Ukraine Cut-to-Length Carbon Steel Plate Antidumping Investigation Suspension Agreement

[Federal Register: October 3, 2008 (Volume 73, Number 193)]

[Notices]

[Page 57602-57606]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr03oc08-34]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-823-808]

Suspension of Antidumping Investigation: Certain Cut-to-Length

Carbon Steel Plate From Ukraine

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of revised suspension agreement on certain cut-to-length

carbon steel plate from Ukraine.

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EFFECTIVE DATE: November 1, 2008.

SUMMARY: The Department of Commerce (``the Department'') has revised

the agreement suspending the antidumping duty investigation involving

certain cut-to-length carbon steel plate (``CTL plate'') from Ukraine.

The basis for this action is an agreement between the Department and

Ukrainian CTL plate producers accounting for substantially all imports

of CTL plate from Ukraine, wherein each signatory producer/exporter

individually agrees to make any necessary price revisions to eliminate

completely any amount by which the normal value (NV) of this

merchandise exceeds the U.S. price of its merchandise subject to the

Agreement.

FOR FURTHER INFORMATION CONTACT: Judith Wey Rudman or Jay Carreiro at

(202) 482-0192 or (202) 482-3674, respectively; Office of Policy,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street & Constitution Avenue, NW.,

Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

On October 24, 1997, the Department entered into an agreement with

the Government of Ukraine which suspended the antidumping duty

investigation on certain cut-to-length carbon steel plate (CTL plate)

from Ukraine. See Suspension of Antidumping Duty Investigation: Certain

Cut-to-Length Carbon Steel Plate from Ukraine, 62 FR 61766 (November

19, 1997). In accordance with section 734(g) of the Tariff Act of 1930

(the Act), on November 19, 1997, the Department also published its

final determination of sales at less than fair value in this case. See

Notice of Final Determination of Sales at Less Than Fair Value: Certain

Cut-to-Length Carbon Steel Plate From Ukraine, 62 FR 61754 (November

19, 1997).

On February 17, 2006, based on the evidence of economic reforms to

that date, the Department revoked Ukraine's status as a non-market

economy country under section 771(18)(B) of the Act, effective on

February 1, 2006. Based on a request by certain Ukrainian producers of

CTL plate, we are converting the current non-market economy suspension

agreement to a market economy agreement. On August 5, 2008,

representatives of OJSC Alchevsk Iron & Steel Works, Azovstal Iron &

Steel Works, and Ilyich Iron & Steel Works (collectively the

``Ukrainian CTL plate producers'') initialed a proposed, revised

suspension agreement. We invited interested parties to comment on the

proposed agreement. We received no comments.

On September 29, 2008, the revised Suspension Agreement was signed

by

[[Page 57603]]

representatives of the Ukrainian CTL plate producers and the

Department. The effective date of the agreement is November 1, 2008.

Scope of the Agreement

For a complete description of the scope of the agreement, See

Agreement Suspending the Antidumping Investigation on Certain Cut-to-

Length Carbon Steel Plate from Ukraine, Appendix A, attached hereto.

Suspension of Investigation

The Department consulted with the parties to the proceeding and, in

accordance with section 734(b) of the Act, we have determined that the

agreement will eliminate completely sales at less than fair value of

imported subject merchandise. Moreover, in accordance with section

734(d) of the Act, we find that the agreement is in the public

interest, and that the agreement can be monitored effectively. See

Public Interest and Effective Monitoring Assessment Memorandum, dated

September 29, 2008. We find, therefore, that the criteria for

suspension of an investigation pursuant to sections 734(b) and (d) of

the Act have been met. The terms and conditions of this agreement,

signed September 29, 2008, are set forth in Appendix I to this notice.

Administrative Protective Order Access

The Administrative Protective Orders (APOs) the Department granted

in the original investigation segment of this proceeding remain in

place. While the investigation is suspended, parties subject to those

APOs may retain, but may not use, information received under those

APOs. All parties wishing access to business proprietary information

submitted during the administration of the 2008 Suspension Agreement

must submit new APO applications, using the Department's current

application, Form ITA-367(2.08). An APO for the administration of the

2008 Suspension Agreement will be placed on the record within five days

of the date of publication of this notice in the Federal Register.

Business proprietary information released under APO in the 1997

Suspension of Antidumping Duty Investigation: Certain Cut-to-Length

Carbon Steel Plate from Ukraine must be destroyed in accordance with

item 19(d) of the Department's application for APO, Form ITA-367

(3.89).

