[Federal Register Volume 62, Number 112 (Wednesday, June 11, 1997)]
[Notices]
[Pages 31958-31963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15291]



[[Page 31957]]

_______________________________________________________________________

Part V





Department of Commerce





_______________________________________________________________________



International Trade Administration



_______________________________________________________________________



Preliminary Determination of Sales at Less Than Fair Value; Certain 
Cut-to-Length Carbon Steel Plate from Ukraine; Notice



Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination; Certain Cut-to-Length Carbon Steel 
Plate from South Africa; Notice



Preliminary Determination of Sales at Less Than Fair Value; Certain 
Cut-to-Length Carbon Steel Plate from the Russian Federation; Notice



Preliminary Determination of Sales at Less Than Fair Value; Certain 
Cut-to-Length Carbon Steel Plate from the People's Republic of China; 
Notice

  Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / 
Notices  

[[Page 31958]]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-823-808]


Preliminary Determination of Sales at Less Than Fair Value; 
Certain Cut-to-Length Carbon Steel Plate from Ukraine

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

ACTION: Notice of preliminary determination of Sales at Less Than Fair 
Value.

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EFFECTIVE DATE: June 11, 1997.

FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan, Eugenia Chu, or Yury 
Beyzarov, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-0193, (202) 482-3964, or 
(202) 482-2243, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Rounds Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as codified at 19 CFR part 353 (April 1, 1996).

Preliminary Determination

    We determine preliminarily that certain cut-to-length carbon steel 
plate from Ukraine is being, or is likely to be, sold in the United 
States at less than fair value (LTFV), as provided in section 733 of 
the Act. The estimated margins are shown in the ``Suspension of 
Liquidation'' section of this notice.

