Certain Corrosion-Resistant Carbon Steel Flat Products from Canada: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

In response to timely requests, the U.S. Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain corrosion-resistant carbon steel flat products (CORE) from Canada for the period August 1, 2002, through July 31, 2003. The Department preliminarily determines that sales were made to the United States at less than normal value (NV) by Stelco Inc. (“Stelco”). If these preliminary results are adopted in our final results of this administrative review, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on entries of Stelco merchandise during the period of review. The Department preliminarily determines that sales were not made to the United States at less than NV by Dofasco Inc. and Sorevco and Company, Ltd. (collectively “Dofasco”). If these preliminary results are adopted in our final results of this administrative review, we will instruct CBP to liquidate without regard to antidumping duties entries of Dofasco merchandise during the period of review. The preliminary results are listed in the section titled “Preliminary Results of Review,” infra.

EFFECTIVE DATE:

September 13, 2004.

FOR FURTHER INFORMATION CONTACT:

Javier Barrientos (Dofasco) or Jaqueline Arrowsmith (Stelco), Office VI, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th & Constitution Avenue, NW., Washington, DC 20230; telephone: 202-482-2243 and 202-482-5255, respectively.

SUPPLEMENTARY INFORMATION:

Background

The Department published the antidumping duty order on CORE from Canada on August 19, 1993 (58 FR 44162). On August 1, 2003, the Department published in the Federal Register a notice of “Opportunity to Request Administrative Review” of the antidumping duty order on CORE from Canada for the period August 1, 2002, through July 30, 2003. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 68 FR 45218 (August 1, 2003). Based on timely requests, in accordance with section 751(a) of the Act, on September 30, 2003, the Department initiated an administrative review of the antidumping duty order on corrosion-resistant carbon steel flat products from Canada, covering the period August 1, 2002, through July 31, 2003. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, Request for Revocation in Part and Deferral of Administrative Reviews, 68 FR 56262 (September 30, 2003). This administrative review was initiated on the following exporters: Continuous Colour Coat, Ltd. (“CCC”), Dofasco Inc. (“Dofasco”), Ideal Roofing Company, Ltd. (“Ideal Roofing”), Impact Steel Canada, Ltd. (“Impact Steel”), Russel Metals Export (“Russel Metals”), Sorevco and Company, Ltd. (“Sorevco”), and Stelco Inc. (“Stelco”). On December 19, 2003, the Department published a rescission, in part, of its administrative review with respect to CCC, Impact Steel, and Ideal Roofing. See Corrosion-Resistant Carbon Steel Flat Products From Canada: Rescission, in Part, of Antidumping Duty Administrative Review, 68 FR 70764 (December 19, 2003). On March 30, 2004, the Department published a rescission, in part, of its administrative review with respect to Russell Metals. See Notice of Rescission, in Part, of Antidumping Duty Administrative Review: Corrosion-Resistant Carbon Steel Flat Products From Canada, 69 FR 16521 (March 30, 2004).

On April 29, 2004, the Department extended the deadline for the preliminary results of this antidumping duty administrative review from May 2, 2004, until no later than August 30, 2004. See Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review: Corrosion-Resistant Carbon Steel Flat Products From Canada, 69 FR 23495 (April 29, 2004).

Period of Review

The period of review (POR) is August 1, 2002, through July 31, 2003.

Scope of the Antidumping Duty Order

The product covered by this antidumping duty order is certain corrosion-resistant steel, and includes flat-rolled carbon steel products, of rectangular shape, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at least 10 times the thickness or if of a thickness of 4.75 millimeters or more are of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (HTS) under item numbers 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, and 7217.90.5090. Included in this review are corrosion-resistant flat-rolled products of 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. Excluded from this review are flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead (“terne plate”), or both chromium and chromium oxides (“tin-free steel”), whether or not painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating. Also excluded from this review are clad products in straight lengths of 0.1875 inch or more in composite thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness. Also excluded from this review are certain clad stainless flat-rolled products, which are three-layered corrosion-resistant carbon steel flat-rolled products less than 4.75 millimeters in composite thickness that consist of a carbon steel flat-rolled product clad on both sides with stainless steel in a 20%-60%-20% ratio.