We are publishing this notice in accordance with section

734(f)(1)(A) of the Act and 19 CFR 351.208(g)(2).

Dated: September 29, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

APPENDIX I

Agreement Suspending the Antidumping Investigation of Certain Cut-to-

Length Carbon Steel Plate From Ukraine (A-823-808)

Pursuant to section 734(b) of the Tariff Act of 1930, as amended

(19 U.S.C. Sec. 1673c(b)) (the ``Act''), and 19 CFR 351.208 (the

``Regulations''), the U.S. Department of Commerce (the

``Department'') and the signatory producers/exporters of certain

cut-to-length carbon steel plate from Ukraine (the ``Signatories'')

enter into this suspension agreement (the ``Agreement''). As of the

effective date, this Agreement supersedes the suspension agreement

entered into by the Department and the Government of Ukraine on

October 24, 1997. By agreement of the Parties, the October 24, 1997

suspension agreement shall cease to have force or effect as of the

effective date of this Agreement.\1\ On the basis of this Agreement,

the Department shall continue to suspend its antidumping

investigation, which it completed on October 24, 1997 (62 FR 61754,

November 19, 1997), with respect to certain cut-to-length carbon

steel plate from Ukraine, subject to the terms and provisions set

forth below.

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\1\ However, the export licenses issued prior to the effective

date of this agreement will be valid until their expiration date

(i.e. 60 days after issuance) pursuant to the terms of the October

24, 1997 suspension agreement.

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(A) Product Coverage

For purposes of this Agreement, the products covered are certain

cut-to-length carbon steel plate, as described in Appendix A.

(B) U.S. Import Coverage

The signatory producers/exporters collectively are the producers

and exporters in Ukraine that, during the most recently completed

calendar year, accounted for substantially all (not less than 85

percent) of the subject merchandise imported into the United States,

as provided in the Department's regulations. The Department may at

anytime during the period of the Agreement require additional

producers/exporters in Ukraine to sign the Agreement in order to

ensure that not less than substantially all imports into the United

States are covered by the Agreement.

In reviewing the operation of the Agreement for the purpose of

determining whether this Agreement has been violated or is no longer

in the public interest, the Department will consider imports into

the United States from all sources of the merchandise described in

Section A of the Agreement. For this purpose, the Department will

consider factors including, but not limited to, the following:

volume of trade, pattern of trade, whether or not the reseller is an

original equipment manufacturer, and the reseller's export price

(``EP'').

(C) Basis of the Agreement

On and after the effective date of the Agreement, each signatory

producer/exporter individually agrees to make any necessary price

revisions to eliminate completely any amount by which the normal

value (``NV'') of this merchandise exceeds the U.S. price of its

merchandise subject to the Agreement. For this purpose, the

Department will determine the NV in accordance with section 773(e)

of the Act and U.S. price in accordance with section 772 of the Act.

(1) For the period from the effective date of this Agreement

through the release of the first NVs, each signatory producer/

exporter agrees not to sell its merchandise subject to this

Agreement in the United States.

(2) For all sales occurring on and after the date of issuance of

the first NVs, each signatory producer/exporter agrees not to sell

its merchandise subject to this Agreement to any unaffiliated

purchaser in the United States at prices that are less than the NV

of the merchandise, as determined by the Department. These NVs shall

apply to sales occurring during the semi-annual period (i.e.,

January through June and July through December), beginning on the

first day of the month following the date the Department provides

the NVs, except that for the period from the effective date of this

Agreement through December 31, 2008, the NVs are applicable on the

effective date of this Agreement or upon issuance of the final NVs,

whichever comes later.

(3) Normally, preliminary NVs for the January through June semi-

annual period will be provided to the parties on November 20 and the

final NVs will be provided to the parties on December 20. Normally,

the preliminary NVs for the July through December semi-annual period

will be provided to the parties on May 20 and the final NVs will be

provided to the parties on June 20.\2\

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\2\ The issuance of the NV may be delayed in order to resolve

issues raised in comments from interested parties or by the

Department and for the purpose of allowing sufficient time for

signatories to respond to the Department's request for sales and

cost data. In accordance with section 773(f) of the Act, the

Department will examine prices and costs within Ukraine and, for any

sales period, may disregard particular prices or costs when the

prices are not in the ordinary course of trade, the costs are not in

accordance with the generally accepted accounting principles, the

costs do not reasonably reflect the costs associated with the

production and sale of the merchandise, or in other situations

provided for in the Act or the Department's regulations. Examples of

possible areas in which adjustments may be necessary include, but

are not limited to, costs related to energy, depreciation,

transactions among affiliates, barters, as well as items that are

not recognized by the home country's generally accepted accounting

principles.

