Certain Hot-Rolled Carbon Steel Flat Products From Thailand; Preliminary Results of Antidumping Duty Administrative Review and Rescission in Part, 65458-65465 [E6-18884]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 216 (Wednesday, November 8, 2006)]
[Notices]
[Pages 65458-65465]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-18884]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-817]


Certain Hot-Rolled Carbon Steel Flat Products From Thailand; 
Preliminary Results of Antidumping Duty Administrative Review and 
Rescission in Part

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to requests from United States Steel Corporation 
(petitioner), and Nucor Corporation (Nucor), the Department of Commerce 
(the Department) is conducting an administrative review of the 
antidumping duty order on certain hot-rolled carbon steel flat products 
(hot-rolled steel) from Thailand. This administrative review covers 
imports of subject merchandise produced and exported by Nakornthai 
Strip Mill Public Co., Ltd. (NSM), Sahaviriya Steel Industries Public 
Co., Ltd. (SSI), and G Steel Public Co., Ltd. (G Steel).
    We preliminarily determine that sales of subject merchandise by NSM 
have been made at not less than normal value (NV). In addition, we are 
preliminarily rescinding this review with respect to G Steel because it 
reported, and we confirmed, that it did not make shipments of subject 
merchandise to the United States during the period of review (POR). See 
Partial Rescission of Administrative Review below. Further, on April 
28, 2006, the Department rescinded this review with respect to SSI in 
accordance with 19 CFR 351.213(d)(1) because petitioner and Nucor 
withdrew their requests for administrative review within the 90-day 
deadline and no other party requested a review of SSI. See Partial 
Rescission of Antidumping Duty Administrative Review: Certain Hot-
Rolled Carbon Steel Flat Products from Thailand, 71 FR 25148 (April 28, 
2006).
    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 based on the difference 
between the export price (EP) and the NV. Interested parties are 
invited to comment on these preliminary results.

DATES: Effective Date: November 8, 2006.

FOR FURTHER INFORMATION CONTACT: Stephen Bailey or Richard Weible, AD/
CVD Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0193 or (202) 482-1103, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 29, 2001, the Department published the antidumping duty 
order on hot-rolled steel from Thailand. See Notice of Antidumping Duty 
Order: Certain Hot-Rolled Carbon Steel Flat Products From Thailand, 66 
FR 59562 (November 29, 2001) (Hot-Rolled Steel Order). On November 1, 
2005, the Department published the opportunity to request 
administrative review of, inter alia, hot-rolled steel from Thailand 
for the period November 1, 2004, through October 31, 2005. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 70 FR 
65883 (November 1, 2005).
    In accordance with 19 CFR 351.213(b)(1), on November 30, 2005, 
petitioner and Nucor requested that we conduct an administrative review 
of SSI's sales of the subject merchandise, while in the same letter 
petitioner requested that we also review sales of NSM and G Steel. On 
December 22, 2005, the Department published in the Federal Register a 
notice of initiation of this antidumping duty administrative review 
covering the period November 1, 2004, through October 31, 2005. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 70 FR 76024 (December 22, 
2005).
    On January 3, 2006, the Department issued its antidumping duty 
questionnaire to NSM, SSI, and G Steel. On January 13, 2006, G Steel 
submitted a no-shipment certification letter to the Department 
indicating that it had no sales of subject merchandise during the POR 
and requested a rescission of the administrative review. NSM submitted 
its section A questionnaire response (section A response) on February 
14, 2006, and its sections B & C questionnaire responses on February 
21, 2006 (sections B&C response). On March 7, 2006, the Department 
informed NSM by telephone that because a below cost allegation had not 
been made against NSM, and NSM did not participate in any previous 
administrative review or

[[Page 65459]]

