Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Slovakia

[Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
[Notices]
[Pages 1110-1117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-299]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-859-801]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Certain Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products From Slovakia

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

EFFECTIVE DATE: January 7, 2000.

FOR FURTHER INFORMATION CONTACT: Doug Campau or Abdelali Elouaradia, at 
(202) 482-1784 or (202) 482-0498, respectively; Import Administration, 
Room 1870, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department of Commerce's (the 
Department's) regulations refer to the regulations codified at 19 CFR 
part 351 (April 1999).

Preliminary Determination

    We preliminarily determine that certain cold-rolled flat-rolled 
carbon-quality steel products (cold-rolled steel products) from 
Slovakia are being sold, or are likely to be sold, in the United States 
at less than fair value (LTFV), as provided in section 733 of the Act. 
The estimated margins of sales at LTFV are shown in the Suspension of 
Liquidation section of this notice.

Case History

    This investigation was initiated on June 21, 1999.1 See 
Initiation of Antidumping Duty Investigations: Certain Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products from Argentina, Brazil, the 
People's Republic of China, Indonesia, Japan, the Russian Federation, 
Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela, 64 FR 
34194 (June 25, 1999) (Initiation Notice). Since the initiation of the 
investigation, the following events have occurred:
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    \1\ The petitioners in this investigation are Bethlehem Steel 
Corporation, Gulf States Steel, the Independent Steelworkers Union, 
Ispat Inland Steel, LTV Steel Company Inc., National Steel 
Corporation (not a petitioner in the Japan case), Steel Dynamics, 
U.S. Steel Group (a unit of USX Corporation), Weirton Steel 
Corporation, and United Steelworkers of America.
---------------------------------------------------------------------------

    On June 22 and July 29, 1999, the Department issued section A non-
market economy (NME) and market economy 2 antidumping 
questionnaires, respectively, to VSZ, a.s. (VSZ), the only known 
exporter of subject merchandise in Slovakia. As of the date of 
initiation of this investigation, Slovakia was still considered an NME 
country. On June 25, 1999, the Department received a letter from VSZ, 
requesting, on behalf of the Government of Slovakia, that the 
Department revoke the NME status of Slovakia under section 771(18)(A) 
of the Act. On July 2, 1999, the Department initiated a formal inquiry 
into Slovakia's NME status. While the Department conducted this 
inquiry, VSZ voluntarily submitted responses to both the Department's 
market economy questionnaire and the Department's NME questionnaire.
---------------------------------------------------------------------------

    \2\ Both versions of the questionnaire were issued because VSZ 
had requested that the NME status of Slovakia be revoked.
---------------------------------------------------------------------------

    On July 16, 1999, the United States International Trade Commission 
(ITC) preliminarily determined that there was a reasonable indication 
that imports of the products under investigation were materially 
injuring the United States industry. See Certain Cold-Rolled Steel 
Products From Argentina, Brazil, China, Indonesia, Japan, Russia, 
Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela: 
Determinations, 64 FR 41458 (July 30, 1999).
    On October 13, 1999, the Department revoked Slovakia's NME status. 
See Memorandum to Robert S. LaRussa (October 13, 1999). Thereafter, 
this investigation continued under the Department's market economy 
procedures. See Revocation of Slovakia's Non Market Economy Status, 
below.
    On October 19, 1999, the Department postponed the preliminary 
determination in this case for 30 days in accordance with section 
733(c) of the Act and 19 CFR 351.205(b)(2). See Notice of Postponement 
of Preliminary Antidumping Duty Determinations: Certain Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products from Slovakia, 64 FR 57842 
(October 27, 1999). On December 6, 1999, the Department further 
extended the deadline for the preliminary determination to December 28, 
1999. See Notice of Postponement of Preliminary Antidumping Duty 
Determinations: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel

[[Page 1111]]

Products from Slovakia, 64 FR 69491 (December 13, 1999).
    On November 9, 1999, the petitioners requested that the Department 
initiate a below-cost sales investigation. After examining the 
petitioner's request, on November 10, 1999, the Department initiated a 
below-cost sales investigation. See Memorandum from Gary Taverman to 
Holly Kuga (November 10, 1999).
    We issued supplemental questionnaires where appropriate. Responses 
to those questionnaires were timely filed, and we have incorporated the 
information provided in those responses into this preliminary 
determination.