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(D) Monitoring

Each signatory producer/exporter will supply to the Department

all information that the Department decides is necessary to ensure

that the producer/exporter is in full compliance with the terms of

the Agreement. As explained below, the Department will provide each

signatory producer/exporter a detailed request for information and

prescribe a required format and method of

[[Page 57604]]

data compilation, not later than the beginning of each reporting

period.

(1) Sales Information

The Department will require each producer/exporter to report, in

electronic form in the prescribed format and using the prescribed

method of data compilation, each sale of the merchandise subject to

the Agreement, either directly or indirectly to unaffiliated

purchasers in the United States, including each adjustment

applicable to each sale, as specified by the Department.

Each signatory producer/exporter requesting NVs as of the

effective date of the Agreement through December 31, 2008 will have

submitted sales data, covering the period from July 1, 2007 to

December 31, 2007, prior to the effective date of this Agreement.

Each signatory producer/exporter requesting NVs to be effective from

January 1, 2009 to June 30, 2009 will have submitted sales data,

covering the period from January 1, 2008 to June 30, 2008, prior to

the effective date of this Agreement. After the effective date of

this Agreement, the first report of sales data shall be submitted to

the Department, in electronic form (e.g., on diskette, zip disk, or

CD ROM) in the prescribed format and using the prescribed method of

data compilation, not later than January 31, 2009, and shall contain

the specified sales information covering the period July 1, 2008 to

December 31, 2008. Subsequent reports of sales data shall be

submitted to the Department not later than July 31 and January 31 of

each year, and each report shall contain the specified sales

information for the semiannual period ending one month prior to the

due date, except that if the Department receives information that a

possible violation of the Agreement may have occurred, the

Department may request sales data on a more frequent basis.

(2) Cost Information

Producers/exporters must request NVs for all subject merchandise

that will be sold in the United States. For those products for which

the producer/exporter is requesting NVs, the Department will require

each producer/exporter to report: its actual cost of manufacturing;

selling, general and administrative (``SG&A'') expenses; and profit

data on a semiannual basis, in the prescribed format and using the

prescribed method of data compilation. As indicated in Appendix B,

profit will be reported by the producers/exporters on a semiannual

basis. Each such producer/exporter also must report anticipated

increases in production costs in the semiannual period in which the

information is submitted resulting from factors such as anticipated

changes in production yield, changes in production processes,

changes in production quantities or changes in production

facilities.

Each signatory producer/exporter requesting NVs as of the

effective date of the Agreement through December 31, 2008 will have

submitted cost data, covering the period from July 1, 2007 to

December 31, 2007, prior to the effective date of this Agreement.

Each signatory producer/exporter requesting NVs for the period

January 1, 2009 to June 30, 2009 will have submitted cost data,

covering the period from January 1, 2008 to June 30, 2008, prior to

the effective date of this Agreement. After the effective date of

this Agreement, the first report of cost data shall be submitted to

the Department not later than February 14, 2009, and shall contain

the specified cost data covering the period July 1, 2008 to December

31, 2008. Each subsequent report shall be submitted to the

Department not later than August 14 and February 14 of each year,

and each report shall contain the specified information for the

semiannual period ending 45 days prior to the due date.

(3) Special Adjustment of Normal Value

If the Department determines that the NV it calculated for a

previous semiannual period was erroneous because the reported costs

for that period were inaccurate or incomplete, or for any other

reason, the Department may adjust the NV in a subsequent period or

periods, unless the Department determines that Section F of the

Agreement applies.

(4) Verification

Each producer/exporter agrees to permit full verification of all

cost and sales information semiannually, or more frequently, as the

Department deems necessary.

(5) Bundling or Other Arrangements

Producers/exporters agree not to circumvent the Agreement. In

accordance with the dates set forth in section D(1) of this

Agreement, producers/exporters will submit a written statement to

the Department certifying that the sales reported herein were not,

or are not part of or related to, any bundling arrangement, on-site

processing arrangement, discounts/free goods/financing package, swap

or other exchange where such arrangement is designed to circumvent

the basis of the Agreement.

Where there is reason to believe that such an arrangement does

circumvent the basis of the Agreement, the Department will request

producers/exporters to provide within 15 days all particulars

regarding any such arrangement, including, but not limited to, sales

information pertaining to covered and non-covered merchandise that

is manufactured or sold by producers/exporters. The Department will

accept written comments, not to exceed 30 pages, from all parties no

later than 15 days after the date of receipt of such producer/

exporter information.

