Certain Hot-Rolled Carbon Steel Flat Products From Thailand: Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission, 69187-69193 [E7-23806]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 235 (Friday, December 7, 2007)]
[Notices]
[Pages 69187-69193]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23806]


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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 
Partial Rescission

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests from United States Steel Corporation 
(petitioner), Nucor Corporation (Nucor), and G Steel Public Company 
Limited (G Steel), 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. With regard to the two Thai companies that are subject to 
this administrative review, G Steel and Nakornthai Strip Mill Public 
Company Limited (NSM), we preliminarily determine that sales of subject 
merchandise produced by G Steel have not been made at less than normal 
value (NV) and that NSM did not have any shipments, entries, or sales 
of subject merchandise during the period of review (POR). Therefore, 
this administrative review covers imports of subject merchandise 
produced and exported by G Steel, and we are preliminarily rescinding 
the review with respect to NSM. For a full discussion of the intent to 
rescind with respect to NSM, 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: December 7, 2007.

FOR FURTHER INFORMATION CONTACT: Dena Crossland or Stephen Bailey, 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-
3362 or (202) 482-0193, 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, 
2006, the Department published the opportunity to request 
administrative review of, inter alia, the order on hot-rolled steel 
from Thailand for the period November 1, 2005, through October 31, 
2006. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
71 FR 64240 (November 1, 2006).
    In accordance with 19 CFR 351.213(b)(1), on November 28, 2006, 
petitioner requested that we conduct an administrative review of NSM's 
sales of subject merchandise. On November 30, 2006, Nucor, a domestic 
interested party, requested an administrative review of NSM's or NSM's 
affiliate's sales of subject merchandise, and G Steel requested an 
administrative review of its sales of subject merchandise. On December 
27, 2006, the Department published in the Federal Register a notice of 
initiation of this antidumping duty administrative review covering the 
period November 1,

[[Page 69188]]

2005, through October 31, 2006. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 71 FR 77720 (December 27, 
2006).
    On January 3, 2007, the Department issued its antidumping duty 
questionnaire to G Steel and NSM. G Steel submitted its section A 
questionnaire response (section A response) on February 7, 2007, and 
its section B and C questionnaire responses on February 21, 2007 
(section B&C responses). On January 4, 2007, the Department informed G 
Steel by telephone that it was not required to submit a Section D 
response at that time. See the Department's Memorandum to the File, 
dated January 4, 2007. On January 11, 2007, NSM stated in a letter that 
it did not have any U.S. sales, shipments or entries of subject 
merchandise during the above-referenced administrative review, and 
requested that the Department rescind the administrative review with 
respect to NSM. On March 5, 2007, G Steel submitted additional 
information in response to section B of the Department's antidumping 
duty questionnaire with regard to its resale information, and provided 
its sales reconciliation in the same submission. On April 19, 2007, G 
Steel submitted its revised sales reconciliation.
    On March 26, 2007, petitioner and Nucor requested that the 
Department initiate a sales-below-cost investigation of home market 
(HM) sales made by G Steel, which the Department did on May 30, 2007. 
See the Department's Memorandum to the File from Sheikh Hannan, Office 
of Accounting, and Stephen Bailey and Dena Crossland, Analysts, to 
Richard Weible, Office Director, regarding Petitioners' Allegation of 
Sales Below the Cost of Production for G Steel Public Company Limited 
(Cost Initiation Memorandum), dated May 30, 2007. In the Cost 
Initiation Memorandum, the Department requested that G Steel respond to 
section D of the Department's antidumping duty questionnaire.
    On June 20, 2007, the Department issued its first sections A 
through C supplemental questionnaire to G Steel, and received G Steel's 
response (first sections A through C supplemental response) on July 11, 
2007.
    On June 27, 2007, in response to the Department's Cost Initiation 
Memorandum, G Steel submitted its section D questionnaire response.
    On August 1, 2007, the Department issued its first section D 
supplemental questionnaire to G Steel, and received G Steel's response 
on August 15, 2007 (first section D supplemental response). On August 
9, 2007, the Department issued its second sections A through C 
supplemental questionnaire to G Steel, and received G Steel's response 
on August 27, 2007 (second sections A through C supplemental response). 
In the first and second sections A through C supplemental 
questionnaires, the Department requested information about G Steel's 
relationship with NSM.\1\ On September 19, 2007, the Department issued 
its second section D supplemental questionnaire to G Steel, and 
received G Steel's response on October 3, 2007 (second section D 
supplemental response).
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    \1\ While the Department determines that G Steel and NSM became 
affiliated at the end of the POR, it does not find that the 
requirements are met in this review for collapsing the two 
companies, but may revisit this issue, if necessary, in any 
subsequent reviews.
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    On July 24, 2007, the Department extended the due date for the 
preliminary results 120 days from August 2, 2007, until November 30, 
2007. See Certain Hot-Rolled Carbon Steel Flat Products from Thailand: 
Notice of Extension of Time Limit for the Preliminary Results of the 
Antidumping Duty Administrative Review, 72 FR 40274 (July 24, 2007).