Case History

    Since the initiation of this investigation (61 FR 64051, December 
3, 1996), the following events have occurred:
    On December 19, 1996, the United States International Trade 
Commission (ITC) issued an affirmative preliminary determination in 
this case (see ITC Investigations Nos. 731-TA-753-756). The ITC found 
that there is a reasonable indication that an industry in the United 
States is threatened with material injury by reason of imports from 
Ukraine of certain cut-to-length carbon steel plate.
    The Department issued its antidumping questionnaires to the Embassy 
of Ukraine on December 20, 1996, and requested the Embassy to forward 
the documents to all Ukrainian producers/exporters of certain cut-to-
length carbon steel plate, as well as to manufacturers who produced the 
subject merchandise for companies who were engaged in exporting subject 
merchandise to the United States during the period of investigation. We 
requested the Embassy to inform these companies that they must respond 
by the due dates. We also sent courtesy copies to the companies whose 
names and complete addresses had been identified in the petition.
    On January 10, 1997, the Department conducted a questionnaire 
presentation in Kiev, Ukraine. Attending the presentation were 
officials from the Ukrainian Ministry of Foreign Economic Relations, 
the Ministry of Industry, and potential producers/exporters of carbon 
steel plate.
    Also on January 10, 1997, Geneva Steel Company and Gulf States 
Steel Company (petitioners), alleged that critical circumstances exist 
with respect to imports of certain cut-to-length carbon steel plate 
from Ukraine. This issue is addressed in the ``Preliminary 
Determination of Critical Circumstances'' section of this notice.
    On February 6, 1997, the Department provided interested parties 
with the opportunity to submit published, publicly available 
information for the Department to consider when valuing the factors of 
production and for surrogate country selection. We received comments 
from interested parties on February 27, 1997.
    In February and March 1997, three Ukrainian companies submitted 
responses to sections A, C, and D of the questionnaire. These companies 
are: (1) Alchevsk Iron and Steel Works (Alchevsk); (2) Azovstal Iron 
and Steel Works (Azovstal); and (3) Ilyich Iron and Steel Works 
(Ilyich). All three are Ukrainian producers/exporters of subject 
merchandise. We issued supplemental questionnaires to these respondent 
companies on March 7, 1997.
    After receiving complete questionnaire responses from the three 
Ukrainian companies on April 4, 7, and 11, 1997, we determined that one 
of the responding companies, Alchevsk, did not sell subject merchandise 
to the United States during the POI. Therefore, since Alchevsk is not a 
respondent, we need not reach the issue of whether it is entitled to a 
separate rate. For more details, see Treatment of Sales Outside the POI 
Memorandum, dated May 30, 1997.
    Both Azovstal and Ilyich reported that they sold all subject 
merchandise through trading companies. In light of this fact, the 
Department concluded that clarification was required as to whether 
these resellers sold additional subject merchandise (unreported by the 
respondents) to the United States. Therefore, in March 1997, we also 
issued trading company questionnaires to respondents' resellers. We 
received responses in March and April 1997. These responses supported 
the information submitted by Azovstal and Ilyich regarding their total 
quantity of sales made to the United States through the trading 
companies.
    Also on March 25, 1997, in response to the Ukrainian government's 
comments, dated February 13, 1997, on Ukraine's nonmarket economy (NME) 
status, the Department issued the Ukrainian government a questionnaire 
to clarify whether Ukraine's NME status should be revoked. We received 
these responses on May 1, 1997. This issue is addressed in the 
``Nonmarket Economy Country Status'' section of this notice.
    Except for the companies identified above, none of the other 
companies served with a questionnaire responded to the Department's 
original questionnaire.
    On April 15, 1997, petitioners submitted a request that the scope 
of their petitions be amended to include three items--plate in coil; 
plate made to carbon plate specifications regardless of alloy content; 
and plate sold to nominal plate thicknesses whose actual thickness is 
slightly less than the thickness of plate but within specified 
thickness tolerances. With respect to plate in coil, petitioners 
maintain that this product has essentially the same physical 
characteristics and end uses as cut-to-length plate. Petitioners 
further claim that a post-initiation shift has occurred in the pattern 
of trade from cut-to-length plate to plate in coil form, and that such 
a development indicates that any eventual order on cut-to-length plate 
will be susceptible to circumvention. Petitioners submitted additional 
information on May 9, 1997. Respondents submitted extensive rebuttal 
comments on April 25, 1997, and May 30, 1997.
    Because of the very recent submission of arguments on these complex 
and technical subjects, we were unable to fully analyze all of the 
relevant information on the record prior to this preliminary 
determination. In order to fully examine petitioners' claims, we intend 
to carefully examine all evidence and argument on the record regarding 
this matter and issue a decision as soon as possible.

[[Page 31959]]

    On April 30, 1997 (62 FR 23433) we further postponed the 
preliminary determination until not later than June 3, 1997.

Scope of the Investigation

    The products covered by this investigation 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 this petition 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 investigation is dispositive.

Period of Investigation

    The period of investigation (POI) is April 1, 1996 through 
September 30, 1996.

Nonmarket Economy Country Status

    The Department has treated Ukraine as a nonmarket economy country 
(NME) in all past antidumping investigations and administrative reviews 
(see, e.g., Final Determination of Sales at Less Than Fair Value: 
Ferrosilicon From Kazakhstan and Ukraine, 58 FR 13050 (March 9, 1993); 
Final Determination of Sales at Less Than Fair Value: Silicomanganese 
From Ukraine, 59 FR 62711 (December 6, 1994); and Final Determination 
of Sales at Less Than Fair Value: Pure Magnesium From Ukraine, 60 FR 
16432 (March 30, 1995)). A designation as an NME remains in effect 
until it is revoked by the Department (see section 771(18)(C) of the 
Act). The Government of Ukraine has requested that the Department 
examine Ukraine's designation as an NME in this investigation. The 
Department is currently reviewing all information submitted by the 
Ukrainian government and will take into consideration the comments of 
all interested parties. However, for this preliminary determination, 
the Department will continue to treat Ukraine as an NME.