the original investigation of the antidumping duty order, NSM was not 
required to submit a Section D response at that time. See section 
773(b)(2)(A)(i)(ii) of the Tariff Act of 1930, as amended (the Act), 
and Sec.  351.406 of the Department's Regulations. During this same 
telephone conversation, NSM informed the Department that it still 
intended to submit a section D response on behalf of NSM and did so on 
March 7, 2006 (section D response).\1\
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    \1\ See the Department's Memorandum to the File dated March 9, 
2006.
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    On March 22, 2006, petitioner and Nucor withdrew their requests for 
administrative review with respect to SSI. Because petitioner and Nucor 
withdrew their requests for an administrative review for SSI on March 
22, 2006, which was within the 90-day deadline mandated by 19 CFR 
351.213(d)(1), and no other party requested a review of SSI, the 
Department rescinded the administrative review with respect to SSI.\2\ 
See Partial Rescission of Antidumping Duty Administrative Review: 
Certain Hot-Rolled Carbon Steel Flat Products from Thailand, 71 FR 
25148 (April 28, 2006).
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    \2\ On November 30, 2005, pursuant to Sec.  351.213(j), Nucor 
requested that the Department determine whether SSI absorbed 
antidumping duties during the POR. Because the Department has 
rescinded this administrative review with respect to SSI, this issue 
is moot.
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    On March 27, 2006, petitioner and Nucor requested that the 
Department initiate a sales-below-cost investigation of home market 
sales made by NSM, which the Department did on April 24, 2006. See the 
Department's April 24, 2006 Memorandum to the File from Stephen Bailey, 
Case Analyst, to Richard Weible, Office Director, (Cost Initiation 
Memorandum).
    The Department issued a supplemental sections A through C 
questionnaire to NSM on April 10, 2006, and received NSM's response 
(sections A through C supplemental response) on May 1, 2006. The 
Department issued a second sections A through C supplemental 
questionnaire on May 23, 2006, and NSM submitted its response (second 
sections A through C supplemental response) on June 6, 2006. The 
Department issued a third section C supplemental questionnaire on July 
26, 2006, and NSM submitted its response on August 7, 2006 (third 
section C supplemental response).
    On May 11, 2006, David M. Spooner, Assistant Secretary for Import 
Administration, issued a letter to Jason Ahern, Assistant Commissioner 
of the Office of Field Operations for United States Customs and Border 
Protection (CBP), detailing the Department's concerns regarding the 
premature liquidation of certain entries that affect the present 
administrative review. In a letter dated June 8, 2006, Mr. Ahern 
replied to Mr. Spooner's letter, explaining that the importer of the 
subject merchandise may file a customs protest, with the entries in 
question held open until CBP receives liquidation instructions.
    The Department issued a supplemental section D questionnaire to NSM 
on June 5, 2006, and NSM submitted its response on June 30, 2006 
(section D supplemental response). The Department issued a second 
section D supplemental questionnaire on August 9, 2006, and NSM 
submitted its response on September 1, 2006 (second section D 
supplemental response). On July 21, 2006, NSM submitted its sales 
reconciliation.
    On August 3, 2006, the Department extended the due date for the 
preliminary results 60 days from August 2, 2006 until October 1, 2006. 
See Notice of Extension of Time Limit for Preliminary Results of 
Antidumping Duty Administrative Review: Certain Hot-Rolled Carbon Steel 
Flat Products From Thailand, 71 FR 44019 (August 3, 2006). On October 
6, 2006, the Department extended the due date for the preliminary 
results by an additional 30 days from October 1, 2006, until October 
31, 2006. See Notice of Extension of Time Limit for Preliminary Results 
of Antidumping Duty Administrative Review: Certain Hot-Rolled Carbon 
Steel Flat Products From Thailand, 71 FR 59073 (October 6, 2006).
    On August 15, 2006, NSM submitted a letter to the Department in 
which it requested that the Department determine whether there is a 
reviewable entry in the current administrative review.\3\ In brief, the 
Department preliminarily finds that NSM has reviewable entrie(s) in the 
current administrative review. For the Department's analysis of this 
issue see pages 4-5 of the memorandum Preliminary Results Analysis for 
Nakornthai Strip Mill Public Company Limited (NSM), from Stephen 
Bailey, Case Analyst, to the File, dated October 31, 2006 (Sales 
Analysis Memorandum).
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    \3\ The Department notes that NSM made a similar argument in its 
Section A response at pages A-1 through A-2.
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    On September 14, 2006, petitioner requested that the Department 
rescind this administrative review with request to NSM pursuant to 
section 351.213(d)(1) of the Department's regulations. On September 15, 
2006, NSM submitted comments regarding petitioner's request for 
rescission. Additionally, on September 20, 2006, Nucor submitted 
comments regarding petitioner's request for rescission. For a complete 
discussion of this issue see Petitioner's Request for Rescission of NSM 
section below. On October 17, 2006, petitioner again submitted a 
request for the Department to rescind this administrative review with 
respect to NSM.

Period of Review

    The period of review is November 1, 2004, through October 31, 2005.