If the Department, after reviewing all submissions, determines

that such arrangement circumvents the basis of the Agreement, it

may, as it deems most appropriate, utilize one of two options: (1)

The amount of the effective price discount resulting from such

arrangement shall be reflected in the NV in accordance with section

D(3) of this Agreement, or (2) the Department shall determine that

the Agreement has been violated and take action according to the

provisions under section F of this Agreement.

(6) Rejection of Submissions

The Department may reject any information submitted after the

deadlines set forth in this section or any information that it is

unable to verify to its satisfaction. If information is not

submitted in a complete and timely fashion or is not fully

verifiable, the Department may calculate NV, and/or U.S. price based

on facts otherwise available, as it determines appropriate, unless

the Department determines that section F of this Agreement applies.

(E) Disclosure and Comment

(1) The Department may make available to representatives of each

interested party to the proceeding, under appropriately drawn

administrative protective orders, business proprietary information

submitted to the Department during the reporting period as well as

the results of its analysis under section 777 of the Act.

(2) For the sales period beginning on January 1, 2009, the

Department will disclose to each producer/exporter the preliminary

results and methodology of the Department's calculations of its NVs

not later than November 20, 2008. At that time, the Department may

also make available such information to the interested parties to

the proceeding in accordance with this section.

(3) Normally, not later than May 20 and November 20 of each

ensuing sales period, the Department will disclose to each producer/

exporter the preliminary results and methodology of the Department's

calculations of its NVs. At that time, the Department may also make

available such information to the interested parties to the

proceeding, in accordance with this section.

(4) Not later than 7 days after the date of disclosure under

section E(2) and E(3) of this Agreement, the parties to the

proceeding may submit written comments to the Department, not to

exceed 15 pages. Parties may submit rebuttal briefs within five days

after the time limit for filing the aforementioned written comments.

After reviewing these submissions, the Department will provide to

each producer/exporter its NVs as provided in section C(2) of this

Agreement. In addition, the Department may provide such information

to interested parties as specified in this section.

(F) Violations of the Agreement

If the Department determines that the Agreement is being or has

been violated or no longer meets the requirements of section 734(b)

or (d) of the Act, the Department shall take action it determines

appropriate under section 734(i) of the Act and the applicable

regulations.

(G) Other Provisions

In entering into the Agreement, the signatory producers/

exporters do not admit that any sales of merchandise subject to the

Agreement have been made at less than fair value.

(H) Termination or Withdrawal

Termination of the suspended investigation will be considered in

accordance with the five-year review provisions of section 351.218

of the Department's regulations.

Any producer/exporter may withdraw from the Agreement at any

time upon notice to the Department. Withdrawal shall be effective 60

days after such notice is given to the Department. Upon withdrawal,

the

[[Page 57605]]

Department shall follow the procedures outlined in section 734(i)(1)

of the Act.

(I) Definitions

For purposes of the Agreement, the following definitions apply:

(1) ``U.S. price'' means the EP or constructed export price

(``CEP'') at which merchandise is sold by the producer or exporter

to the first unaffiliated person in the United States, including the

amount of any discounts, rebates, price protection or ship and debit

adjustments, and other adjustments affecting the net amount paid or

to be paid by the unaffiliated purchaser, as determined by the

Department under section 772 of the Act.

(2) ``Normal value'' means the constructed value (``CV'') of the

merchandise, as determined by the Department under section 773 of

the Act and the corresponding sections of the Department's

regulations, and as adjusted in accordance with Appendix B to this

Agreement.

(3) ``Producer/Exporter'' means (1) the foreign manufacturer or

producer, (2) the foreign producer or reseller which also exports,

and (3) the affiliated person by whom or for whose account the

merchandise is imported into the United States, as defined in

section 771(28) of the Act.

(4) ``Date of sale'' means the date of the invoice as recorded

in the exporter's or producer's records kept in the ordinary course

of business, unless the Department determines that a different date

better reflects the date on which the exporter or producer

establishes the material terms of sale, as determined by the

Department under its regulations.

The effective date of this Agreement is November 1, 2008.

For the Ukrainian Producers/Exporters:

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Walter J. Spak,

for OJSC Alchevsk Iron and Steel Works.

Date: September 29, 2008.

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Martin J. Lewin,

for Azovstal Iron & Steel Works.

Date: September 29, 2008.

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Martin J. Lewin,

for Ilyich Iron & Steel Works.