Period of Review

    The POR is November 1, 2005, through October 31, 2006.

Scope of the Order

    For purposes of this order, the products covered are certain hot-
rolled carbon steel flat products of a rectangular shape, of a width of 
0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight 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 
order.
    Specifically included within the scope of this order 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 order, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTSUS), are products in which: i) iron predominates, by 
weight, over each of the other contained elements; ii) the carbon 
content is 2 percent or less, by weight; and iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:
    1.80 percent of manganese, or
    2.25 percent of silicon, or
    1.00 percent of copper, or
    0.50 percent of aluminum, or
    1.25 percent of chromium, or
    0.30 percent of cobalt, or
    0.40 percent of lead, or
    1.25 percent of nickel, or
    0.30 percent of tungsten, or
    0.10 percent of molybdenum, or
    0.10 percent of niobium, or
    0.15 percent of vanadium, or
    0.15 percent of zirconium.
    All products that meet the physical and chemical description 
provided above are within the scope of this order unless otherwise 
excluded.
    The following products, by way of example, are outside or 
specifically excluded from the scope of this order:
    -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

[[Page 69189]]

articles or products classified outside chapter 72 of the HTSUS.
    The merchandise subject to this order is currently 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 
order, including: vacuum degassed fully stabilized; high strength low 
alloy; and the substrate for motor lamination steel may also enter 
under the following tariff numbers: 7225.11.00.00, 7225.19.00.00, 
7225.30.30.50, 7225.30.70.00, 7225.40.70.00, 7225.99.00.90, 
7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 7226.19.10.00, 
7226.19.90.00, 7226.91.50.00, 7226.91.70.00, 7226.91.80.00, and 
7226.99.01.80. 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.

Notice of Intent To Rescind Review in Part

    Pursuant to 19 CFR 351.213(d)(3), 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, 18611-12 (April 
10, 2001). On January 11, 2007, NSM stated in a letter that it did not 
have any U.S. sales, shipments or entries of subject merchandise during 
the above-referenced administrative review, and requested that the 
Department rescind the administrative review with respect to NSM. The 
Department conducted a U.S. Customs and Border Protection (CBP) data 
inquiry. CBP only responds to the Department's inquiry when CBP finds 
that there have been shipments. CBP did not respond to the Department's 
inquiry, and no party submitted comments. Based on this information, 
the Department determined that there were no identifiable entries of 
hot-rolled steel during the POR manufactured or exported by NSM. See 
Memorandum to the File, through Angelica Mendoza, Program Manager, from 
Dena Crossland: Nakornthai Strip Mill Public Company Limited - No 
Shipments of Certain Hot-Rolled Carbon Steel Flat Products from 
Thailand Pursuant to U.S. Customs and Border Protection Inquiry, dated 
June 6, 2007. Therefore, the Department concludes that during the POR, 
NSM did not have any entries, exports, or sales of subject merchandise 
to the United States, and accordingly we are preliminarily rescinding 
the review with respect to NSM.

Verification

    As provided in section 782(i) of the Tariff Act of 1930, as amended 
(the Act), and 19 CFR 351.307, we conducted sales and cost 
verifications of the questionnaire responses of G Steel, using standard 
verification procedures. Our sales verification results are outlined in 
the following memorandum: 1) Memorandum to the File, through Angelica 
Mendoza, Program Manager, and Richard O. Weible, Office Director, 
regarding the Verification of the Sales Response of G Steel Public 
Company Limited in the Antidumping Review of Certain Hot-Rolled Carbon 
Steel Flat Products from Thailand, dated October 15, 2007 (G Steel 
Sales Verification Report). The Department's cost verification results 
will be outlined in a forthcoming memorandum. A public version of the G 
Steel Sales Verification Report is on file in the Department's Central 
Records Unit (CRU) located in Room B-099 of the main Department of 
Commerce Building, 14\th\ Street and Constitution Avenue, NW, 
Washington, DC 20230.