Scope of the Order

    For purposes of this review, the products covered are certain hot-
rolled carbon steel flat products of a rectangular shape, of a width of 
0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight lengths, 
of a thickness of less than 4.75 mm and of a width measuring at least 
10 times the thickness. Universal mill plate (i.e., flat-rolled 
products rolled on four faces or in a closed box pass, of a width 
exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not 
less than 4.0 mm, not in coils and without patterns in relief) of a 
thickness not less than 4.0 mm is not included within the scope of this 
review.
    Specifically included within the scope of this review are vacuum 
degassed, fully stabilized (commonly referred to as interstitial-free 
(IF)) steels, high strength low alloy (HSLA) steels, and the substrate 
for motor lamination steels. IF steels are recognized as low carbon 
steels with micro-alloying levels of elements such as titanium or 
niobium (also commonly referred to as columbium), or both, added to 
stabilize carbon and nitrogen elements. HSLA steels are recognized as 
steels with micro-alloying levels of elements such as chromium, copper, 
niobium, vanadium, and molybdenum. The substrate for motor lamination 
steels contains micro-alloying levels of elements such as silicon and 
aluminum.
    Steel products to be included in the scope of this review, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTSUS), are products in which: (i) Iron predominates, by 
weight, over each of the other contained elements; (ii) the carbon 
content is 2 percent or less, by weight; and (iii) none of the elements

[[Page 65460]]

listed below exceeds the quantity, by weight, respectively indicated:
    1.80 percent of manganese, or 2.25 percent of silicon, or 1.00 
percent of copper, or 0.50 percent of aluminum, or 1.25 percent of 
chromium, or 0.30 percent of cobalt, or 0.40 percent of lead, or 1.25 
percent of nickel, or 0.30 percent of tungsten, or 0.10 percent of 
molybdenum, or 0.10 percent of niobium, or 0.15 percent of vanadium, or 
0.15 percent of zirconium.
    All products that meet the physical and chemical description 
provided above are within the scope of this review unless otherwise 
excluded. The following products, by way of example, are outside or 
specifically excluded from the scope of this review:

--Alloy hot-rolled steel products in which at least one of the chemical 
elements exceeds those listed above (including, e.g., American Society 
for Testing and Materials (ASTM) specifications A543, A387, A514, A517, 
A506).
--Society of Automotive Engineers (SAE)/American Iron & Steel Institute 
(AISI) grades of series 2300 and higher.
--Ball bearing steels, as defined in the HTSUS.
--Tool steels, as defined in the HTSUS.
--Silico-manganese (as defined in the HTSUS) or silicon electrical 
steel with a silicon level exceeding 2.25 percent.
--ASTM specifications A710 and A736.
--USS abrasion-resistant steels (USS AR 400, USS AR 500).
--All products (proprietary or otherwise) based on an alloy ASTM 
specification (sample specifications: ASTM A506, A507).
--Non-rectangular shapes, not in coils, which are the result of having 
been processed by cutting or stamping and which have assumed the 
character of articles or products classified outside chapter 72 of the 
HTSUS.

    The merchandise subject to this review is classified in the HTSUS 
at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products covered by this review, 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 CBP purposes, the written 
description of the merchandise under review is dispositive.

Petitioner's Request for Rescission of NSM

    In its September 14, 2006, and October 17, 2006, letters to the 
Department, petitioner requests that the Department rescind this 
administrative review with respect to NSM. In both requests, petitioner 
argues that even though the 90-day deadline imposed by 19 CFR 
351.213(d)(1) to request a rescission of the administrative review has 
passed, the Department has yet to issue preliminary results and has not 
conducted a verification of NSM's submissions. Petitioner maintains 
that if the administrative review goes forth, the Department will 
expend valuable resources including analyzing case and rebuttal briefs, 
conduct a hearing and prepare final results. Additionally, petitioner 
contends that the Department will expend its resources for a proceeding 
in which the only party to request the review does not wish it to 
proceed. Therefore, petitioner argues that it would not be unreasonable 
to extend the deadline imposed by 19 CFR 351.213(d)(1) and rescind the 
review.
    In response to petitioner's rescission request of September 14, 
2006, NSM contends that petitioner did not offer a single legitimate 
reason or justification for terminating this review and that it would 
be unreasonable to rescind the review at this late date. NSM argues 
that petitioner's rescission request came 266 days after initiation, 
and five and one half months after the 90 days allowed by law under 19 
CFR 351.213(d)(1). NSM also contends that the Department had to extend 
the preliminary results 60 days due to the submission of deficiency 
comments by petitioner. Further, NSM maintains that the only reason 
petitioner has chosen to withdraw at such a late date is that 
petitioner has determined that NSM would have a de minimis margin and 
petitioner is trying to ``game'' the system. See page 3 of NSM's 
September 15, 2006 submission. NSM contends that both it and the 
Department have committed an enormous amount of time and resources to 
this administrative review. Citing the preamble to the Department's 
regulations, NSM maintains that the Department has the ability to deny 
rescission requests when it determines that a party withdraws its 
review request ``once it ascertains that the results of the review are 
not likely to be in its favor.'' See Antidumping Duties; Countervailing 
Duties Part II, 62 FR 27296, 27317 ( May 19, 1997). Additionally, NSM 
cites Huaiyang Hongda Dehydrated Vegetable Co. v. United States, in 
which the U.S. Court of International Trade (CIT) recognized the 
interests of a party that had not requested a review but had devoted 
considerable time and resources. See Huaiyang Hongda Dehydrated 
Vegetable Co. v. United States, Court No. 03-00636, Slip Op. at 15 (Ct 
Int'l Trade 2004) (Huaiyang). In that case, NSM argues, the CIT 
reasoned that the participation of the respondent amounted to a 
``sufficient expression of interest in completing the administrative 
review that its rescission would be unlawful.'' NSM argues that the 
same situation exists in the present case as it has already expended an 
enormous amount of time and resources necessary to fully cooperate with 
the Department's information requests. In sum, NSM believes that to 
rescind at this point in the proceeding would violate its right to 
fundamental fairness and, therefore, contends that the Department 
should continue with this administrative review.
    Section 315.213(d)(1) of the Department's regulations states that 
the Department will rescind an administrative review if the party that 
requested the review withdraws the request within 90-days of initiation 
of the review. The Department may extend this period if it determines 
that it is reasonable to do so, and will evaluate the resources it has 
expended in the review in making its ``reasonable'' determination. 
While the petitioner's request was received prior to the issuance of 
the preliminary results and the Department did not conduct 
verification, the Department issued multiple supplemental 
questionnaires, initiated a sales below cost investigation, and 
committed valuable time and resources in conducting this review. 
Additionally, as a result of both petitioner's and Nucor's supplemental

