[Federal Register Volume 59, Number 106 (Friday, June 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12798]


[[Page Unknown]]

[Federal Register: June 3, 1994]


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Part IX





Department of Commerce





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International Trade Administration



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Affirmative Preliminary Determination of Circumvention of Antidumping 
Duty Order and Correction; Notices
DEPARTMENT OF COMMERCE

International Trade Administration
[A-201-806]

 

Steel Wire Rope from Mexico; Affirmative Preliminary 
Determination of Circumvention of Antidumping Duty Order

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

ACTION: Notice of affirmative preliminary determination of 
circumvention of antidumping duty order.

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SUMMARY: On May 26, 1993, the Department of Commerce received an 
allegation of circumvention of the antidumping duty order on steel wire 
rope from Mexico. Pursuant to that allegation, the Department of 
Commerce initiated a circumvention inquiry on September 17, 1993, which 
was published in the Federal Register on September 27, 1993 (58 FR 
50349).
    The Department of Commerce has conducted that inquiry and 
preliminarily determines that imports into the United States of steel 
wire strand from Mexico, which are assembled in the United States into 
steel wire rope for sale in the United States, are circumventing the 
antidumping duty order on steel wire rope from Mexico within the 
meaning of section 781(a) of the Tariff Act of 1930, as amended, and 19 
CFR 353.29(e). Interested parties are invited to comment on this 
preliminary determination.

EFFECTIVE DATE: June 3, 1994.
FOR FURTHER INFORMATION CONTACT: Sandra Yacura or Thomas Prosser at 
(202) 482-5253, Office of Antidumping Compliance, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On May 26, 1993, the Department of Commerce (the Department) 
received a petition filed by the Committee of Domestic Steel Wire Rope 
and Specialty Cable Manufacturers (the Committee) requesting an 
investigation to determine whether imports of steel wire strand (also 
known as stranded wire or strand) are circumventing the antidumping 
duty order on steel wire rope from Mexico (58 FR 16173, March 25, 1993) 
within the meaning of section 781(a) of the Tariff Act of 1930, as 
amended (the Tariff Act). Subsequent submissions from the Committee, 
addressing deficiencies in the original request, were received on 
August 13, August 18, and August 20, 1993. On April 11, 1994, the 
Committee submitted copies of the Census Bureau data that it had 
summarized in earlier submissions. On September 27, 1993, the 
Department published in the Federal Register a Notice of Initiation of 
Anticircumvention Inquiry; Steel Wire Rope from Mexico (58 FR 50349). 
The inquiry covers the period from October 1, 1992 to September 30, 
1993.
    On November 19, 1993, the Department issued a questionnaire to 
Grupo Camesa S.A. de C.V. (Grupo Camesa) and its United States 
affiliate, Camesa Inc. (collectively, Camesa). Camesa responded to the 
questionnaire on December 20, 1993. The Department determined that this 
submission was deficient and issued a supplemental questionnaire on 
January 31, 1994. The Department received a response to the 
supplemental questionnaire on February 16, 1994. On March 15, 1994, the 
Committee submitted comments with respect to Camesa's responses.

Scope of Antidumping Duty Order

    The product covered by the order is steel wire rope, which is 
defined in the Department's antidumping duty order on steel wire rope 
from Mexico as: ``ropes, cables, and cordage of iron or carbon steel, 
other than stranded wire, not fitted with fittings or made up into 
articles, and not made up of plated wire.''
    During the period of this inquiry (POI), such merchandise was 
classifiable under subheadings 7312.10.9030, 7312.10.9060, and 
7312.10.9090 of the Harmonized Tariff Schedule (HTS). HTS subheadings 
are provided for convenience and for Customs purposes. The Department's 
written description of the scope of the order remains dispositive.

Scope of the Anticircumvention Inquiry

    Products subject to the circumvention inquiry are entries of 
strand, which are defined as stranded wire having a lay or twist of not 
more than 1 revolution for a length equal to the strand diameter 
multiplied by 8.5. During the POI, such merchandise was classifiable 
under subheading 7312.10.3020 of the HTS. The HTS subheading is 
provided for convenience and for Customs purposes. The Department's 
written description of the scope of the inquiry remains dispositive.