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2), 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to not more than six months.
    On October 28, 1999, VSZ requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination until not later than 135 
days after the date of the publication of an affirmative preliminary 
determination in the Federal Register. VSZ also included a request to 
extend the provisional measures to not more than six months. 
Accordingly, since we have made an affirmative preliminary 
determination, we have postponed the final determination until not 
later than 135 days after the date of the publication of the 
preliminary determination.

Period of Investigation

    The period of the investigation (POI) is April 1, 1998, through 
March 31, 1999.
    This period corresponds to the respondent's four most recent fiscal 
quarters prior to the month of the filing of the petition (i.e., June 
1999).

Scope of Investigation

    For purposes of this investigation, the products covered are 
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel 
products, neither clad, plated, nor coated with metal, but whether or 
not annealed, painted, varnished, or coated with plastics or other non-
metallic substances, both in coils, 0.5 inch wide or wider, (whether or 
not in successively superimposed layers and/or otherwise coiled, such 
as spirally oscillated coils), and also in straight lengths, which, if 
less than 4.75 mm in thickness having a width that is 0.5 inch or 
greater and that measures at least 10 times the thickness; or, if of a 
thickness of 4.75 mm or more, having a width exceeding 150 mm and 
measuring at least twice the thickness. The products described above 
may be rectangular, square, circular or other shape and include 
products of either rectangular or non-rectangular cross-section where 
such cross-section is achieved subsequent to the rolling process (i.e., 
products which have been ``worked after rolling'')--for example, 
products which have been beveled or rounded at the edges.
    Specifically included in this scope are vacuum degassed, fully 
stabilized (commonly referred to as interstitial-free (IF)) steels, 
high strength low alloy (HSLA) steels, and motor lamination steels. IF 
steels are recognized as low carbon steels with micro-alloying levels 
of elements such as titanium and/or niobium added to stabilize carbon 
and nitrogen elements. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium, 
titanium, vanadium, and molybdenum. Motor lamination steels contain 
micro-alloying levels of elements such as silicon and aluminum.
    Steel products included in the scope of this investigation, 
regardless of definitions in the Harmonized Tariff Schedules of the 
United States (HTSUS), are products in which: (1) Iron predominates, by 
weight, over each of the other contained elements; (2) the carbon 
content is 2 percent or less, by weight, and; (3) 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 (also called columbium), or
0.15 percent of vanadium, or
0.15 percent of zirconium.

    All products that meet the written physical description, and in 
which the chemistry quantities do not exceed any one of the noted 
element levels listed above, are within the scope of this investigation 
unless specifically excluded. The following products, by way of 
example, are outside and/or specifically excluded from the scope of 
this investigation:

•  SAE grades (formerly also called AISI grades) above 2300;
•  Ball bearing steels, as defined in the HTSUS;
•  Tool steels, as defined in the HTSUS;
•  Silico-manganese steel, as defined in the HTSUS;
•  Silicon-electrical steels, as defined in the HTSUS, that are 
grain-oriented;
•  Silicon-electrical steels, as defined in the HTSUS, that are 
not grain-oriented and that have a silicon level exceeding 2.25 
percent;
•  All products (proprietary or otherwise) based on an alloy ASTM 
specification (sample specifications: ASTM A506, A507);
•  Silicon-electrical steels, as defined in the HTSUS, that are 
not grain-oriented and that have a silicon level less than 2.25 
percent, and
    (a) fully-processed, with a core loss of less than 0.14 watts/pound 
per mil (.001 inches), or
    (b) semi-processed, with core loss of less than 0.085 watts/pound 
per mil (.001 inches);
•  Certain shadow mask steel, which is aluminum killed cold-
rolled steel coil that is open coil annealed, has an ultra-flat, 
isotropic surface, and which meets the following characteristics:
    Thickness: 0.001 to 0.010 inches
    Width: 15 to 32 inches

                          Chemical Composition
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Element................................................                C
Weight %...............................................         <0.002%
------------------------------------------------------------------------


[[Page 1112]]

•  Certain flapper valve steel, which is hardened and tempered, 
surface polished, and which meets the following characteristics:
    Thickness: 1.0 mm
    Width: 152.4 mm

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element...........................  C                       Si                      Mn                      P                      S
Weight %..........................  0.90-1.05               0.15-0.35               0.30-0.50               0.03        0.006
--------------------------------------------------------------------------------------------------------------------------------------------------------


                          Mechanical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Tensile Strength.......................  162 Kgf/mm2
Hardness...............................  475 Vickers hardness
                                          number
------------------------------------------------------------------------


                           Physical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Flatness...............................  <0.2% of nominal strip width
------------------------------------------------------------------------

    Microstructure: Completely free from decarburization. Carbides are 
spheroidal and fine within 1% to 4% (area percentage) and are 
undissolved in the uniform tempered martensite.