[[Page 65461]]

questionnaire comments, including Nucor's March 10, 2006, comments 
regarding possible affiliation, the Department determined it was not 
practicable to complete this review by the August 2, 2006, deadline.\4\
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    \4\ The Department notes that it disagrees with NSM's 
interpretation of Huaiyang. The Court in Huaiyang noted that 
Commerce's determination to rescind an administrative review over 
the objection of a respondent, which has not filed its own request 
for a review is not without precedent. Slip op. at 13.
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    For all of the above reasons, the Department determines that to end 
the process now would be unreasonable in light of the time and 
resources already put forth by all parties involved. Therefore, the 
Department denies petitioner's request because it has already expended 
considerable resources for this administrative review.

Partial Rescission of Administrative Review

    As explained above, on January 13, 2006, G Steel submitted a letter 
claiming it had no sales to the United States during the POR. The 
Department conducted a query of U.S. Customs and Border Protection 
(CBP) data on entries of hot-rolled steel from Thailand made during the 
POR, and confirmed that G Steel made no entries during this period. 
Therefore, we are preliminarily rescinding this review with respect to 
G Steel in accordance with section 351.213(d)(3) of the Department's 
regulations.

Affiliation

    On March 10, 2006, Nucor submitted comments in which it claimed 
that NSM is affiliated with the Thai conglomerate Siam Cement Group 
(Siam). Along with its comments Nucor also submitted documentation 
(e.g., annual reports and internet company profiles) in support of its 
claim of affiliation between NSM and Siam. Specifically, Nucor argues 
that affiliation exists between NSM and Siam because Siam (also 
referred to as Cementhai in the internet profile from MBendi 
Information for Africa: Mines and Money 2005 (MBendi) provided in 
Nucor's attachments) ``has a share'' in Millennium Steel Public Company 
Limited (Millennium). See Attachment B at page 1 of Nucor's March 10, 
2006, submission. In turn, Millennium owns 99.66 percent of the shares 
of NTS Steel Group Public Company Limited (NTS), which has the same 
corporate address as NSM. See Attachment C at page 1 of Nucor's March 
10, 2006, submission for ownership percentages; and page 8 of NSM's 
section A response and Attachment E at page 1 of Nucor's March 10, 
2006, submission for company addresses. Additionally, Mr. Sawasdi 
Horrungruang is a chairman of Millennium and a director of NSM and was 
quoted in a publication as saying that NSM is part of the NTS Steel 
Group. See Exhibit 4 of NSM's section A response; and pages 3 through 5 
of Nucor's March 10, 2006, submission. Based on these relationships, 
Nucor contends that NSM is affiliated with Siam and should be reported 
to the Department as such by NSM.
    Section 771(33) of the Act, explains that the following shall be 
considered ``affiliated'' or ``affiliated persons'':

    (A) Member of a family, including brothers and sisters, spouse, 
ancestors, and lineal descendants;
    (B) Any office or directors of an organization and such 
organization;
    (C) Partners;
    (D) Employer and employee;
    (E) Any person directly or indirectly owning, controlling, or 
holding with power to vote, 5 percent or more of the outstanding 
voting stock or shares of any organization and such organization;
    (F) Two or more persons directly or indirectly controlling, 
controlled by, or under common control with, any person;
    (G) Any person who controls any other person and such other 
person.