Verification

International Steel Group (“ISG”), a domestic producer and interested party in this administrative review, requested verification of Stelco's questionnaire responses in its January 8, 2004 letter to the Department. Pursuant to 351.307(b)(1)(v) of the Department's regulations, the Secretary will verify factual information in a review if:

(A) A domestic interested party, not later than 100 days after the date of publication of the notice of initiation of review, submits a written request for verification; and (B) The Secretary conducted no verification under this paragraph during either of the two immediately preceding administrative reviews.

The Department did not verify Stelco during either of the two immediately preceding reviews, and the request from ISG was within the 100-day time limit. Therefore, in accordance with 351.307(b)(1)(v) of the Department's regulations, the Department conducted verification of certain sales and cost information provided by Stelco using standard verification procedures, on-site inspection of the manufacturer's facilities, and the examination of relevant sales and financial records. Our verification results are outlined in the public and proprietary versions of the Memorandum to File: Report on the Sales Verification of Stelco Inc. in the Tenth Antidumping Duty Administrative Review for Certain Corrosion-Resistant Carbon Steel Flat Products from Canada, dated August 18, 2004 (“Sales Verification Report”), and the Memorandum to File: Report on the Cost Verification of Stelco Inc. in the Tenth Antidumping Duty Administrative Review for Certain Corrosion-Resistant Carbon Steel Flat Products from Canada, forthcoming, which are on file in the Central Records Unit, room B-099 of the main Commerce Building.

Pursuant to section 351.307(b)(1)(iv) of the Department's regulations, which allows for verification if the Department determines that “good cause” exists, petitioner submitted requests for verification of Dofasco's sales and cost responses on: May 6, 2004; June 24, 2004; and, July 30, 2004. Petitioner argues that Dofasco's original and supplemental questionnaire responses contained many errors and that Dofasco's alleged errors and contradictions in its model-match submissions give good cause for the Department to conduct verification. See Model-match Criteria section below. To date, the Department has not verified Dofasco's sales or cost information.

ANALYSIS

Affiliation and Collapsing

For purposes of this review, we have collapsed Dofasco, Sorevco, and Do Sol Galva Ltd. (DSG) and treated them as a single respondent, as we have done in prior segments of the proceeding. See Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate From Canada, 58 FR 37099, 37107 (July 9, 1993), for our analysis regarding collapsing Sorevco. There have been no changes to the pertinent facts of this decision, such as, for example, ownership structure, that warrant reconsideration of our decision to collapse Sorevco. For our analysis regarding collapsing DSG, see Memorandum from Javier Barrientos (AD/CVD Financial Analyst) through Mark E. Hoadley (Acting Program Manager) to the File; Certain Corrosion-Resistant Carbon Steel Flat Products from Canada: (Collapsing of Dofasco Inc. (Dofasco) and Do Sol Galva (DSG)), August 30, 2004, which is on file in the Central Records Unit, room B-099 of the main Commerce Building. As we are collapsing Dofasco, Sorevco, and DSG for purposes of the preliminary results, we will instruct CBP to apply Dofasco's rate to merchandise produced, exported, or processed by Sorevco or DSG.

Consistent with our determination in past segments of this proceeding, we have not collapsed Dofasco and its toll producer DJ Galvanizing Ltd. Partnership (“DJG”) (formerly DNN Galvanizing Ltd. Partnership (“DNN”)) in these preliminary results. Therefore, for CORE that is processed by DJG before it is exported to the United States, we will, for assessment and cash deposit purposes, instruct CBP to: 1) apply Dofasco's rate on merchandise supplied by Dofasco or DSG; 2) apply the company specific rate on merchandise supplied by other previously reviewed companies; and, 3) apply the “all others” rate for merchandise supplied by companies which have not been reviewed in the past. The Department recognizes, however, that given the nature of their affiliation, an issue could arise with respect to whether there is a potential for manipulation of price or production and, if so, whether Dofasco and DJG should receive the same antidumping duty rate. Therefore, the Department is soliciting comments on this issue for the final results of review.