                         Non-metallic Inclusion
------------------------------------------------------------------------
                                                               Area
                                                            percentage
------------------------------------------------------------------------
Sulfide Inclusion.......................................  0.0
                                                                      4%
Oxide Inclusion.........................................  0.0
                                                                      5%
------------------------------------------------------------------------

    Compressive Stress: 10 to 40 Kgf/mmT22.

                            Surface Roughness
------------------------------------------------------------------------
                                                             Roughness
                     Thickness (mm)                        (m)
------------------------------------------------------------------------
t0.209.......................................  Rz0
                                                                      .5
0.2090.310.................................  Rz0
                                                                      .6
0.3100.440.................................  Rz0
                                                                      .7
0.4400.560.................................  Rz0
                                                                      .8
0.5601
                                                                      .0
------------------------------------------------------------------------

•  Certain ultra thin gauge steel strip, which meets the 
following characteristics:
    Thickness: 0.100 mm 7%
    Width: 100 to 600 mm

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element........................  C                    Mn                  P                   S                   Al                  Fe
Weight %.......................  0.07      0.2-0.5             0.05     0.05     0.07     Balance
--------------------------------------------------------------------------------------------------------------------------------------------------------


                          Mechanical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Hardness...............................  Full Hard (Hv 180 minimum)
Total Elongation.......................  <3%
Tensile Strength.......................  600 to 850 N/mm2
------------------------------------------------------------------------


                           Physical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Surface Finish.........................  0.3 micron
Camber (in 2.0 m)......................  <3.0 mm
Flatness (in 2.0 m)....................  0.5 mm
Edge Burr..............................  <0.01 mm greater than thickness
Coil Set (in 1.0 m)....................  <75.0 mm
------------------------------------------------------------------------

•  Certain silicon steel, which meets the following 
characteristics:
    Thickness: 0.024 inches .0015 inches
    Width: 33 to 45.5 inches

[[Page 1113]]



                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element........................  C                    Mn                  P                   S                   Si                  Al
Min. Weight %..................  ...................  ..................  ..................  ..................  0.65                ..................
Max. Weight %..................  0.004                0.4                 0.09                0.009               ..................  0.4
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                          Mechanical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Hardness...............................  B 60-75 (AIM 65)
------------------------------------------------------------------------


                           Physical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Finish.................................  Smooth (30-60 microinches)
Gamma Crown (in 5 inches)..............  0.0005 inches, start measuring
                                          \1/4\ inch from slit edge
Flatness...............................  20 I-UNIT max.
Coating................................  C3A-.08A max. (A2 coating
                                          acceptable)
Camber (in any 10 feet)................  \1/16\ inch
Coil Size I.D..........................  20 inches
------------------------------------------------------------------------


                           Magnetic Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Core Loss (1.5T/60 Hz) NAAS............  3.8 Watts/Pound max.
Permeability (1.5T/60 Hz) NAAS.........  1700 gauss/oersted typical 1500
                                          minimum
------------------------------------------------------------------------

•  Certain aperture mask steel, which has an ultra-flat surface 
flatness and which meets the following characteristics:
    Thickness: 0.025 to 0.245 mm
    Width: 381-1000 mm

                                              Chemical Composition
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Element.............................  C                         N                        Al
Weight %............................  <0.01                     0.004 to 0.007           <0.007
----------------------------------------------------------------------------------------------------------------

•  Certain tin mill black plate, annealed and temper-rolled, 
continuously cast, which meets the following characteristics:

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element......................  C            Mn           P           S         Si          Al        As          Cu          B           N
Min. Weight %................  0.02         0.20         ..........  ........  ..........  0.03      ..........  ..........  ..........  0.003
Max. Weight %................  0.06         0.40         0.02        0.023     0.03        0.08      0.02        0.08        ..........  0.008 (Aiming
                                                                      (Aiming               (Aiming                                       0.005)
                                                                      0.018                 0.05)
                                                                      Max.)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Non-metallic Inclusions: Examination with the S.E.M. shall not 
reveal individual oxides >1 micron (0.000039 inches) and inclusion 
groups or clusters shall not exceed 5 microns (0.000197 inches) in 
length.
    Surface Treatment as follows:
    The surface finish shall be free of defects (digs, scratches, pits, 
gouges, slivers, etc.) and suitable for nickel plating.

