 773(a)(7)(A) of the Act. For CEP sales for 
which we are unable to quantify a LOT adjustment, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (``the CEP offset provision''). See Final Determination of 
Sales at Less Than Fair Value: Greenhouse Tomatoes from Canada, 67 FR 
8781 (February 26, 2002); see also 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 analyzing the differences in selling functions, we determine 
whether the LOTs identified by the respondent are meaningful. See 
Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 
27371 (May 19, 1997). If the claimed LOTs are the same, we expect that 
the functions and activities of the seller should be similar. 
Conversely, if a party claims that LOTs are different for different 
groups of sales, the functions and activities of the seller should be 
dissimilar. See Porcelain-on-Steel Cookware from Mexico: Final Results 
of Administrative Review, 65 FR 30068 (May 10, 2000) and

[[Page 53381]]

accompanying Issues and Decision Memorandum at Comment 6.
    To determine whether the comparison market sales were at different 
stages in the marketing process than the U.S. sales, we reviewed the 
channels of distribution in each market,\2\ including selling 
functions, class of customer (``customer category''), and the level of 
selling expenses for each type of sale. 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 one LOT 
with two channels of distribution in the HM: (1) sales to unaffiliated 
distributors and (2) sales to end users (affiliated and unaffiliated). 
See MS Galati's Section A Questionnaire Response (``AQR''), dated 
November 10, 2005, at pages 15 and 16, and MS Galati's February 23, 
2006, Supplemental Questionnaire Response (``SQR'') at pages 6 through 
8.
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    \2\ The marketing process in the United States and third country 
market begins with the producer and extends to the sale to the final 
user or customer. The chain of distribution between the two may have 
many or few links, and the respondent's sales occur somewhere along 
this chain. In performing this evaluation, we considered 
respondent's narrative response to properly determine where in the 
chain of distribution the sale occurs.
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    We examined the selling activities reported for each channel of 
distribution in the HM and we organized the reported selling activities 
into the following four selling functions: sales process and marketing 
support, freight and delivery, inventory maintenance and warehousing, 
and warranty and technical services. We found that MS Galati's level of 
selling functions to its HM customers for each of the four selling 
functions did not vary significantly by channel of distribution. See MS 
Galati's AQR at page 17 and Exhibit 5, MS Galati Sales Verification 
Report, and Verification Exhibit 1. For example, MS Galati provides 
similar levels of marketing and technical services to distributors and 
end users. Because channels of distribution do not qualify as separate 
LOTs when the selling functions performed for each customer class or 
channel are sufficiently similar, we determined that one LOT exists for 
MS Galati's HM sales.
    In the U.S. market, MS Galati made sales of subject merchandise to 
MSNA through MEI as the exporter of record, i.e., through one channel 
of distribution and it claimed only one LOT for its sales in the United 
States. See MS Galati's AQR at page 17 and Exhibit 5, the MS Galati 
Sales Verification Report, and Verification Exhibit 1. All U.S. sales 
were CEP transactions between MS Galati and its U.S. affiliate, MSNA, 
and MS Galati performed the same selling functions in its sales to the 
unaffiliated customers in each instance. Id. Therefore, we preliminary 
determine that MS Galati's U.S. sales constitute a single LOT.
    We then compared the selling functions performed by MS Galati on 
its CEP sales (after deductions made pursuant to 772 (d) of the Act) to 
the selling functions provided in the HM. We found that MS Galati 
provides significant selling functions related to the sales process and 
marketing support, and warranty and technical service in the HM, which 
it does not for MSNA in the U.S. market. In addition, the differences 
in selling functions performed for HM and CEP transactions indicate 
that MS Galati's HM sales involved a more advanced stage of 
distribution than CEP sales. In the HM, MS Galati provides marketing 
further down the chain of distribution by promoting certain downstream 
selling functions that are normally performed by the affiliated 
reseller in the U.S. market. On this basis, we determined that the HM 
LOT is at a more advanced stage of distribution when compared to CEP 
sales because MS Galati provides more selling functions in the HM at 
higher levels of service as compared to selling functions performed for 
its CEP sales. Thus, we find that MS Galati's HM sales are at a more 
advanced LOT than its CEP sales.
    Based upon our analysis, we preliminarily determine that CEP and 
the starting price of HM sales represent different stages in the 
marketing process, and are thus at different LOTs. Therefore, when we 
compared CEP sales to the comparison market sales, we examined whether 
an LOT adjustment may be appropriate. In this case, because MS Galati 
sold at one LOT in the HM, there is no basis upon which to determine 
whether there is a pattern of consistent price differences between 
LOTs. Further, we do not have the information which would allow us to 
examine the price patterns of MS Galati's sales of other similar 
products, and there is no other record evidence upon which a LOT 
adjustment could be based. Therefore, no LOT adjustment was made.
    Because the data available do not provide an appropriate basis for 
making a LOT adjustment and the LOT of MS Galati's HM sales is at a 
more advanced stage than the LOT of MS Galati's CEP sales, a CEP offset 
is appropriate in accordance with section 773(a)(7)(B) of the Act, as 
claimed by MS Galati. We based the amount of the CEP offset on HM 
indirect selling expenses, and limited the deduction for HM indirect 
selling expense to the amount of the indirect selling expenses deducted 
from CEP in accordance with section 772(d)(1)(D) of the Act. We applied 
the CEP offset to the NV-CEP comparisons.