    The Department preliminarily finds that NSM and Siam are not 
affiliated companies within the meaning of section 771(33).
    As explained by NSM on pages 8 through 11 of its May 1, 2006, 
sections A through C supplemental response, NSM is not listed as a 
related company in the notes to Siam's 2004-2005 Financial Statements. 
NSM also does not consider Siam to be a related company as demonstrated 
by Siam's absence from NSM's list of related companies in exhibit 4 of 
its section A response. Additionally, Siam and NSM do not share common 
directors or board members, also demonstrated in Siam's 2005 Annual 
Report contained in exhibit S1A-4 of NSM's May 1, 2006, sections A 
through C supplemental response. Further, Siam and NSM do not have 
common shareholders as demonstrated in exhibit S1A-4 of NSM's May 1, 
2006, sections A through C supplemental response, nor is there evidence 
of shared family members, directors, partners, or employees between 
Siam and Millennium. Absent evidence to the contrary, the Department 
finds no link and thus no evidence of direct affiliation between NSM 
and Siam to satisfy the requirements of section 771(33).
    With regard to possible indirect affiliation between Siam and NSM 
through Millennium or NTS, the Department does not have enough 
information on the record to make a determination at this time. Pending 
the publication of these preliminary results, the Department will 
solicit additional information from NSM regarding the issue of 
affiliation and make its determination in the final results.

Fair Value Comparisons

    To determine whether sales of subject merchandise were made in the 
United States at less than fair value, we compared the EP to the NV, as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
calculated EP and compared these prices to weighted-average normal 
values or constructed values (CV), as appropriate.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by NSM covered by the descriptions in the ``Scope of 
the Order'' section of this notice to be foreign like products for the 
purpose of determining appropriate product comparisons to NSM's U.S. 
sales of the subject merchandise.
    We have relied on the following eleven criteria to match U.S. sales 
of the subject merchandise to sales in Thailand of the foreign like 
product: Paint, quality, carbon, yield strength, thickness, width, cut-
to-length vs. coil, temper rolled, pickled, edge trim, and patterns in 
relief.
    Where there were no sales of identical merchandise in the home 
market to compare to U.S. sales, we compared U.S. sales to the next 
most similar foreign like product on the basis of the characteristics 
and reporting instructions listed in the Department's January 3, 2006, 
questionnaire.

Export Price

    In accordance with section 772 of the Act, we calculate either an 
EP or a constructed export price (CEP), depending on the nature of each 
sale. Section 772(a) of the Act defines EP as the price at which the 
subject merchandise is first sold by the foreign exporter or producer 
before the date of importation to an unaffiliated purchaser in the 
United States, or to an unaffiliated purchaser for exportation to the 
United States. We have preliminarily determined that all of NSM's U.S. 
sales during the POR were EP sales.
    We calculated EP based on prices charged to the first unaffiliated 
U.S. customer. We used the sale invoice date

[[Page 65462]]

as the date of sale.\5\ We based EP on the packed freight on board 
(FOB) prices to the first unaffiliated purchasers outside Thailand. We 
made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act, including foreign inland freight and foreign 
brokerage and handling.
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    \5\ See the Department's Sales Analysis Memorandum for a further 
discussion of this issue.
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Duty Drawback