Surrogate Country

    When the Department is investigating imports from an NME, section 
773(c) of the Act directs the Department in most circumstances to base 
normal value (NV) on the NME producer's factors of production, valued 
in a surrogate market-economy country or countries considered 
appropriate by the Department. In accordance with section 773(c)(4), 
the Department, in valuing the factors of production, shall utilize, to 
the extent possible, the prices or costs of factors of production in 
one or more market-economy countries that are comparable in terms of 
economic development to the NME country and are significant producers 
of comparable merchandise. The sources of individual factor prices are 
discussed under the NV section below.
    The Department has determined that Tunisia, Peru, Poland, 
Venezuela, Brazil, South Africa, and Turkey are countries comparable to 
Ukraine in terms of overall economic development. See Policy 
Memorandum, dated January 29, 1997.
    According to the available information on the record, we have 
determined that Brazil is an appropriate surrogate because it is at a 
comparable level of economic development and is a significant producer 
of comparable merchandise. Furthermore, there is a wide array of 
publicly available information for Brazil. Accordingly, we have 
calculated NV using Brazilian prices to value the Ukrainian producers' 
factors of production, when available and where appropriate. We have 
obtained and relied upon publicly available information wherever 
possible.

Separate Rates

    The Department presumes that a single dumping margin is appropriate 
for all exporters in a non-market economy country. The Department may, 
however, consider requests for a separate rate from an individual 
exporter. See Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 
2, 1994). Each of the participating respondent exporters has requested 
a separate, company-specific rate. During the POI, both Azovstal and 
Ilyich were owned by leaseholders' organizations.
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test arising out of the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991) (Sparklers). 
Under the separate rates criteria, the Department assigns separate 
rates in nonmarket economy cases only if respondents can demonstrate 
the absence of both de jure and de facto governmental control over 
export activities. For a complete analysis of separate rates, see 
Separate Rates Memorandum, dated June 3, 1997.

1. Absence of De Jure Control

    An individual company may be considered for separates rates if it 
meets the following de jure criteria: (1) An absence of restrictive 
stipulations associated with an individual exporter's business and 
export licenses; (2) any legislative enactments decentralizing control 
of companies; and (3) any other formal measures by the government 
decentralizing control of companies. The respondents have placed on the 
administrative record a number of submissions to demonstrate absence of 
de jure control. These documents include laws, regulations, and 
provisions enacted by the central government of Ukraine, which 
demonstrate a significant degree of deregulation of Ukrainian business 
activity, as well as deregulation of Ukrainian export activity.
    Broadly speaking, the evidence on the record indicates that the 
Government of Ukraine has instituted wide-ranging legal reforms toward 
about a more market-based economy. To do so, the government has 
attempted to devolve de jure governmental control over some state-owned 
enterprises through the privatization process and most business 
activities of non-state-owned enterprises. Because the government has 
now created a right of ownership of business enterprises for private 
persons and collectives, leaseholding societies, such as Azovstal and 
Ilyich, formerly state-owned and operated, are now

[[Page 31960]]

distinct legal entities. In general, this ownership right allows non-
state-owned business enterprises to freely engage in economic activity, 
negotiate and sign contracts, and independently develop business plans. 
Collectives, like the leaseholding societies of Azovstal and Ilyich, 
can independently select management through elections by the workers 
collective and can exercise control and direction over the general 
director through a contract between the enterprise and the general 
director. Enterprises can have their own bank account, and, after 
taxes, it appears that non-state-owned enterprises can keep the profits 
from their sales, and engage in foreign economic activity, generally, 
without government interference. Although certain categories of goods 
are subject to mandatory export controls, including registration of 
export contracts and obligatory minimum prices, respondents' shipments 
of subject merchandise to the United States during the POI were not 
subject to mandatory pricing. Although the companies indicated they 
must register their export contracts, it appears to have been more 
geared to monitoring/statistical purposes.