                                                 Surface Finish
----------------------------------------------------------------------------------------------------------------
                                                        Roughness, RA Microinches (Micrometers)
                                     ---------------------------------------------------------------------------
                                                 Aim                      Min.                     Max.
----------------------------------------------------------------------------------------------------------------
Extra Bright........................  5 (0.1)                   0 (0)                    7 (0.2)
----------------------------------------------------------------------------------------------------------------

•  Certain full hard tin mill black plate, continuously cast, 
which meets the following characteristics:

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element......................  C            Mn           P           S         Si          Al        As          Cu          B           N
Min. Weight %................  0.02         0.20         ..........  ........  ..........  0.03      ..........  ..........  ..........  0.003
Max. Weight %................  0.06         0.40         0.02        0.023     0.03        0.08      0.02        0.08        ..........  0.008
                                                                     (Aiming               (Aiming                                       (Aiming
                                                                     0.018                 0.05)                                         0.005)
                                                                     Max.)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Non-metallic Inclusions: Examination with the S.E.M. shall not 
reveal individual oxides >1 micron (0.000039 inches) and inclusion 
groups or clusters shall not exceed 5 microns (0.000197 inches) in 
length.

[[Page 1114]]

    Surface Treatment as follows:
    The surface finish shall be free of defects (digs, scratches, pits, 
gouges, slivers, etc.) and suitable for nickel plating.

                                                 Surface Finish
----------------------------------------------------------------------------------------------------------------
                                                        Roughness, RA Microinches (Micrometers)
                                     ---------------------------------------------------------------------------
                                                 Aim                      Min.                     Max
----------------------------------------------------------------------------------------------------------------
Stone Finish........................  16 (0.4)                  8 (0.2)                  24 (0.6)
----------------------------------------------------------------------------------------------------------------

•  Certain ``blued steel'' coil (also know as ``steamed blue 
steel'' or ``blue oxide'') with a thickness and size of 0.38 mm x 940 
mm x coil, and with a bright finish;
•  Certain cold-rolled steel sheet, which meets the following 
characteristics:
    Thickness (nominal): 0.019 inches
    Width: 35 to 60 inches

                                              Chemical Composition
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Element.............................  C                         0                        B
Max. Weight %.......................  0.004                     .......................  .......................
Min. Weight %.......................  ........................  0.010                    0.012
----------------------------------------------------------------------------------------------------------------

•  Certain band saw steel, which meets the following 
characteristics:
    Thickness: 1.31 mm
    Width: 80 mm

                                                                                      Chemical Composition
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Element........................  C                      Si                     Mn                     P                      S                      Cr                     Ni
Weight %.......................  1.2 to 1.3             0.15 to 0.35           0.20 to 0.35           0.03        0.007       0.3 to 0.5             0.25
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other properties:
    Carbide: fully spheroidized having > 80% of carbides, which are 
 0.003 mm and uniformly dispersed
    Surface finish: bright finish free from pits, scratches, rust, 
cracks, or seams
    Smooth edges
    Edge camber (in each 300 mm of length):  7 mm arc height
    Cross bow (per inch of width): 0.015 mm max.

    The merchandise subject to this investigation is typically 
classified in the HTSUS at subheadings: 7209.15.0000, 7209.16.0030, 
7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090, 
7209.18.1530, 7209.18.1560, 7209.18.2550, 7209.18.6000, 7209.25.0000, 
7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000, 
7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500, 
7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030, 7211.29.2090, 
7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 7212.40.1000, 
7212.40.5000, 7212.50.0000, 7225.19.0000, 7225.50.6000, 7225.50.7000, 
7225.50.8010, 7225.50.8085, 7225.99.0090, 7226.19.1000, 7226.19.9000, 
7226.92.5000, 7226.92.7050, 7226.92.8050, and 7226.99.0000.
    Although the HTSUS subheadings are provided for convenience and 
United States Customs Service (U.S. Customs) purposes, the written 
description of the merchandise under investigation is dispositive.
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage. From July through October 
1999, the Department received responses from a number of parties 
including importers, respondents, consumers, and petitioners, aimed at 
clarifying the scope of the investigation. See Memorandum to Joseph A. 
Spetrini (Scope Memorandum), dated November 1, 1999, for a list of all 
persons submitting comments and a discussion of all scope comments. 
There are several scope exclusion requests for products which are 
currently covered by the scope of this investigation that are still 
under consideration by the Department. These items are considered to be 
within the scope for this preliminary determination; however, these 
requests will be reconsidered for the final determination. See Scope 
Memorandum.