    Section 772(c)(1)(B) of the Act provides that EP shall be increased 
by ``the amount of any import duties imposed by the country of 
exportation which have been rebated, or which have not been collected, 
by reason of the exportation of the subject merchandise to the United 
States.'' The Department determines that an adjustment to U.S. price 
for claimed duty drawback is appropriate when a company can demonstrate 
that (1) the import duty and the rebate are directly linked to, and 
dependent upon, one another, and (2) there are sufficient imports of 
the imported material to account for the duty drawback received for the 
export of the manufactured product (the ``two pronged test''). See 
Allied Tube and Conduit Corp. v. United States, 374 F. Supp. 2d 1257 
(2005), and Rajinder Pipes Ltd. v. United States, 70 F. Supp. 2d 1350, 
1358 (CIT 1999). See also Certain Welded Carbon Standard Steel Pipes 
and Tubes from India: Final Results of New Shippers Antidumping Duty 
Administrative Review, 62 FR 47632 (September 10, 1997) and Federal 
Mogul Corp. v. United States, 862 F. Supp. 384, 409 (CIT 1994).
    During the POR, NSM received duty drawback for its U.S. sales using 
the tax certificate program, which is based on periodic industrial 
surveys performed by the Thai National Economic and Social Development 
Board (NESDB). The Thai Ministry of Finance (MOF), on an industry-wide 
basis, determines specific duty incidence rates for duty drawback that 
vary based on product. Under the duty drawback program, MOF links a 
certain percentage of the FOB value of the goods attributable to import 
duties incurred in the exported product's manufacture, regardless of 
product destination. See pages C-29 through 31 of the sections B&C 
response. When the goods are exported, a tax certificate is issued 
equivalent to the duty amount collected on the imported material used 
to manufacture the exported product. NSM provided documentation along 
with its sections B&C response demonstrating the link between the 
import duty and the rebate, including the Thai Government list of 
rebate amount based on HTSUS number, Tax Certificate, Details of 
Exported Goods and Request for Tax Certificate, Export Entry Form, and 
accompanying commercial invoices for all U.S. sales. See exhibit S1C-3 
of the sections B&C response.
    Consistent with the Department's decision in Final Determination of 
Sales at Less Than Fair Value: Oil Country Tubular Good from Korea, 60 
FR 33561 (June 28, 1995) (OCTG From Korea), to allow duty drawback even 
though the respondent could not link the particular exportation of 
subject merchandise back to a particular imported material, the 
Department preliminarily determines that NSM uses a methodology 
consistent with Department practice for applying its duty drawback 
received upon export of subject merchandise to the United States. MOF's 
linkage of a certain percentage of the FOB value of the goods 
attributable to import duties incurred in the exported product's 
manufacture satisfies the linkage requirement consistent with OCTG From 
Korea, as does the tax certificate issued when the goods are exported, 
equivalent to the duty amount collected on the imported material used 
to manufacture the exported product. See Far East Mach. II v. United 
States, 699 F.Supp. 309, 312 (1988). Based on NSM's explanation and the 
supporting documentation, the Department preliminarily finds a link 
between the import duty and the rebate granted to NSM, thereby 
satisfying the first criterion of the Department's two-pronged test for 
duty drawback.
    NSM also meets the second criterion of the Department's two-pronged 
test for duty drawback. NSM provided its POR purchases of raw material 
(i.e., scrap and pig iron) in exhibit 3 of its second sections A 
through C supplemental response. It is clear from this exhibit that the 
POR amount of NSM's imported raw materials, converted to hot-rolled 
production in metric tons (MT), exceeds NSM's total exports of hot-
rolled steel during the POR.\6\ Accordingly, NSM has satisfied the 
second criterion of the Department's two-pronged test for duty 
drawback. Therefore, the Department preliminarily finds that for NSM's 
U.S. sales, the company uses a methodology consistent with Department 
practice for applying duty drawback received upon export of subject 
merchandise to the United States. See OCTG From Korea.
---------------------------------------------------------------------------

    \6\ Due to the proprietary nature of the amounts of NSM's 
purchases of raw materials and NSM's production of hot-rolled steel, 
a complete discussion of this issue is found at page 10 of the 
October 31, 2006, Sales Analysis Memorandum.
---------------------------------------------------------------------------

Normal Value

A. Home Market Viability

    To determine whether there is a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV, we compared 
NSM's volume of home market sales of the foreign like product to the 
volume of U.S. sales of the subject merchandise, in accordance with 
section 773(a)(1)(B) of the Act. Because NSM'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 the home market was viable. See section A response at 
exhibit 1.

B. Cost of Production Analysis

    On April 24, 2006, after a request from petitioner and Nucor, the 
Department initiated a sales-below-cost investigation of NSM because 
both petitioner and Nucor provided a reasonable basis to believe or 
suspect that NSM is selling hot-rolled steel in Thailand at prices 
below the cost of production (COP). See the Department's Cost 
Initiation Memorandum. Based on the Department's findings in the Cost 
Initiation Memorandum there is a reasonable basis to believe or suspect 
that NSM is selling hot-rolled steel in Thailand at prices below COP, 
and in accordance with section 773(b)(1) of the Act, we examined 
whether NSM's sales in the home market were made at prices below the 
COP.
    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP for each model based on the sum of NSM's material 
and fabrication costs for the foreign like product, plus amounts for 
selling expenses, general and administrative (G&A) expenses, interest 
expenses and packing costs.
    We relied on the COP information provided by NSM except for the 
following adjustments. During the POR, NSM purchased scrap from 
affiliated companies. For scrap purchased from one of these affiliated 
companies, we applied the major input rule under section 773(f)(3) of 
the Act and adjusted the reported cost to the higher of transfer price, 
market price or COP. We adjusted NSM's reported cost by excluding the 
fiscal year loss on the sale of scrap from NSM's G&A expenses, and 
including the POR loss on the sale of scrap in cost of manufacturing 
(COM). In addition, we excluded the offset for sales revenue derived 
from scrap coils and baby coils from the G&A expense ratio, and 
included revenue from these sales as an offset to NSM's reported