Date: September 29, 2008.

For the U.S. Department of Commerce:

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David M. Spooner,

Assistant Secretary for Import Administration.

Date: September 29, 2008.

Appendix A--Product Coverage

For purposes of this Agreement, the products covered are hot-

rolled iron and non-alloy steel universal mill plates (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 mm, not in coils and without patterns in relief),

of rectangular shape, neither clad, plated nor coated with metal,

whether or not painted, varnished, or coated with plastics or other

nonmetallic substances; and certain iron and non-alloy steel flat-

rolled products not in coils, of rectangular shape, hot-rolled,

neither clad, plated, nor coated with metal, whether or not painted,

varnished, or coated with plastics or other nonmetallic substances,

4.75 mm or more in thickness and of a width which exceeds 150 mm and

measures at least twice the thickness. Included as subject

merchandise in the Agreement are flat-rolled products of

nonrectangular cross-section where such cross-section is achieved

subsequent to the rolling process (i.e., products which have been

``worked after rolling'')--for example, products which have been

bevelled or rounded at the edges. This merchandise is currently

classified in the Harmonized Tariff Schedule of the United States

(HTS) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030,

7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000,

7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000,

7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000,

7212.40.5000, 7212.50.0000. Although the HTS subheadings are

provided for convenience and customs purposes, our written

description of the scope of this agreement is dispositive.

Specifically, excluded from the subject merchandise within the scope

of this Agreement is grade X-70 plate.

Appendix B--Principles of Cost

General Framework

The cost information reported to the Department that will form

the basis of the NV calculations for purposes of the Agreement must

be: \3\

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\3\ See footnote 1 in Section C(2) of the Agreement.

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Comprehensive in nature and based on a reliable

accounting system (i.e., a system based on well-established

standards that can be tied to the audited financial statements);

Calculated on a semiannual weighted-average basis of

the plants or cost centers manufacturing the product;

Based on fully-absorbed costs of production, including

any downtime;

Valued in accordance with generally accepted accounting

principles; and

Reflective of appropriately allocated common costs so

that the costs necessary for the manufacturing of the product are

not absorbed by other products.

Additionally, a single figure should be reported for each cost

component making up the cost of production.

Cost of Manufacturing (``COM'')

COM is reported by major cost category and for major stages of

production. Weighted-average costs are used for a product that is

produced at more than one facility, based on the product's cost at

each facility and relative production quantities.

Direct materials costs include the acquisition costs of all

materials that are identified as part of the finished product and

may be traced to the finished product in an economically feasible

way. In contrast to indirect materials, direct materials are applied

and assigned directly to a finished product. Direct materials costs

should include transportation charges, import duties, and other

expenses normally associated with obtaining the materials that

become an integral part of the finished product.

Direct labor costs are the labor costs identified with a

specific product. These costs are not allocated among products

except when two or more products are produced at the same cost

center. Direct labor costs should include salary, bonus and overtime

pay, training expenses, and all fringe benefits. Any contracted-

labor expense should reflect the actual billed cost.

Variable manufacturing overhead costs include those production

costs, other than direct materials or direct labor, that generally

vary in total with changes in the volume of merchandise produced at

a given level of operations. Variable manufacturing overhead costs

may include indirect materials (e.g., supplies used in the

manufacturing process), indirect labor (e.g. supervisory labor paid

on an hourly basis), utilities (e.g., energy), and other variable

overhead costs. Because variable overhead costs are typically

incurred for an entire production line or factory, the costs must be

allocated to the products produced using a reasonable basis.

Fixed manufacturing overhead costs include those production

costs that generally do not vary in total with changes in the volume

of merchandise produced at a given level of operations. Fixed

manufacturing overhead costs may include the costs incurred for

building or equipment rental, depreciation, supervisory labor paid

on a salary basis, plant property taxes, and factory administrative

costs. In addition, fixed manufacturing overhead costs include

research and development (``R&D'') costs that relate specifically to

the subject merchandise.

Cost of Production (``COP'')

COP is equal to the sum of direct materials, direct labor,

variable manufacturing overhead, and fixed manufacturing overhead

(i.e. COM) plus SG&A expenses in the home market (``HM'').

SG&A expenses are those expenses incurred for the operation of

the corporation as a whole and not directly related to the

manufacture of a particular product. They include corporate general

and administrative expenses, financing expenses, and general

research and development expenses. Additionally, direct and indirect

selling expenses incurred in the HM for sales of the product under

investigation are included. Such expenses are allocated to COM using

a ratio of SG&A costs.