Fair Value Comparisons

    To determine whether sales of subject merchandise were made in the 
United States at less than fair value, we compared the export price 
(EP) to the NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice. In accordance with section 777A(d)(2) 
of the Act, we calculated EP and compared these prices to weighted-
average normal values or constructed values (CVs), as appropriate.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by G Steel 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 G Steel's 
U.S. sale 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. We noted at the sales verification that the yield strength data 
reported in the HM and U.S. sales databases did not accurately reflect 
the minimum yield strengths for a certain sample of HM and U.S. sales 
that we examined. See G Steel Sales Verification Report, dated October 
15, 2007, at page 2. G Steel stated that it reported yield strengths 
based on a theoretical basis pursuant to the product's specifications. 
Id. at 35. Based on our findings at verification, and in reviewing the 
record, we find that G Steel's reporting of yield strengths, which it 
claimed was on a theoretical basis, is not consistent with the minimum 
yield strength specified by the grade specifications (where 
applicable). The record shows that G Steel classified yield strength 
the same for all models, but at verification, we found that the actual 
yield strength was not the same for all models. Because G Steel's yield 
strength information could not be verified, the Department determines 
that the application of partial facts available (FA) within the meaning 
of 776(a)(2)(D) of the Act is warranted. Additionally, the Department 
concludes that G Steel did not cooperate to the best of its ability to 
provide yield strength information, and as such, the Department 
determines that the use of partial FA with an adverse inference is 
warranted pursuant to section 776(b) of the Act. See the ``Price-to-
Price Comparisons'' section below for further discussion.

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

[[Page 69190]]

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 G Steel's U.S. sale during the POR was an 
EP sale.
    We calculated EP based on prices charged to the first unaffiliated 
U.S. customer. We used the contract date as the date of sale.\2\ We 
based EP on the packed prices to the first unaffiliated purchaser 
outside Thailand. We made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act, including foreign 
inland freight, foreign brokerage and handling, international freight, 
marine insurance, and U.S. Customs duties.
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    \2\ See the Analysis Memorandum for the Preliminary Results of 
Administrative Review of Certain Hot-Rolled Carbon Steel Flat 
Products from Thailand: G Steel Public Company Limited, dated 
November 30, 2007 (Analysis Memo) for a further discussion of this 
issue.
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Normal Value

A. Home Market Viability

    To determine whether there is a sufficient volume of sales in the 
HM to serve as a viable basis for calculating NV, we compared G Steel's 
volume of HM sales of the foreign like product to the volume of the 
U.S. sale of the subject merchandise, in accordance with section 
773(a)(1)(B) of the Act. Because G Steel's aggregate volume of HM sales 
of the foreign like product was greater than five percent of its 
aggregate volume of the U.S. sales for the subject merchandise, we 
determined the HM was viable. See section A response at A-2 through A-
3, and exhibit A-1.

B. Arm's-Length Test

    G Steel reported that it made sales in the HM to affiliated and 
unaffiliated customers. G Steel reported downstream sales to certain 
affiliated customers.  See G Steel's section A questionnaire response 
at A-3 and exhibit A-1.
    Sales to affiliated customers in the HM for which G Steel did not 
report a downstream sale that were not made at arm's length were 
excluded from our analysis. See 19 CFR 351.403(c). 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, movement charges, imputed credit, direct selling expenses, 
and packing expenses. 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, 69187 
(November 15, 2002).

C. Cost of Production Analysis

    On May 30, 2007, after a request from petitioner and Nucor, the 
Department initiated a sales-below-cost investigation of G Steel 
because both petitioner and Nucor provided a reasonable basis to 
believe or suspect that G Steel is selling hot-rolled steel in Thailand 
at prices below the cost of production (COP). See the Department's Cost 
Initiation Memorandum, dated May 30, 2007. Based on the Department's 
findings in the Cost Initiation Memorandum, there was a reasonable 
basis to believe or suspect that G Steel 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 G Steel's sales in the HM 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 G Steel'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 G Steel except for the 
following adjustments:
    1. We recalculated G Steel's skin pass costs (KVOH) to account for 
the skin passing done at G Steel's own plant during the POR.
    2. We recalculated G Steel's scrap offset (TOTSCRAP) based on the 
net production quantity.
    3. We revised G Steel's G&A expense ratio (GNA) by excluding 
service fees and a reversal of accrued interest.
    For further details regarding these adjustments, see the Memorandum 
from Sheikh Hannan to Neal Halper entitled, ``Cost of Production and 
Constructed Value Adjustments for the Preliminary Results - G Steel 
Public Limited Company,'' dated November 30, 2007, on file in the 
Department's CRU.
    We compared the weighted-average COP figures to the HM 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 HM prices, less 
any applicable billing adjustments, movement charges, direct and 
indirect selling expenses, and packing expenses.
    In determining whether to disregard HM 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 G Steel's HM 
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 G Steel's HM 
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 G Steel revealed that for HM 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 HM 
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.