Model-Match Criteria

Dofasco and petitioner submitted comments with regard to model-match criteria on the following dates: January 26, 2004 (Dofasco); May 5, 2004 (Dofasco); June 2, 2004 (petitioner); June 7, 2004 (Dofasco); June 17, 2004 (petitioner); June 21, 2004 (Dofasco); June 24, 2004 (Petitioner); July 26, 2004 (Dofasco); August 10, 2004 (petitioner); and, August 13, 2004 (Dofasco). Dofasco argues that it is proper to compare sales of CORE by incorporating a model-match criterion for surface characteristic that captures the different applications and uses of the products based on that criterion. Dofasco claims that the higher cost of CORE for exposed, as opposed to unexposed, applications also justifies the inclusion of a new model-match criteria. Petitioner argues that this same issue has been brought up in past administrative reviews of this proceeding and the Department did not modify the criteria. In addition, petitioner states that this is not a new technology and that material cost differences are not there as Dofasco claims.

For purposes of the preliminary results, we did not change the model-match criteria we use for this antidumping duty order. For further discussion, see Memorandum from Javier Barrientos (AD/CVD Financial Analyst) through Mark E. Hoadley (Acting Program Manager) to Barbara E. Tillman (Director); Preliminary Results: Certain Corrosion-Resistant Carbon Steel Flat Products from Canada (Model-Match Methodology) August 30, 2004.

Product Comparisons

In accordance with section 771(16) of the Tariff Act of 1930, as amended (the Act), we considered all products produced by the respondents that are covered by the description in the “Scope of the Antidumping Duty Order” section, above, and sold in the home market during the POR, to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. 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 most similar foreign like product on the basis of the characteristics listed in Appendix V of the Department's November 7, 2003 antidumping questionnaires.

Normal Value Comparisons

To determine whether sales of subject merchandise to the United States were made at less than NV, we compared the export price (EP) or the constructed export price (CEP) to 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 monthly weighted-average prices for NV and compared these to individual U.S. transaction prices.

Export Price

In accordance with section 772(a) of the Act, we used EP when the subject merchandise was sold, directly or indirectly, to the first unaffiliated purchaser in the United States prior to importation, and CEP was not otherwise warranted by facts on the record. In accordance with section 772(b) of the Act, CEP is the price at which subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise, or by a seller affiliated with the producer or exporter. As discussed below, based on evidence on the record, we conclude that certain sales are made by Dofasco's U.S. affiliate, Dofasco U.S.A. (DUSA), and should thus be classified as CEP sales. Also as discussed below, we conclude that Dofasco's other sales are EP, and that all Stelco sales are EP.

Dofasco's sales in the United States through DUSA were either channel 2 (shipped directly to the U.S. customer) or channel 3 (shipped indirectly to the U.S. customer) sales. We find that for channel 2 sales both parties to the transaction (DUSA and the unaffiliated customer) were located in the United States, and that the transfer of ownership was executed in the United States. Therefore, consistent with our determination in the last review, we are classifying Dofasco's Channel 2 sales as CEP sales. See Proprietary Memorandum: Classification of Dofasco's sales as either EP or CEP, January 6, 2004.

For all other sales, while DUSA may be involved in providing some sales services, the sales are made by Dofasco. Thus, because these sales are made in Canada, we are treating these sales as EP sales. Similarly, while Stelco USA is involved in Stelco's U.S. sales, evidence on the record indicates that the sales were made by Stelco (in Canada), not Stelco USA.

The Department calculated EP or CEP based on packed prices to customers in the United States. We made deductions from the starting price (net of discounts and rebates) for movement expenses (foreign and U.S. movement, U.S. customs duty and brokerage, and post-sale warehousing) in accordance with section 772(c)(2) of the Act and section 351.401(e) of the Department's regulations. In addition, for CEP sales, in accordance with sections 772(d)(1) and (2) of the Act, we deducted from the starting price credit expenses, indirect selling expenses, including inventory carrying costs, commissions, royalties, and warranty expenses incurred in the United States and Canada associated with economic activities in the United States. As in prior reviews, certain Dofasco sales have undergone minor further processing in the United States as a condition of sale to the customer. The Department has deducted the price charged to Dofasco by the unaffiliated contractor for this minor further processing from gross unit price to determine U.S. price, consistent with Section 772(d)(2) of the Act. See Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Reviews, and Determination Not to Revoke in Part, 65 FR 9243 (February 24, 2000) (“Canadian Steel 5th rdquo;); Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada, Preliminary Results of Antidumping Duty Administrative Reviews, 64 FR 45228, 45231 (August 19, 1999); see also Certain Corrosion Resistant Carbon Steel Flat Products From Canada: Preliminary Results of Antidumping Duty Administrative Review, 68 FR 53105 (September, 9, 2003), for a discussion and as finalized, i.e., Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Review, 69 FR 2566 (January 16, 2004) (“Canadian Steel 9th”).