Nature of the Circumvention Inquiry

    Section 781(a)(1) of the Tariff Act provides that if:
    (A) A product sold in the United States is of the same class or 
kind as merchandise that is the subject of an order, and
    (B) Such product sold in the United States is completed or 
assembled in the United States from parts or components produced in the 
foreign country with respect to which such order applies, and
    (C) The difference between the value of such product sold in the 
United States and the value of the imported parts and components 
referred to in (B) above is small, the Department, after taking into 
account any advice provided by the U.S. International Trade Commission 
(ITC), may include within the scope of such order the imported parts or 
components referred to in paragraph (B) above that are used in the 
completion or assembly of the merchandise in the United States at any 
time such order is in effect. Section 781(a)(2) of the Tariff Act 
further provides that, in determining whether to include parts or 
components in an antidumping duty order, the Department shall take into 
account such factors as (A) pattern of trade; (B) whether the 
manufacturer or exporter of the parts or components is related to the 
person who assembles or completes the merchandise sold in the United 
States from the parts or components produced in the foreign country 
with respect to which the order applies, and (C) whether imports into 
the United States of the parts or components produced in such foreign 
country have increased after the issuance of such order.

I. Statutory Criteria

(A) Class or Kind of Merchandise

    In this inquiry, the merchandise completed at Camesa Inc.'s 
Rosenberg, Texas, facility and sold in the United States is steel wire 
rope. As the antidumping duty order encompasses ``ropes, cables, and 
cordage of iron or carbon steel, other than stranded wire, not fitted 
with fittings or made up into articles, and not made up of plated 
wire,'' the steel wire rope sold in the United States is of the same 
class or kind of merchandise as that subject to the antidumping duty 
order on steel wire rope from Mexico.

(B) Parts/Components Produced in the Country to Which the Order Applies

    The component of wire rope being imported is defined as stranded 
wire having a lay or twist of not more than 1 revolution for a length 
equal to the strand diameter multiplied by 8.5. This strand is produced 
by Grupo Camesa in Mexico, imported into the United States for closure 
into steel wire rope at the Camesa Inc. facility at Rosenberg, Texas, 
and subsequently sold in the United States by Camesa Inc.

(C) Difference in Value

    In this anticircumvention inquiry, we attempted to base our 
analysis of the difference in value on both a quantitative analysis of 
the value of the finishing process in the United States, and a 
qualitative analysis of the nature of the processing performed in the 
United States. This approach is consistent with our analysis in 
previous anti-circumvention inquiries. See, e.g., Certain Carbon Steel 
Butt-Weld Pipe Fittings from the People's Republic of China; 
Affirmative Final Determination of Circumvention of Antidumping Duty 
Order, 59 FR 15155 (March 31, 1994).
    Generally, in an anticircumvention inquiry, a quantitative analysis 
is based on a comparison of the value between the finished product sold 
in the United States and the value of the component imported from the 
country to which the order applies. See, e.g., Granular 
Polytetrafluoroethylene Resin from Italy, Preliminary Affirmative 
Determination of Circumvention of Antidumping Duty Order, 57 FR 43218 
(September 18, 1992). However, in order to make an effective 
comparison, the Department must ascertain that it is using the 
appropriate value for the imported component. To that end, we provided 
the respondent with three options for demonstrating that the price of 
the wire strand imported by Camesa Inc. from Grupo Camesa represented a 
valid market price for use in our difference-in-value calculation. The 
options were as follows: (1) Sales prices for strand sold to unrelated 
parties in the home market and largest third country market; (2) 
purchase prices paid to unrelated suppliers in Mexico by Grupo Camesa 
for strand; or (3) monthly weighted-average manufacturing costs for 
strand sold to Camesa Inc. during the POI. In order for us to ascertain 
the value of the completed merchandise sold in the United States, we 
also requested that Camesa provide cost data relevant to the production 
of steel wire rope in the United States.
    Camesa, however, failed to provide any of the requested 
information. Instead, Camesa provided a single price quotation from a 
supplier in a third country. Camesa's failure to provide the requested 
information prevented the Department from determining whether the 
difference between the value of the steel wire rope sold in the United 
States and the value of the strand produced in Mexico is small. 
Accordingly, the Department is required to rely on the best information 
available (BIA), pursuant to section 776(c) of the Tariff Act, to make 
the determination.
    In deciding what to use as BIA, the Department's regulations at 19 
CFR 353.37(b) state that the Department may take into account whether a 
party refuses to provide requested information. Thus, the Department 
may determine, on a case-by-case basis, what constitutes BIA.
    Because Camesa refused to provide the requested information, as 
BIA, we preliminarily determine that the quantitative difference 
between the value of the finished steel wire rope sold in the United 
States and the value of the strand produced in Mexico is small. This 
eliminates the need for the Department's qualitative analysis of the 
nature of the processing Camesa Inc. performed in the United States. 
However, we note that the result of a qualitative analysis supports the 
BIA assumption that the difference between the value of the imported 
strand and the value of the finished rope is small, as discussed below.
    According to the description of the manufacturing process provided 
by the ITC in its final affirmative determination of injury (as 
discussed in the following paragraphs) concerning imports of steel wire 
rope from Argentina and Mexico (see Steel Wire Rope from Argentina and 
Mexico, Determinations of the Commission in Investigations Nos. 731-TA-
457 and 479 (Final) Under the Tariff Act of 1930, Together With the 
Information Obtained in the Investigations, August 1991, pages A17-
A21), the manufacturing process for steel wire rope consists of three 
major steps: (1) Drawing rod into wire, (2) stranding wire, and (3) 
closing strands into rope. Camesa Inc. performs only the closing 
process in the United States.
    In the first step, steel wire rod is heat treated (called 
patenting), coated, cleaned, and reduced to a smaller diameter through 
a series of dies to wire. Depending on the amount of reduction during 
drawing (called the draft), the wire may also undergo patenting and re-
drawing to a smaller diameter.
    In the second step, strands are formed in a single operation from 
individual wires laid about a core so that all wires in a strand can 
move in unison to distribute load and bending stresses equally. This is 
achieved with ``tubular'' or ``planetary'' stranding machines. Strand 
used for making wire rope is generally lubricated as the wires move 
into the stranding die. After emerging from the stranding die, the 
strand is frequently ``postformed,'' a process that involves passing 
the strand through a series of straightening rollers in order to remove 
excessive twist. The strand may be die-formed or flattened, or coated 
at this point.
    The third step, the finishing operation, is called ``closing'' and 
is accomplished on a tubular or planetary closer, operating in a manner 
similar to tubular or planetary stranders. Spools or bobbins of strand 
are placed in cradles in the closer to dispense simultaneously all 
strands of a sufficient length needed to make a single rope without a 
splice. The closing die presses the strands together, forming the rope.
    Based on the above description of the manufacturing process for 
steel wire rope, we preliminarily determine that the finishing 
operation performed by Camesa Inc. in the United States represents a 
minor portion of the manufacturing process of steel wire rope, and adds 
minor value when compared to the production of the wire strand, as 
alleged by the petitioner in its anticircumvention inquiry request.
    The Department has determined, based on BIA, that the quantitative 
difference between the value of the steel wire rope sold in the United 
States and the value of the wire strand produced in Mexico is small. 
Though not necessary for this conclusion, the Department further notes 
that a qualitative analysis of the manufacturing process for steel wire 
rope demonstrates that the finishing operation performed by Camesa Inc. 
represents a minor portion of the manufacturing process of steel wire 
rope. Therefore, we preliminarily determine that the difference between 
the value of the strand produced in Mexico and the value of the wire 
rope sold in the United States is small within the meaning of section 
781(a) of the Tariff Act.