Product Comparisons

    In accordance with section 771(16) of the Act, all products 
produced by the respondent covered by the description in the Scope of 
Investigation section, above, and sold in Slovakia during the POI, are 
considered to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We have relied on 14 
criteria to match U.S. sales of subject merchandise to comparison-
market sales of the foreign like product: hardening and tempering, 
paint, carbon level, quality, yield strength, minimum thickness, 
thickness tolerance, width, edge finish, form, temper rolling, 
leveling, annealing, and surface finish. These characteristics have 
been weighted by the Department, where appropriate. 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 as listed above.

Revocation of Slovakia's Non-Market Economy Status

    In determining whether to revoke NME-country status under section 
771(18)(A) of the Act, the Department must take into account the 
following factors under section 771(18)(B): (1) The extent to which the 
currency of the foreign country is convertible into the currency of 
other countries; (2) the extent to which wage rates in the foreign 
country are determined by free

[[Page 1115]]

bargaining between labor and management; (3) the extent to which joint 
ventures or other investments by firms of other foreign countries are 
permitted in the foreign country; (4) the extent of government 
ownership or control of the means of production; (5) the extent of 
government control over the allocation of resources and over the price 
and output decisions of enterprises; and (6) such other factors as the 
administrating authority considers appropriate.
    Since its emergence as an independent, democratic state, Slovakia 
has made significant progress in its transformation into a market 
economy country. The Slovak currency is now fully convertible. Wages in 
Slovakia are largely determined by free bargaining between labor and 
management. Trade has been liberalized and tariffs reduced, and the 
Slovak government is actively promoting foreign investment and business 
ventures. Industry, agriculture and services have all been privatized, 
and the power to make decisions related to the allocation of resources, 
and over pricing and output decisions, now rests with the private 
sector. Based on the preponderance of evidence related to economic 
reforms in Slovakia, analyzed as required under section 771(18)(B) of 
the Act, the Department revoked Slovakia's NME country status, 
effective January 1, 1998. See Memorandum to Robert S. LaRussa (October 
13, 1999).

Fair Value Comparisons

    To determine whether sales of cold-rolled steel products from 
Slovakia were made in the United States at LTFV, we compared the export 
price (EP) to the normal value (NV), as described in the Export Price 
and Normal Value sections of this notice, below. In accordance with 
section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs 
for comparison to weighted-average NVs.

Export Price

    In accordance with section 772 of the Act, we calculated an EP for 
each sale. Section 772(a) of the Act defines EP as the price at which 
the subject merchandise is first sold or offered for sale, before the 
date of importation by the exporter or producer outside of the United 
States, to an unaffiliated purchaser in the United States or to an 
unaffiliated purchaser for exportation to the United States. Consistent 
with this definition, we have found that VSZ made only EP sales during 
the POI.
    We calculated EP based on cost and freight (C&R) packed prices 
charged to the first unaffiliated customer in the United States. In 
accordance with section 772(c)(2) of the Act, we made deductions from 
the starting price, where appropriate, for movement expenses, including 
foreign inland freight and inland insurance for shipment from the mill 
to the port of export, foreign warehousing expenses, and ocean freight. 
We added interest revenue to the starting price for sales that had been 
paid late and for which the respondent collected actual interest 
revenue. See Preliminary Calculation Memorandum (December 28, 1999).
    We note that, according to VSZ's reported data, certain of VSZ's 
U.S. sales were unpaid as of the date of this preliminary 
determination. Petitioners asserted that all of VSZ's unpaid sales 
should be treated as bad debt and, therefore, that the Department 
should treat such unpaid sales amounts as a direct selling expense. VSZ 
claims that it is still negotiating the payment of all reported sales, 
and because, as specified in its financial statement, the sales have 
not been written off, it would be inappropriate to treat the amount of 
the sales as direct selling expenses.
    We have preliminarily accepted VSZ's claim that it has not written 
off the amounts due on any of the U.S. sales. We have, however, 
recalculated the imputed credit expenses for U.S. sales for which 
payment had not yet been received by setting the date of payment equal 
to the date of signature of this preliminary determination. We intend 
to examine this issue closely at verification.