As provided in section 351.401(i) of the Department's regulations, we determined the date of sale based on the date on which the exporter or producer established the material terms of sale. Dofasco reported that, except for long-term contracts and sales of secondary products, the date on which all material terms of sale are established is the final order acknowledgment or re-acknowledgment date. Therefore, we used this reported date as the date of sale. For Dofasco's sales made pursuant to long-term contracts, we used date of the contract as date of sale. For Dofasco's sales of secondary products for which there is no order acknowledgment date, we preliminarily determine that date of shipment best reflects the date on which the material terms of sale are established. Accordingly, we have relied on the date of shipment as the date of sale. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Certain Durum Wheat and Hard Red Spring Wheat from Canada, 68 FR 52741 (Sept. 5, 2003) and Accompanying Issues and Decision Memorandum at Comment 3 (“Wheat from Canada”).

Stelco reported that, generally, the date of sale is the date of invoice because this is when material terms of sale are fixed. For these sales, we used the date of invoice as the date of sale. In those instances when the date of shipment occurred prior to the date of invoice, Stelco reported the date of shipment as the date of sale. Accordingly, for these preliminary results, for these sales we used the date of shipment as the date of sale. See, e.g., Wheat from Canada at Comment 3.

Normal Value

A. Home Market Viability

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV (i.e., the aggregate volume of home market sales of the foreign like product is five percent or more of the aggregate volume of U.S. sales), we compared the volume of each respondent's home market sales of the foreign like product to the volume of U.S. sales of subject merchandise. See section 773(a)(1)(C) of the Act. Based on this comparison, we determined that Dofasco's and Stelco's quantity of sales in their home market each exceeded five percent of their sales to the United States of CORE. See 19 CFR 351.404(b). Moreover, there is no evidence on the record supporting a particular market situation in the exporting companies' country that would not permit a proper comparison of home market and U.S. prices. Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on the price at which the foreign like product was first sold for consumption in the home market, in the usual commercial quantities in the ordinary course of trade and, to the extent practicable, at the same level of trade (LOT) as the EP or CEP. See “ Level of Trade” section below.

B. Affiliated Party Transactions and Arm's-Length Test

We used sales to affiliated customers in the home market only where we determined such sales were made at arm's-length prices (i.e., at prices comparable to the prices at which the respondent sold identical merchandise to unaffiliated customers). To test whether the sales to affiliates were made at arm's-length prices, we compared the unit prices of sales to affiliated and unaffiliated customers net of all movement charges, direct selling expenses, discounts and packing. In accordance with the Department's practice, if the prices charged to an affiliated party were, on average, between 98 and 102 percent of the prices charged to unaffiliated parties for merchandise identical or most similar to that sold to the affiliated party, we consider the sales to be at arm's-length prices. See 19 CFR 351.403(c). Where the affiliated party transactions did not pass the arm's-length test, all sales to that affiliated party have been excluded from the NV calculation. In addition, because the aggregate volume of sales to these affiliates is less than 5 percent of total home market sales, we did not request downstream sales. See 19 CFR 351.403(d); see also Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 (November 15, 2002).

C. Cost of Production Analysis

The Department disregarded certain Dofasco sales that failed the cost test in its last completed review. See Canadian Steel 9th. The Department disregarded certain Stelco sales that failed the cost test in its last completed review. See Canadian Steel 5th. We, therefore, have reasonable grounds to believe or suspect, pursuant to section 773(b)(2)(A)(ii) of the Act, that sales of the foreign like product under consideration for the determination of NV in this review may have been made at prices below the cost of production (COP). Thus, pursuant to section 773(b)(1) of the Act, we examined whether Dofasco's and Stelco's sales in the home market were made at prices below the COP.

We compared sales of the foreign like product in the home market with model-specific COP figures in the POR. In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the costs of materials and fabrication employed in producing the foreign like product, plus selling, general and administrative (SG&A) expenses, and all costs and expenses incidental to placing the foreign like product in a packed condition and ready for shipment. In our sales-below-cost analysis, we used home market sales and COP information provided by Dofasco and Stelco in their questionnaire responses.