2. Absence of De Facto Control

    The Department considers four factors in evaluating whether each 
respondent is subject to de facto governmental control of its export 
functions: (1) Whether the export prices (``EP'') are set by or subject 
to the approval of a governmental authority; (2) whether the respondent 
has authority to negotiate and sign contracts and other agreements; (3) 
whether the respondent has autonomy from the government in making 
decisions regarding the selection of management; and (4) whether the 
respondent retains the proceeds of its export sales and makes 
independent decisions regarding disposition of profits or financing of 
losses.
    Each respondent exporter has asserted, and supported on the record, 
the following: (1) It sets its own export prices; (2) it negotiates 
contracts without guidance from any governmental bodies; (3) it makes 
its own personnel decisions with regard to selection of management 
through elections by the members of the leaseholding societies, and the 
General Director and his appointed Deputies have authority to negotiate 
and enter into contracts on behalf of the enterprise; and (4) it has 
separate bank accounts and retains the proceeds of its export sales 
(although 50 percent of foreign currency earnings must be converted 
into Ukrainian currency), uses profits according to its business needs, 
and has the authority to sell its assets and to obtain loans. In 
addition, respondents' questionnaire responses indicate that company-
specific pricing during the POI does not suggest coordination among 
exporters.
    Thus, it appears that in fact the operation of these laws did 
provide Azovstal and Ilyich the ability to protect their rights to 
autonomy in regard to the actual negotiation of export prices, 
retention and disposition of profits, selection of management and 
setting of labor rates, and negotiation of contracts, including export 
contracts. This information supports a preliminary finding that there 
is a de facto absence of governmental control of the export functions 
of these companies.
    Consequently, we determine preliminarily that both of the 
participating producers/exporters meet the criteria for application of 
separate rates.

Ukraine-Wide Rate

    U.S. import statistics indicate that the total quantity and value 
of U.S. imports of certain cut-to-length carbon steel plate from 
Ukraine is greater than the total quantity and value of steel plate 
reported by all Ukrainian companies that submitted responses. Given 
this discrepancy, we conclude that not all exporters of Ukrainian 
certain cut-to-length carbon steel plate responded to our 
questionnaire. Accordingly, we are applying a single antidumping 
deposit rate--the Ukraine-wide rate--to all exporters in Ukraine (other 
than the two named above as receiving separate rates), based on our 
presumption that those respondents who failed to respond constitute a 
single enterprise, and are under common control by the Ukraine 
government. See, e.g., Final Determination of Sales at Less Than Fair 
Value: Bicycles from the People's Republic of China, 61 FR 19026 (April 
30, 1996).
    This Ukraine-wide antidumping rate is based on adverse facts 
available. Section 776(a)(2) of the Act provides that ``if an 
interested party or any other person--(A) withholds information that 
has been requested by the administering authority; (B) fails to provide 
such information by the deadlines for the submission of the information 
or in the form and manner requested, subject to subsections (c)(1) and 
(e) of section 782; (C) significantly impedes a proceeding under this 
title; or (D) provides such information but the information cannot be 
verified as provided in section 782(i), the administering authority * * 
* shall, subject to section 782(d), use the facts otherwise available 
in reaching the applicable determination under this title.''
    In addition, section 776(b) of the Act provides that, if the 
Department finds that an interested party ``has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information,'' the Department may use information that is adverse to 
the interests of that party as the facts otherwise available. The 
statute also provides that such an adverse inference may be based on 
secondary information, including the information drawn from the 
petition.
    As discussed above, all Ukrainian exporters that do not qualify for 
a separate rate are treated as a single enterprise. Because some 
exporters of the single enterprise failed to respond to the 
Department's requests for information, that single enterprise is 
considered to be uncooperative. In such situations, the Department 
generally selects as total facts available either the higher of the 
average of the margin from the petition or the highest rate calculated 
for a respondent in the proceeding. In the present case, the average 
margin in the petition is higher than the calculated rate. Accordingly, 
the Department has based the Ukraine-wide rate on information in the 
petition. In this case, the average petition rate is 237.91 percent.
    Section 776(c) of the Act provides that where the Department relies 
on ``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonable at the Department's disposal. The Statement of 
Administrative Action (SAA), accompanying the URAA clarifies that the 
petition is ``secondary information'' and that ``corroborate'' means to 
determine that the information used has probative value. See SAA at 
870.
    In accordance with section 776(c) of the Act, we corroborated the 
margins in the petition to the extent practicable. The information 
contained in the petition shows that petitioners calculated export 
price based on two methods: (1) The import values declared to the U.S. 
Customs Service; and (2) an average export price derived from actual 
U.S. selling prices known to petitioners. We compared the starting 
prices used by petitioners less the importer mark-ups against prices 
derived from U.S. import statistics and found that the two sets of 
prices were consistent. We also compared the movement charges used in 
the petition with the surrogate values used by the Department in its 
margin calculations and found them to be consistent.