Normal Value

A. Selection of Comparison Market

    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or value, if 
quantity is inappropriate), and that there is no particular market 
situation that prevents a proper comparison with the EP. The statute 
contemplates that quantities (or value) will normally be considered 
insufficient if they are less than five percent of the aggregate 
quantity (or value) of sales of the subject merchandise to the United 
States.
    VSZ had a viable home market for cold-rolled steel products, and 
reported home market sales data for purposes of the calculation of NV.
    In deriving NV, we made certain adjustments as detailed in the 
Calculation of Normal Value Based on Home-Market Prices and Calculation 
of Normal Value Based on Constructed Value sections of this notice, 
below.

B. Cost of Production Analysis

    As noted above, on November 8, 1999, petitioners filed a below-cost 
sales allegation against VSZ. After analyzing the allegation, in 
accordance with section 773(b)(2)(A)(i) of the Act, we found reasonable 
grounds to believe or suspect that VSZ's sales of cold-rolled steel 
products in Slovakia were made at prices below the COP. See Memorandum 
from Gary Taverman to Holly Kuga (November 10, 1999). As a result, the 
Department conducted an investigation to determine whether VSZ made 
home market sales during the POI at prices below their respective COPs, 
within the meaning of section 773(b) of the Act.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of VSZ's costs of materials and 
fabrication for the foreign like product, plus amounts for general and 
administrative expenses (G&A), selling expenses, commissions, packing 
expenses and interest expenses. We relied on the COP data submitted by 
VSZ in its cost questionnaire response.
2. Test of Home-Market Sales Prices
    We compared the weighted-average COP for VSZ to home market sales 
of the foreign like product, as required under section 773(b) of the 
Act, in order to determine whether these sales had been made at prices 
below the COP within an extended period of time (i.e., a period of one 
year) in substantial quantities 3 and whether such prices 
were sufficient to permit the recovery of all costs within a reasonable 
period of time. On a model-specific basis, we compared the revised COP 
to the home market prices, less any applicable movement charges, 
discounts and rebates.
---------------------------------------------------------------------------

    \3\ In accordance with section 773(b)(2)(C)(i) of the Act, we 
determined that sales made below the COP were made in substantial 
quantities if the volume of such sales represented 20 percent or 
more of the volume of sales under consideration for the 
determination of NV.
---------------------------------------------------------------------------

3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product during the POI were at prices less than the 
COP, we determined such sales to have been made in ``substantial 
quantities'' within

[[Page 1116]]

an extended period of time in accordance with section 773(b)(2)(B) of 
the Act. In such cases, because we compared prices to POI average 
costs, we also determined that such sales were not made at prices that 
would permit recovery of all costs within a reasonable period of time, 
in accordance with section 773(b)(2)(D) of the Act. We therefore 
disregarded these below-cost sales and used the remaining sales as the 
basis for determining NV, in accordance with section 773(b)(1) of the 
Act. For those U.S. sales of cold-rolled steel products for which there 
were no comparable home-market sales in the ordinary course of trade, 
we compared EPs to CV in accordance with section 773(a)(4) of the Act. 
See Calculation of Normal Value Based on Constructed Value, below.

C. Calculation of Normal Value Based on Home-Market Prices

    We performed price-to-price comparisons where there were sales of 
comparable merchandise in the home market that did not fail the cost 
test.
    We calculated NV based on ex-factory prices and made deductions 
from the starting price, where appropriate, for inland freight. In 
addition, we made circumstance-of-sale (COS) adjustments for direct 
expenses, where appropriate, in accordance with section 
773(a)(6)(C)(iii) of the Act. These included imputed credit expenses, 
warranty expenses, and other direct selling expenses. We recalculated 
the imputed credit expenses for U.S. sales for which payment had not 
yet been received by setting the date of payment equal to the date of 
signature of this preliminary determination. See Preliminary 
Calculation Memorandum (December 28, 1999). We also made adjustments to 
the starting price for discounts and rebates.
    In accordance with sections 773(a)(6)(A) and (B) of the Act, we 
deducted home market packing costs and added U.S. packing costs.