Preliminary Results of Review

    We preliminarily determine that the following margin is the 
weighted-average antidumping duty margin of the POR:

----------------------------------------------------------------------------------------------------------------
                Manufacturer/Exporter                              POR                         Margin
----------------------------------------------------------------------------------------------------------------
Mittal Steel Galati, S.A............................           08/01/04 - 07/30/05     0.07 percent (de minimis)
----------------------------------------------------------------------------------------------------------------

Assessment

    The Department shall determine, and U.S. Customs and Border 
Protection (CBP) shall assess, antidumping duties on all appropriate 
entries. The Department will issue appropriate instructions directly to 
the CBP within 15 days of the publication of the final results of this 
review.
    On May 11, 2006, the Department sent a letter to Assistant 
Commissioner Jayson Ahern, CBP, to alert CBP to what appeared to be a 
number of premature liquidations of entries of merchandise. This issue 
arose after the completion of the 2003/2004 administrative review for 
cut-to-length carbon steel plate from Romania on February 10, 2006. On 
March 7, 2006, the Court of International Trade issued an injunction 
enjoining liquidation of entries covered under the 2003/2004 review. In 
response to instructions regarding the injunction, CBP informed the 
Department that the majority of entries covered by the review had 
already been liquidated. As a result, the Department made a customs 
inquiry regarding the entries of cut-to-length carbon steel plate from 
Romania for the instant review, and found that the majority of these 
entries were already liquidated as of April 21, 2006.

[[Page 53382]]

    Due to the premature liquidation of entries, the Department is 
considering whether to allocate the total antidumping duties over the 
remaining unliquidated entries, if the Department calculates an above 
de minimis weighted-average dumping duty margin in the final results of 
review. We invite interested parties to comment on this proposal.

Cash-Deposit Requirements

    Further, the following deposit requirements will be effective upon 
publication of the notice of final results of administrative review for 
all shipments of cut-to-length carbon steel plate entered, or withdrawn 
from warehouse, for consumption on or after the date of publication, as 
provided by section 751(a)(1) of the Act: (1) The cash-deposit rate for 
MS Galati will be the rate established in the final results of review, 
except if the rate is less than 0.50 percent and, therefore, de minimis 
within the meaning of section 351.106(c)(1) of the Department's 
regulations, in which case the cash deposit rate will be zero; (2) for 
previously reviewed or investigated companies not mentioned 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 less-than-fair-value 
(``LTFV'') investigation but the manufacturer is, then the cash-deposit 
rate will be the rate established for the most recent period for the 
manufacturer of the merchandise; and (4) if neither the exporter nor 
the manufacturer is a firm covered in this review, a prior review, or 
the LTFV investigation, the cash deposit rate will be 75.04 percent, 
the ``country-wide'' rate established in the less-than-fair-value 
investigation. These deposit requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.

Schedule for Final Results of Review

    The Department will disclose calculations performed for these 
preliminary results of review within five days of the date of 
publication of this notice in accordance with section 351.224(b) of the 
Department's regulations. Interested parties may submit case briefs 
and/or written comments no later than 30 days after the date of 
publication of these preliminary results of review. See section 
351.309(c)(ii) of the Department's regulations. Rebuttal briefs and 
rebuttals to written comments are limited to issues raised in such 
briefs or comments and may be filed no later than five days after the 
time limit for filing the case briefs or comments. See section 
351.309(d) of the Department's regulations. Parties submitting 
arguments in this proceeding are requested to submit with the argument: 
(1) A statement of the issue, (2) a brief summary of the argument, and 
(3) a table of authorities. Case and rebuttal briefs and comments must 
be served on interested parties in accordance with section 351.303(f) 
of the Department's regulations.
    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with section 351.310(c) of the 
Department's regulations. Unless otherwise specified, the hearing, if 
requested, will be held two days after the date for submission of 
rebuttal briefs, or the first business day thereafter. Individuals who 
wish to request a hearing must submit a written request within 30 days 
of the publication of this notice in the Federal Register to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, 14\th\ Street and Constitution Avenue, NW, 
Washington, DC 20230. Requests for a public hearing should contain: (1) 
The party's name, address, and telephone number; (2) the number of 
participants; and (3) to the extent practicable, an identification of 
the arguments to be raised at the hearing. If a hearing is held, an 
interested party may make an affirmative presentation only on arguments 
included in that party's case brief and may make a rebuttal 
presentation only on arguments included in that party's rebuttal brief. 
Parties should confirm by telephone the time, date, and place of the 
hearing within 48 hours before the scheduled time. The Department will 
issue the final results of this review, which will include the results 
of its analysis of issues raised in the briefs, not later than 120 days 
after the date of publication of this notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under section 351.402(f) of the Department's 
regulations 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 administrative review and this notice are published in 
accordance with sections 751(a)(1) and 777(I)(1) of the Act.

    Dated: August 31, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-14911 Filed 9-8-06; 8:45 am]
BILLING CODE 3510-DS-S