We compared the weighted-average COPs 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. In determining whether to disregard home market sales made at prices below the COP, we examined whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade, in accordance with section 773(b)(1)(A) and (B) of the Act. On a product-specific basis, we compared the COP to home market prices, less any movement charges, discounts, and direct and indirect selling expenses.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of a respondent's sales of a given model were at prices less than the COP, we did not disregard any below-cost sales of that model because the below-cost sales were not made in substantial quantities within an extended period of time. Where 20 percent or more of a respondent's sales of a given model were at prices less than the COP, we disregarded the below-cost sales because they were made in substantial quantities within an extended period of time, in accordance with sections 773(b)(2)(B) and (C) of the Act. Because we compared prices to average costs in the POR, we also determined that the below-cost prices did not permit the recovery of costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act.

D. Constructed Value

In accordance with section 773(a)(4) of the Act, we used CV as the basis for NV when there were no above-cost contemporaneous sales of identical or similar merchandise in the comparison market. We calculated CV in accordance with section 773(e) of the Act. We included the cost of materials and fabrication, SG&A, 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 by the respondent in connection with the production and sale of the foreign like product in the ordinary course of trade for consumption in the foreign country. For selling expenses, we used the weighted-average home market selling expenses.

For those product comparisons for which there were sales at prices above the COP, we based NV on home market prices to affiliated (when made at prices determined to be arms-length) or unaffiliated parties, in accordance with section 351.403 of the Department's regulations. Home market starting prices were based on packed prices to affiliated or unaffiliated purchasers in the home market net of discounts and rebates. We made adjustments, where applicable, for packing and movement expenses, in accordance with sections 773(a)(6)(A) and (B) of the Act. We also 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 for circumstance-of-sales (COS) differences, in accordance with 773(a)(6)(C)(iii) of the Act and section 351.410 of the Department's regulations. For comparisons to EP, we made COS adjustments to NV by deducting home market direct selling expenses (e.g., credit, warranties, and royalties) and adding U.S. direct selling expenses. For comparison to CEP, we made COS adjustments by deducting home market direct selling expenses pursuant to section 773(a)(6)(C)(iii) of the Act and section 351.410 of the Department's regulations. We offset commissions paid on sales to the United States by the lesser of U.S. commissions or comparison (home) market indirect selling expenses.

Level of Trade

In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, we determined NV based on sales in the comparison market at the same LOT as U.S. sales. See 19 CFR 351.412. The NV LOT is the level of the starting-price sale in the comparison market or, when NV is based on CV, the level of the sales from which we derive SG&A and profit. For EP, the U.S. LOT is also the level of the starting-price sale, which is usually from exporter to importer. For CEP, it is the level of the constructed sale from the exporter to the importer.

To determine whether NV sales are at a different LOT than EP or CEP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer in the home market. 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 LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in the levels between NV and CEP affects price comparability, we adjust NV under section 773(a)(7)(B) of the Act ( the CEP offset provision). See 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). For the CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and CEP profit under section 772(d) of the Act. See Micron Technology Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001).

In the current review, as in the previous review, Dofasco claimed that sales in both the home market and the United States market were made at different LOTs. In the previous review we concluded that Dofasco did sell at different LOTs based on the selling functions performed. See Canadian Steel 9th. No new information on the record exists suggesting that the distribution systems in either the U.S. or Canadian markets, including the selling functions, classes of customer, and selling expenses for each respondent, have materially changed. Therefore, we have preliminarily concluded that Dofasco did sell at different LOTs based on the selling functions performed. However, the Department did not find that there existed a pattern of consistent price differences among the three levels of trade in the home market. See Memorandum from Javier Barrientos (AD/CVD Financial Analyst) through Mark E. Hoadley (Acting Program Manager) to the File; Certain Corrosion-Resistant Carbon Steel Flat Products from Canada: Analysis of Dofasco Inc. (Dofasco) and Do Sol Galva (DSG) for the Preliminary Results, (August 30, 2004). Therefore, we did not make LOT adjustments when comparing sales at different LOTs. Finally, after comparing the CEP LOT with the NV LOT (i.e., after excluding the selling functions performed by Dofasco's U.S. affiliate from our analysis) we have preliminarily determined that the NV LOT is not more remote from the factory than the CEP LOT. As indicated by Exhibit I.A.12 of Dofasco's Section A response, dated January 26, 2004, as well as other parts of Dofasco's response, the vast majority of selling functions for both U.S. and home market sales are performed by Dofasco in Canada. Therefore, a “CEP offset” is not warranted under section 773(a)(7)(B) of the Act.