D. Calculation of Normal Value Based on Constructed Value

    Section 773(a)(4) of the Act provides that, where NV cannot be 
based on comparison-market sales, NV may be based on CV. Accordingly, 
for those models of cold-rolled steel products for which we could not 
determine the NV based on comparison-market sales, either because there 
were no sales of a comparable product or all sales of the comparison 
products failed the COP test, we based NV on CV.
    Section 773(e) of the Act provides that CV shall be based on the 
sum of the respondent's cost of materials, fabrication, selling, 
general and administrative (SG&A) expenses and profit. In accordance 
with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit 
on the amounts incurred and realized in connection with the production 
and sale of the foreign like product in the ordinary course of trade, 
for consumption in the foreign country. In addition, we relied on U.S. 
packing costs as described in the Export Price section of this notice, 
above.
    We made adjustments to CV for differences in COS in accordance with 
section 773(a)(8) of the Act and 19 CFR 351.410. These involved the 
deduction of direct selling expenses incurred on home market sales 
from, and the addition of U.S. direct selling expenses to, CV.

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. The normal-value 
LOT is that of the starting-price sales in the comparison market or, 
when NV is based on CV, that of the sales from which we derive SG&A 
expenses and profit. The U.S. LOT for EP sales is also the level of the 
starting-price sale, which is usually from exporter to importer.
    To determine whether NV sales are at a different LOT than EP, 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 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, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731 
(November 19, 1997).
    In implementing these principles in this investigation, we obtained 
information from VSZ about the marketing stages involved in the 
reported United States and home market sales, including a description 
of the selling activities performed by VSZ for each channel of 
distribution. In identifying LOTs for EP and home market sales, we 
considered the selling functions reflected in the starting price before 
any adjustments.
    VSZ claimed to have two LOTs in the NV market and one LOT in the 
U.S. market. We examined VSZ's distribution system, including selling 
functions, classes of customers, and selling expenses. We found that 
the selling functions--which included warranty, freight, processing of 
sales documents, and technical advice--were sufficiently similar in the 
United States and home markets to establish a single, same level of 
trade in both markets. It was thus unnecessary, for this preliminary 
determination, to make any level-of-trade adjustment for comparison of 
EP and normal value.

Currency Conversions

    We made currency conversions into United States dollars in 
accordance with section 773A(a) of the Act based on exchange rates in 
effect on the dates of the United States sales, as certified by the Dow 
Jones Business Information Services.

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
all information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing 
Customs to suspend liquidation of all entries of cold-rolled steel 
products from Slovakia, that are entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. We are also instructing Customs to require a cash 
deposit or the posting of a bond equal to the weighted-average amount 
by which the NV exceeds the EP, as indicated in the chart below. These 
instructions suspending liquidation will remain in effect until further 
notice.
    The weighted-average dumping margins are provided below.

------------------------------------------------------------------------
                                                              Margin
                  Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
VSZ.....................................................           32.83
All others..............................................           32.83
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final antidumping determination is 
affirmative, the ITC will determine whether these imports are 
materially injuring, or threaten material injury to, the United States 
industry. The deadline for that ITC determination would be the later of 
120 days after the date of these preliminary

[[Page 1117]]

determination or 45 days after the date of our final determination.

Public Comment

    Case briefs for this investigation must be submitted no later than 
one week after the issuance of the verification reports. Rebuttal 
briefs must be filed within five days after the deadline for submission 
of case briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes.
    Section 774 of the Act provides that the Department will hold a 
hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
held two days after the deadline for submission of the rebuttal briefs, 
at the US Department of Commerce, 14th Street and Constitution Avenue, 
NW, Washington, D.C. 20230. In the event that the Department receives 
requests for hearings from parties to several cold-rolled cases, the 
Department may schedule a single hearing to encompass all those cases. 
Parties should confirm by telephone the time, date, and place of the 
hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request within 30 days of 
the publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs.
    If this investigation proceeds normally, we will make our final 
determination no later than 135 days after the date of publication of 
this notice in the Federal Register.
    This determination is issued and published pursuant to sections 
733(d) and 777(i)(1) of the Act.

    Dated: December 28, 1999.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-299 Filed 1-6-00; 8:45 am]
BILLING CODE 3510-DS-P