[[Page 31961]]

    The information in the petition with respect to the normal value 
(NV) is based on factors of production used by the petitioners in the 
production of steel plate. Petitioners submitted usage amounts for 
materials, labor and energy, adjusted for known differences in 
production efficiencies. Petitioners submitted three cost models in the 
petition: (1) Basic Oxygen Furnace (BOF) Cost Model; (2) Open-Hearth 
Furnace Cost Model; and (3) Weighted Average Normal Value of the BOF 
and Open-Hearth methods to account for differences between the 
production processes of petitioners and potential respondents.
    The margins in the petition ranged from 201.61 to 274.82 percent 
obtained by comparing the normal values to the export price developed 
from customs values and to export prices developed from actual U.S. 
price quotes. For each method, petitioners submitted estimated dumping 
margins for the BOF method, the open-hearth method and a weighted 
average of the two. See Corroboration Memorandum, dated June 3, 1997.

Fair Value Comparisons

    To determine whether certain cut-to-length carbon steel plate from 
Ukraine sold to the United States by the Ukrainian exporters receiving 
separate rates was made at less than fair value, we compared the EP to 
the NV, as specified in the ``Export Price'' and ``Normal Value'' 
sections of this notice.

Export Price

    For both Azovstal and Ilyich, we calculated EP in accordance with 
section 772(a) of the Act, because the subject merchandise was sold 
directly to the first unaffiliated purchaser in the United States prior 
to importation and constructed export price (CEP) methodology was not 
otherwise indicated. In accordance with section 777A(d)(1)(A)(i) of the 
Act, we compared POI-wide weighted-average EPs to the product-specific 
average normal value.
    We made company-specific adjustments as follows:

1. Azovstal

    We calculated EP based on packed, FOB or CPT prices to the port of 
loading on Ukrainian territory. We made deductions from the starting 
price, where appropriate, for brokerage and handling. However, because 
these services were provided by the Ukrainian port facility, these 
services were assigned a surrogate value where available from publicly 
available published data from Brazil, the surrogate country which we 
are using to value factors of production. See Factors Memorandum, dated 
June 3, 1997.

2. Ilyich

    We calculated EP based on packed, FOB prices to unaffiliated 
purchasers in the United States. We made deductions from the starting 
price, where appropriate, for brokerage and handling. However, because 
these services were provided by the Ukrainian port facility, these 
services were assigned a surrogate value where available from Brazilian 
publicly available published data.

Normal Value

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by the factories in the Ukraine 
which produced the carbon steel plate sold by the two respondents. We 
valued all the input factors using publicly available information as 
discussed in the Surrogate Country section of this notice.