II. Factors

    In accordance with section 781(a)(2) of the Tariff Act, the 
Department considered the following factors in determining whether to 
include strand within the order: (A) The pattern of trade, (B) whether 
the manufacturer or exporter of the parts or components is related to 
the person who assembles or completes the merchandise sold in the 
United States from the parts or components produced in the foreign 
country with respect to which the order applies, and (C) whether 
imports into the United States of the parts or components produced in 
such foreign country have increased after the issuance of such order.

(A) Pattern of Trade

    Generally, the Department considers circumvention to be more likely 
when the imports of the merchandise subject to the order have 
decreased. To evaluate the pattern of trade in this case, we examined 
the timing and quantities of exports of steel wire rope from Mexico to 
the United States during the POI. We also examined the timing and 
quantities of Camesa's imports into the United States of steel wire 
rope produced by Grupo Camesa in Mexico.
    U.S. Census Bureau (Census Bureau) statistics indicate that, during 
the nine months prior to the POI, steel wire rope imports from Mexico 
to the United States averaged 316.44 net tons per month. However, 
during the first half of the POI, imports of steel wire rope from 
Mexico dropped to an average of ten net tons per month. Census Bureau 
statistics for the second half of the POI were not available.
    Although Camesa imported steel wire rope from Mexico to the United 
States prior to the POI, Camesa had no such imports of steel wire rope 
during the POI. Thus, the pattern of trade of imports of merchandise 
subject to the order indicates that circumvention may have occurred 
during the POI.

(B) Relationship

    Generally, the Department considers circumvention to be more likely 
when the manufacturer/exporter of the parts or components is related to 
the party completing or assembling merchandise in the United States 
using such imported parts or components. See, e.g., Granular 
Polytetrafluoroethylene Resin from Italy, Final Affirmative 
Determination of Circumvention of Antidumping Duty Order, 58 FR 26100 
(April 30, 1993).
    Camesa Inc., which imports the strand at issue and finishes it into 
steel wire rope in the United States, is a wholly-owned subsidiary of 
Grupo Camesa, the Mexican manufacturer and exporter of the strand (see 
Camesa submission of December 20, 1993, page one). Since all of Camesa 
Inc.'s purchases of strand during the POI were from Grupo Camesa, these 
purchases are from a related party within the meaning of section 
773(e)(4) of the Tariff Act. Accordingly, the relationship between 
Grupo Camesa and Camesa Inc. would make it more likely that 
circumvention of the antidumping duty order may have occurred during 
the POI.