D. Price-to-Price Comparisons and the Use of Partial Facts Available 
with an Adverse Inference

    As stated above in the ``Product Comparisons'' section, we find 
that pursuant to section 776(b) of the Act, the use of AFA is 
appropriate because we were unable to verify G Steel's reported yield 
strength data in either its HM or U.S. sales databases. Further, we 
find that G Steel did not act to the best of its ability in providing 
these data. Section 776(a)(2) of the Act provides that if an interested 
party: (A) withholds information that has been requested by

[[Page 69191]]

the administering authority; (B) fails to provide such information by 
the deadlines for the submission of the information or in the form and 
manner requested, subject to subsections (c)(1) and (e) of section 782; 
(C) significantly impedes a proceeding under this title; or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority shall, subject 
to section 782(d), use the facts otherwise available in reaching the 
applicable determination.
    Section 782(d) of the Act provides that, if the Department 
determines that a response to a request for information does not comply 
with the request, the Department shall promptly inform the person 
submitting the response of the nature of the deficiency and shall, to 
the extent practicable, provide that person with an opportunity to 
remedy or explain the deficiency in light of the time limits 
established for the completion of the administrative review. Section 
782(e) of the Act states that the Department shall not decline to 
consider information determined to be ``deficient'' under section 
782(d) if all of the following requirements are met: (1) the 
information is submitted by the established deadline; (2) the 
information can be verified; (3) the information is not so incomplete 
that it cannot serve as a reliable basis for reaching the applicable 
determination; (4) the interested party has demonstrated that it acted 
to the best of its ability; and (5) the information can be used without 
undue difficulties.
    Furthermore, section 776(b) of the Act provides that, if the 
Department finds that an interested party has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information, the Department may use an inference adverse to the 
interests of that party in selecting from among the facts otherwise 
available. In addition, the Statement of Administrative Action 
accompanying the Uruguay Round Agreements Act, H.R. Doc. 103-316, Vol. 
1, at 870 (1994) (SAA), establishes that the Department may employ an 
adverse inference ``to ensure that the party does not obtain a more 
favorable result by failing to cooperate to the best of its ability 
than if it had cooperated fully.''
    In sections B and C of the Department's antidumping duty 
questionnaire, dated January 3, 2007, we requested that G Steel report 
the yield strengths (STRENGTH/U) in its U.S. and HM databases based on 
the minimum specified yield strength for the particular specification/
grade. Furthermore, we requested that for sales to a particular 
specification/grade in which there is no minimum specified yield 
strength, G Steel classify the product in an appropriate yield strength 
category based on some reasonable methodology incorporating chemistry 
(i.e., carbon level), heat treatment, etc., and for G Steel to explain 
the methodology it used. In its section B&C responses, dated February 
21, 2007, G Steel stated that it reported yield strength as directed. 
However, as described above, at verification G Steel could not support 
or substantiate how it reported the STRENGTH/U data in either the U.S. 
or HM databases. G Steel classified yield strength the same for all 
models in its questionnaire responses, but at verification we found 
that the actual yield strength was not the same for all models. For a 
detailed discussion with respect to these discrepancies, see the 
Analysis Memo, dated November 30, 2007. Therefore, it was not possible 
to verify all of the product characteristic information that we had 
identified as part of our examination in the verification agenda, dated 
August 28, 2007. Accordingly, pursuant to section 776(a)(2)(D) of the 
Act, partial FA is justified.
    As noted above, section 776(b) of the Act provides that, if the 
Department finds that an interested party has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information, the Department may use an inference adverse to the 
interests of that party in selecting from among the facts otherwise 
available. A showing of bad faith is not required for imposition of an 
adverse inference. Rather, the question is whether the respondent put 
forth its maximum effort to produce the information requested. 
Inattentiveness or carelessness can be a basis for use of an adverse 
inference. See Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 
(Fed. Cir. 2003).
    G Steel had the documents necessary to report complete and correct 
information in the necessary and requested manner and format. We find 
that G Steel did not put forth its maximum efforts in reporting yield 
strength. Rather, it simply classified all yield strengths the same. 
Accordingly, we find that G Steel did not act to the best of its 
ability in reporting necessary and accurate information. Therefore, we 
find it appropriate to use an inference that is adverse to G Steel's 
interest in selecting from among the facts otherwise available. 
Further, section 782(d) of the Act is inapplicable here because this is 
a situation where the respondent's information could not be verified. 
We did not discover the deficient response until verification. 
Moreover, G Steel did not meet all the criteria of section 782(e) of 
the Act.
    As AFA, we matched net U.S. price to the highest individual HM NV 
with the most similar control number (CONNUM) to the U.S. sale. We 
calculated NV based on prices to unaffiliated customers and affiliated 
customers that passed the arm's-length test. We adjusted U.S. gross 
unit price for billing adjustments. We made deductions, where 
appropriate, for foreign inland freight and international 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 the HM packing cost and added the U.S. 
packing cost in accordance with sections 773(a)(6)(A) and (B) of the 
Act.
    For a detailed analysis of the Department's application of AFA, see 
the Analysis Memo, dated November 30, 2007.