[[Page 65463]]

COM. We also excluded offsets for income from storage and bank charges, 
penalties, and inland freight charges from the G&A expense ratio 
because these offsets are related to sales activities. Last, we 
deducted the scrap recovery value from NSM's cost of goods sold, which 
is used as the denominator in the calculation of the G&A and financial 
expense rates. For further discussion of these adjustments, see 
Memorandum to Neal Halper, from Oh Ji Young, regarding Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results, on file in the Department's CRU located in Room B-
099 of the main Department of Commerce Building, 14th Street and 
Constitution Avenue, NW., Washington, DC CRU, dated October 31, 2006.
    We compared the weighted-average COP figures to the 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 COP. On a product-specific basis, we compared COP to home 
market prices, less any applicable movement charges, billing 
adjustments, taxes, and discounts and rebates.
    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) of the Act, whether such sales were made in 
substantial quantities within an extended period of time, and 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. 
Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent 
of NSM's home market sales of a given model were made at prices below 
the COP, we did not disregard any below-cost sales of that model 
because we determined that the below-cost sales were not made within an 
extended period of time in ``substantial quantities.'' Where 20 percent 
or more of NSM's home market sales of a given model were at prices less 
than COP, we disregarded 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.
    Our cost test for NSM revealed that for home market sales of 
certain models, less than 20 percent of the sales of those models were 
made at prices below the COP. We therefore retained all such sales in 
our analysis and used them as the basis for determining NV. Our cost 
test also indicated that for certain models, more than 20 percent of 
the home market sales of those models were sold at prices below COP 
within an extended period of time and were at prices which would not 
permit the recovery of all costs within a reasonable period of time. 
Thus, in accordance with section 773(b)(1) of the Act, we excluded 
these below-cost sales from our analysis and used the remaining above-
cost sales as the basis for determining NV.

C. Price-to-Price Comparisons

    We matched all U.S. sales to NV sales. We calculated NV based on 
prices to unaffiliated customers. We adjusted gross unit price for 
billing adjustments. We made deductions, where appropriate, for foreign 
inland freight pursuant to section 773(a)(6)(B) of the Act. In 
addition, we made adjustments for differences in cost attributable to 
differences in physical characteristics of the merchandise, pursuant to 
section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411, as well as for 
differences in circumstances of sale (COS) as appropriate, in 
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410. Finally, we deducted home market packing costs and added U.S. 
packing costs in accordance with sections 773(a)(6)(A) and (B) of the 
Act.

D. Price-to-CV Comparisons

    In accordance with section 773(a)(4) of the Act, we based NV on CV 
if we were unable to find a contemporaneous comparison market match for 
the U.S. sale. We calculated CV based on the cost of materials and 
fabrication employed in producing the subject merchandise, selling, 
general and administrative (SG&A) expenses, interest expense and 
profit. In accordance with section 773(e)(2)(A) of the Act, we based 
SG&A expenses, interest and profit on the amounts NSM incurred and 
realized in connection with the production and sale of the foreign like 
product in the ordinary course of trade for consumption in Thailand. 
For selling expenses, we used the weighted-average home market selling 
expenses. Where appropriate, we made COS adjustments to CV in 
accordance with section 773(a)(8) of the Act and 19 CFR 351.410 of the 
Department's regulations.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP transaction or CEP transaction. 
The LOT in the comparison market is the LOT of the starting-price sales 
in the comparison market or, when NV is based on CV, the LOT of the 
sales from which we derive SG&A expenses and profit. With respect to 
U.S. price for EP transactions, the LOT is also that of the starting-
price sale, which is usually from the exporter to the importer. For 
CEP, the LOT is that of the constructed sale from the exporter to the 
importer.
    To determine whether comparison market sales are at a different LOT 
from U.S. 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 comparison market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison market sales at the LOT of 
the export transaction, the Department makes an LOT adjustment in 
accordance with section 773(a)(7)(A) of the Act. For CEP sales, we 
examine stages in the marketing process and selling functions along the 
chain of distribution between the producer and the customer. We analyze 
whether different selling activities are performed, and whether any 
price differences (other than those for which other allowances are made 
under the Act) are shown to be wholly or partly due to a difference in 
LOT between the CEP and NV. Under section 773(a)(7)(A) of the Act, we 
make an upward or downward adjustment to NV for LOT if the difference 
in LOT involves the performance of different selling activities and is 
demonstrated to affect price comparability, based on a pattern of 
consistent price differences between sales at different LOTs in the 
country in which NV is determined. Finally, if the NV LOT is at a more 
advanced stage of distribution than the LOT of the CEP, but the data 
available do not provide an appropriate basis to determine an LOT 
adjustment, we reduce NV by the amount of indirect selling expenses 
incurred in the foreign comparison market on sales of the foreign like 
product, but by no more than the amount of the indirect selling 
expenses incurred for CEP sales. See section 773(a)(7)(B) of the Act 
(the CEP offset provision).
    In analyzing 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