Constructed Value

CV is equal to the sum of materials, labor and overhead (COM)

and SG&A expenses plus profit in the comparison market and the cost

of packing for exportation to the United States.

Calculation of Suspension Agreement Normal Values

NVs (for purposes of the Agreement) are calculated by adjusting

the CV and are provided for both EP and CEP transactions. In effect,

any expenses uniquely associated with the covered products sold in

the HM are subtracted from the CV, and any such

[[Page 57606]]

expenses that are uniquely associated with the covered products sold

in the United States are added to the CV to calculate the NV.

``Export Price''--Generally, a U.S. sale is classified as an EP

sale when the first sale to an unaffiliated person occurs before the

goods are imported into the United States. In cases where the

foreign manufacturer knows or has reason to believe that the

merchandise is ultimately destined for the United States, the

manufacturer's sale is the sale subject to review. If, on the other

hand, the manufacturer sold the merchandise to a foreign trader

without knowledge of the trader's intention to export the

merchandise to the United States, then the trader's first sale to an

unaffiliated person is the sale subject to review. For EP NVs, the

CV is adjusted for movement costs and differences in direct selling

expenses such as, commissions, credit, warranties, technical

services, advertising, and sales promotion.

``Constructed Export Price''--Generally, a U.S. sale is

classified as a CEP sale when the first sale to an unaffiliated

person occurs after importation. However, if the first sale to an

unaffiliated person is made by a person in the United States

affiliated with the foreign exporter, CEP applies even if the sale

occurs prior to importation, unless the U.S. affiliate performs only

clerical functions in connection with the sale. For CEP NVs, the CV

is adjusted similar to EP sales, with differences for adjustment to

U.S. and HM indirect selling expenses.

Home market direct selling expenses are expenses that are

incurred as a direct result of a sale. These include such expenses

as commissions, advertising, discounts and rebates, credit, warranty

expenses, freight costs, etc. Certain direct-selling expenses are

treated individually. They include:

Commission expenses, i.e., payments to unaffiliated

parties for sales in the HM.

Credit expenses, i.e., expenses incurred for the

extension of credit to HM customers.

Movement expenses, e.g., foreign inland freight and

insurance expenses, warehousing, and foreign brokerage, handling and

port charges.

U.S. direct selling expenses are the same as HM direct selling

expenses except that they are incurred for sales in the United

States. Movement expenses are additional expenses associated with

importation into the United States, which typically include: U.S.

inland freight and insurance expenses; U.S. brokerage, handling and

port charges; U.S. Customs duties, U.S. warehousing; and

international freight and insurance.

U.S. indirect selling expenses include general fixed expenses

incurred by the U.S. sales subsidiary or affiliated exporter for

sales to the United States and may also include a portion of

indirect expenses incurred in the HM for export sales, if those

expenses are associated with commercial activity that takes place in

the United States.

The EP and CEP NVs are calculated as follows:

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For EP transactions

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+ Direct Materials.

+ Direct Labor.

+ Factory Overhead.

= Cost of Manufacturing (COM).

+ Home Market SG&A.

= Cost of Production (COP).

+ U.S. Packing.

+ Profit.

= Constructed Value.

+ U.S. Direct-Selling Expense.

+ U.S. Commission Expense.

+ U.S. Movement Expense.

+ U.S. Credit Expense.

- HM Direct-Selling Expense.

- HM Commission Expense.\1\

- HM Credit Expense.

= NV for EP Sales.

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\1\ If the company does not have HM commissions, HM indirect expenses

are subtracted only up to the amount of the U.S. Commissions.

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For CEP transactions

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+ Direct Materials.

+ Direct Labor.

+ Factory Overhead.

= Cost of Manufacturing (COM).

+ Home Market SG&A.

= Cost of Production (COP).

+ U.S. Packing.

+ Profit.

= Constructed Value.

+ U.S. Direct-Selling Expense.

+ U.S. Indirect-Selling Expense.

+ U.S. Commission Expense.

+ U.S. Movement Expense.

+ U.S. Credit Expense.

+ U.S. Further Manufacturing Expenses (if

any).

+ CEP Profit.

- HM Direct-Selling Expense.

- HM Commission Expense.\1\

- HM Credit Expense.

= NV for CEP Sales.

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\1\ If the company does not have HM commissions, HM indirect expenses

are subtracted only up to the amount of the U.S. Commissions.

[FR Doc. E8-23393 Filed 10-2-08; 8:45 am]

BILLING CODE 3510-DS-P