E. 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, SG&A 
expenses, interest expense and profit. We made the same adjustments to 
CV as outlined in the ``Cost of Production Analysis'' section above. In 
accordance with section 773(e)(2)(A) of the Act, we based SG&A 
expenses, interest and profit on the amounts G Steel 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 HM 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.

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. 
See also 19 CFR 351.412. The LOT in the comparison market is the LOT of 
the starting-price sales in the comparison

[[Page 69192]]

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. As noted in the 
``Export Price'' section above, we preliminarily find that G Steel's 
U.S. sale to an unaffiliated U.S. customer is appropriately classified 
as an EP sale.
    To determine whether comparison market sales are at a different LOT 
than U.S. 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 EP 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.
    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 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. sale, we reviewed the 
channels of distribution in each market, 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 G Steel regarding the marketing stages involved in sales to the 
reported home and U.S. markets. G Steel reported one LOT with two 
channels of distribution in the HM: (1) sales to affiliated and 
unaffiliated trading companies and (2) sales to unaffiliated end users. 
See G Steel's section A questionnaire response at A-17.
    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 G Steel'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 G 
Steel's section A questionnaire response at exhibit A-6. For example, G 
Steel provides similar levels of marketing and technical services to 
trading companies 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 G Steel's HM sales.
    In the U.S. market, G Steel made sales of subject merchandise 
through one channel of distribution and it claimed only one LOT for its 
sales in the United States. See G Steel's section A questionnaire 
response at A-15 through A-16, and exhibit A-6. The U.S. sale was an EP 
transaction between G Steel and an unaffiliated U.S. trading company. 
Id. Therefore, we preliminary determine that G Steel's U.S. sale 
constitutes a single LOT.
    We then compared the selling functions performed by G Steel on its 
EP sale to the selling functions provided in the HM. We found that G 
Steel provides significant selling activities in the HM related to the 
sales process and marketing support selling functions, as well as 
warranty and technical service selling functions, which it does not 
provide for the U.S. market customer. For instance, G Steel stated that 
it regularly undertakes sales forecasting and market research for the 
HM, but there was no sales forecasting or marketing research done for 
the U.S. market during the POR. See section A response at A-19 and A-
21. G Steel further stated that it provided technical assistance to HM 
customers, but did not provide technical assistance (and there were no 
warranty claims submitted) for U.S. sales during the POR. Id. at A-21 
and A-22.
    Based upon our analysis, we preliminarily determine that the EP and 
the starting price of HM sales differ significantly with respect to 
sales process and marketing support selling functions (e.g. sales 
forecasting and market research), as well as warranty and technical 
service selling functions, and are thus at different LOTs. Therefore, 
when we compared the EP sale to the comparison market sales, we 
examined whether an LOT adjustment may be appropriate. In this case, 
because G Steel 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 G Steel'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.

Currency Conversion

    We made currency conversions pursuant to 19 CFR 351.415 based on 
the exchange rates in effect on the date of the U.S. sale, 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, 2005, through October 
31, 2006, to be as follows:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer / Exporter                     (percent)
------------------------------------------------------------------------
G Steel 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 issuance of the Memorandum to the 
File, through Peter Scholl, Lead Accountant, and Neal Halper, Office 
Director, Verification of the Cost Response of G Steel Public Company 
Limited (G Steel Cost Verification Report). 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 issuance of the G Steel Cost Verification 
Report. 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 issues, 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 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. See 19 CFR 351.310(c). Any hearing, 
if requested, will be held two days after the scheduled date for 
submission of

[[Page 69193]]

rebuttal briefs. See 19 CFR 351.310(d). The Department will issue the 
final results of this administrative review, 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 POR produced by G Steel or by any of the companies for which 
we are rescinding this review, and for which G Steel 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, 66 FR 59562 (November 29, 
2001). These deposit requirements, when imposed, shall remain in effect 
until further notice.

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.

    Dated: November 30, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-23806 Filed 12-6-07; 8:45 am]
BILLING CODE 3510-DS-S