[[Page 65464]]

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). In the present review, NSM did not claim a LOT 
adjustment. See Sections B&C response at B-25.
    NSM claimed one LOT in the U.S. market and one LOT in the home 
market, with both LOTs involving sales to unaffiliated customers. NSM 
claimed that all U.S. sales are made to an unaffiliated trading 
company. NSM reported 2 channels of distribution for home market sales 
made through its single LOT. The first channel of distribution was 
sales made through unaffiliated wholesaler/trading companies to 
unaffiliated end-users. The second channel of distribution was sales 
made directly to unaffiliated end-users.
    Whether made directly to end-users or through wholesalers/
distributors, the Department finds that NSM reported similar selling 
activities for all home market sales. While NSM's direct sales to end-
users and downstream sales in the home market involve different 
channels of distribution, these sales do not appear to involve 
significant differences in selling functions and therefore we consider 
these channels to represent one LOT. Additionally, after analyzing the 
selling functions NSM reported for its EP sales, we find that, apart 
from commissions paid for U.S. sales and for limited inventory provided 
on home market sales, the selling functions for NSM's EP sales is the 
same as the LOT for all sales in the home market. Based upon the above 
analysis, we preliminarily conclude that the LOT for all EP sales is 
the same as the LOT for all sales in the home market. Accordingly, 
because we find the U.S. sales and home market sales to be at the same 
LOT, no LOT adjustment under section 773(a)(7)(A) of the Act is 
warranted for NSM. Due to the proprietary nature of the levels of these 
selling activities, for further analysis, see Sales Analysis 
Memorandum.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) 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 our review, we preliminarily determine the weighted-
average dumping margin for the period November 1, 2004, through October 
31, 2005, to be as follows:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
Nakornthai Strip Mill Public Co., Ltd......................         0.00
------------------------------------------------------------------------

    The Department will disclose calculations performed in connection 
with these preliminary results of review within five days of the date 
of publication of this notice in accordance with 19 CFR 351.224(b). 
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 19 CFR 351.309(c)(ii). Rebuttal briefs and 
rebuttals to written comments, limited to issues raised in the case 
briefs and comments, may be filed no later than 35 days after the date 
of publication of this notice. See 19 CFR 351.309(d). Parties who 
submit argument in these proceedings 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. See 19 CFR 351.309(c). An 
interested party may request a hearing within 30 days of publication. 
See section 351.310(c) of the Department's regulations. Any hearing, if 
requested, will be held two days after the scheduled date for 
submission of rebuttal briefs. See 19 CFR 351.310(d). The Department 
will issue the final results of these preliminary results, including 
the results of our analysis of the issues raised in any such written 
comments or at a hearing, within 120 days of publication of these 
preliminary results, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of this review the Department shall determine, and 
CBP shall assess, antidumping duties on all appropriate entries. 
Pursuant to 19 CFR 351.212(b)(1), the Department calculates an 
assessment rate for each importer of the subject merchandise for each 
respondent. The Department intends to issue assessment instructions to 
CBP 15 days after the date of publication of the final results of 
review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). See Antidumping and Countervailing Duty 
Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 
2003). This clarification will apply to entries of subject merchandise 
during the period of review produced by NSM or by any of the companies 
for which we are rescinding this review and for which NSM or each no-
shipment respondent did not know its merchandise would be exported by 
another company to the United States. In such instances, we will 
instruct CBP to liquidate unreviewed entries at the all-others rate if 
there is no rate for the intermediate company(ies) involved in the 
transaction.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review 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 the rate listed in the final results of review; (2) for 
previously 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 less-than-fair-value (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 the ``all others'' rate 
of 3.86 percent, which is the ``all others'' rate established in the 
LTFV investigation. See Hot Rolled Steel Order. 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)(2) 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.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.


[[Page 65465]]


     Dated: October 31, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-18884 Filed 11-7-06; 8:45 am]
BILLING CODE 3510-DS-P