(C) Increase in Imports of Components

    Generally, the Department considers circumvention to be more likely 
when imports of parts and components which are used in the production 
of merchandise subject to the order have increased after issuance of 
the antidumping duty order. The Department reviewed Camesa's imports of 
strand after the issuance of the order, and compared these imports to 
those prior to the order.
    We note that Camesa's imports steadily increased after issuance of 
the order through the end of the POI (see Camesa submission of December 
20, 1993, Attachment Five). This pattern of imports of strand from 
Mexico indicates that circumvention of the order on steel wire rope may 
have occurred during the POI.
Affirmative Preliminary Determination of Circumvention
    After consideration of all the factors discussed above, the 
Department preliminarily determines that circumvention of the 
antidumping duty order on steel wire rope from Mexico has occurred 
within the meaning of section 781(a) of the Tariff Act.
    We base this determination on the following: First, the merchandise 
finished at Camesa Inc. and sold in the United States is of the same 
class or kind of merchandise as that covered by the order and is 
completed from merchandise produced in the order country. Second, on 
the basis of BIA, the Department preliminarily determines that the 
difference between the value of the steel wire rope sold in the United 
States and the value of the strand used in the production of steel wire 
rope is small within the meaning of section 781(a) of the Tariff Act. 
Third, Camesa's imports into the United States of strand from Mexico 
increased during the POI, while Camesa's imports into the United States 
of wire rope from Mexico ceased after the Department issued the 
affirmative preliminary determination of sales at less than fair value 
of steel wire rope from Mexico. Finally, Camesa Inc. is a wholly-owned 
subsidiary of Grupo Camesa. Thus, the pattern of trade, relationship 
between Grupo Camesa and Camesa Inc., and level of imports into the 
United States support a finding of circumvention of the antidumping 
duty order.
    Based on this affirmative preliminary determination of 
circumvention, we have preliminarily determined that strand, as defined 
above, falls within the scope of the antidumping duty order on steel 
wire rope from Mexico, pursuant to section 781(a)(1) of the Tariff Act.
Suspension of Liquidation
    In accordance with section 773(d) of Tariff Act, the Department is 
directing the U.S. Customs Service to suspend liquidation of all 
entries of stranded wire from Mexico having a lay or twist of not more 
than 1 revolution for a length equal to the strand diameter multiplied 
by 8.5, that are entered, or withdrawn from warehouse, for consumption 
on or after the date of publication of this notice in the Federal 
Register.
    The merchandise subject to suspension of liquidation is wire strand 
of the kind used in the production of steel wire rope, as defined in 
the ``Scope of the Anticircumvention Inquiry'' section of this notice. 
The U.S. Customs Service shall require a cash deposit or posting of 
bond in the amount of 111.68 percent. This suspension of liquidation 
will remain in effect until further notice.
Notification of the International Trade Commission
    The Department, consistent with section 781(e) of the Tariff Act, 
will notify the ITC of this preliminary determination to include the 
merchandise subject to this inquiry within the antidumping duty order 
on steel wire rope from Mexico. Pursuant to section 781(e) of the 
Tariff Act, the ITC may request consultations concerning the 
Department's proposed inclusion of the subject merchandise. If, after 
consultations, the ITC believes that a significant injury issue is 
presented by the proposed inclusion, the ITC may provide written advice 
to the Department. In such a case, the ITC will have 60 days to provide 
written advice to the Department.
Public Comment
    Interested parties may request disclosure within 5 days of the date 
of publication of this determination, and may request a hearing within 
10 days of publication. Case briefs and/or written comments from 
interested parties may be submitted no later than 30 days after the 
date of publication of this notice. Rebuttal briefs and rebuttals to 
comments, limited to issues raised in those briefs or comments, may be 
filed no later than 37 days after publication of this notice. Any 
hearing, if requested, will be held 44 days after publication of this 
notice. The Department will publish the final determination with 
respect to the circumvention inquiry, including the results of its 
analysis of any written comments.
    This preliminary affirmative circumvention determination is in 
accordance with section 781(a) of the Tariff Act and 19 CFR 353.29(e).

    Dated: May 19, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-12798 Filed 5-24-94; 8:45 am]
BILLING CODE 3510-DS-P