In the current review, Stelco stated in its response that it was not claiming an LOT adjustment. However, Stelco did provide a chart of its selling functions, which we reviewed and analyzed. We also discussed these sales functions during our verification of the sales process. See Sales Verification Report. As a result of our analysis, we have preliminarily concluded that Stelco did not sell at different LOTs.

Currency Conversion

For purposes of the preliminary results, in accordance with section 773A of the Act, we made currency conversions based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York.

Preliminary Results of Review

As a result of this review, we preliminarily find that the following weighted-average dumping margins exist:

Cash Deposit Requirements

If the preliminary results are adopted in the final results of review, the following deposit requirements will be effective upon completion 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 of the final results of this administrative review, as provided in section 751(a)(1) of the Act: 1) the cash deposit rate for Dofasco, Sorevco, and DSG will be that established in the final results of this review for Dofasco (and entities collapsed with Dofasco); 2) the cash deposit rate for Stelco will be that established in the final results of this review (currently de minimis); 3) for previously reviewed or investigated companies not covered in this review, the cash deposit rate will continue to be the company-specific rate published for the most recent period; 4) if the exporter is not a firm covered in this review, a prior review, or the original less than fair value (LTFV) investigation conducted by the Department, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; 5) if neither the exporter nor the manufacturer is a firm covered in this or any previous proceeding conducted by the Department, the cash deposit rate will continue to be the “all others” rate established in the LTFV investigation, which is 18.71 percent. See Amended Final Determinations of Sales at Less Than Fair Value and Antidumping Orders: Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate From Canada, 60 FR 49582 (September 26, 1995). For shipments processed by DJG we will, 1) apply Dofasco's rate on merchandise supplied by Dofasco or DSG; 2) apply the company specific rate on merchandise supplied by other previously reviewed companies; and, 3) apply the “all others” rate for merchandise supplied by companies which have not been reviewed in the past. These cash deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Duty Assessment

Upon publication of the final results of review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department will issue appraisement instructions directly to CBP within fifteen days of publication of the final results of review. The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the results and for future deposits of estimated duties. For duty assessment purposes, we calculate an importer-specific assessment rate by dividing the total dumping margins calculated for the U.S. sales of each importer by the respective total entered value of these sales. If the preliminary results are adopted in the final results of review, this rate will be used for the assessment of antidumping duties on all entries of the subject merchandise by that importer during the POR.

The Department clarified its “automatic assessment” regulation on May 6, 2003 (68 FR 23954). This clarification will apply to entries of subject merchandise during the period of review produced by companies included in these final results of review for which the reviewed companies did not know their merchandise was destined for 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. For a full discussion of this clarification, see Notice of Policy Concerning Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

Public Comment

Pursuant to 19 CFR 351.224(b), the Department will disclose to any party to the proceeding the calculations performed in connection with these preliminary results, within five days after the date of publication of this notice. Pursuant to 19 CFR 351.309, interested parties may submit case briefs in response to these preliminary results no later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than 5 days after the time limit for filing case briefs. Parties who submit arguments in this proceeding are requested to submit with the argument: (1) a statement of the issue, (2) a brief summary of the argument, and (3) a table of authorities. Further, the Department requests that parties submitting written comments provide the Department with an additional copy of the public version of any such comments on a computer diskette. Case and rebuttal briefs must be served on interested parties in accordance with section 351.303(f) of the Department's regulations. Any interested party may request a hearing within 30 days of publication of this notice. Any hearing, if requested, will normally be held two days after the date for submission of rebuttal briefs. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such written comments or at a hearing, within 120 days after the publication of this notice, unless extended. See 19 CFR 351.213(h).

Notification to Interested Parties

This notice serves as a preliminary reminder to improters of their responsibility under regulation 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

This administrative revidw and notice is published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.