Factor Valuations

    The selection of the surrogate values was based on the quality and 
contemporaneity of the data. Where possible, we attempted to value 
material inputs on the basis of tax-exclusive domestic prices in the 
surrogate country. Where we were not able to rely on domestic prices, 
we used import prices to value factors. As appropriate, we adjusted 
input prices to make them delivered prices. For those values not 
contemporaneous with the POI, we adjusted for inflation using wholesale 
price indices or, in the case of labor rates, consumer price indices, 
published in the International Monetary Fund's International Financial 
Statistics. For a complete analysis of surrogate values, see Factors 
Memorandum, dated June 3, 1997.
    To value coal, coke, anthracite, ferro alloys, aluminum, pellets, 
ferro-manganese, lime, black oil, and scrap (not all materials were 
used for both companies) we used public information from the latest 
data published by the United Nations for 1996 (Commodity Trade 
Statistics 1994, 3 Brazil Rev. 1995, at 19). For iron, we used 
information in a 1996 Brazilian publication, Siderurigia no Mundo. For 
manganese ore, we relied on public information from the financial 
statements of Usinas Sidergicas de Minas Gerais S. and Compania 
Siderurgica de Tubarao, two Brazilian steel companies. For limestone, 
we used information from Commodity Trade Statistics 1993, Brazil Rev. 
3, United Nations, 1994.
    For natural gas, we relied on public information reported in the 
Brazilian publication of Diario Oficial No. 180, September 27, 1995. 
For electricity, we relied upon public information from Revista 
Energetica, Year 19, No. 1, Jan-Apr 1995.
    To value skilled labor, we used the County Reports on Human Rights 
Practices for 1996, from the U.S. Department of State. For unskilled 
labor, we relied on data documented for unskilled labor obtained from a 
U.S. Department of Commerce cable dated October 1994. To value 
overhead, SG&A, and profit, we relied on financial statements of Usinas 
Sidergicas de Minas Gerais S. and Compania Siderurgica de Tubarao, two 
Brazilian steel companies. To value brokerage, we relied on public data 
from Case No. A-351-817, Cut-to-Length Plate from Brazil, Usiminas, 
Section C Response at Exh. 6, dated November 21, 1996.

Preliminary Determination of Critical Circumstances

    On January 10, 1997, the petitioners alleged that there is a 
reasonable basis to believe or suspect that critical circumstances 
exist with respect to imports of certain cut-to-length carbon steel 
plate. In accordance with 19 C.F.R. 353.16(b)(2)(i) (1996), since these 
allegations were filed earlier than the deadline for the Department's 
preliminary determination, we must issue our preliminary critical 
circumstances determinations not later than the preliminary 
determination.
    Section 733(e)(1) of the Act provides that if a petitioner alleges 
critical circumstances, the Department will determine whether there is 
a reasonable basis to believe or suspect that: (A)(i) there is a 
history of dumping and material injury by reason of dumped imports in 
the United States or elsewhere of the subject merchandise, or (ii) the 
person by whom, or for whose account, the merchandise was imported knew 
or should have known that the exporter was selling the subject 
merchandise at less than its fair value and that there was likely to be 
material injury by reason of such sales, and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period.
    The statute and the Statement of Administrative Action which 
accompanies the Uruguay Round Agreements Act (SAA) are silent as to how 
we are to make a finding that there was knowledge that there was likely 
to be material injury. Therefore, Congress has left the method of 
implementing this provision to the Department's discretion.
    In determining whether there is a reasonable basis to believe or 
suspect

[[Page 31962]]

that an importer knew or should have known that the exporter was 
selling the plate at less than fair value, the Department normally 
considers margins of 15 percent or more sufficient to impute knowledge 
of dumping for constructed export price (CEP) sales, and margins of 25 
percent or more for export price (EP) sales. See, e.g., Preliminary 
Critical Circumstances Determination: Honey from the People's Republic 
of China (PRC), 60 FR 29824 (June 6, 1995) (Honey). Since the company 
specific margins for EP sales in our preliminary determination for 
carbon steel plate are greater than 25 percent for Azovstal and Ilyich, 
we have imputed knowledge of dumping.
    In determining whether there is a reasonable basis to believe or 
suspect that an importer knew or should have known that there was 
likely to be material injury by reason of dumped imports, the 
Department normally will look to the preliminary injury determination 
of the ITC. If the ITC finds a reasonable indication of present 
material injury to the relevant U.S. industry, the Department will 
determine that a reasonable basis exists to impute importer knowledge 
that there was likely to be material injury by reason of dumped imports 
during the critical circumstances period--the 90-day period beginning 
with the initiation of the investigation (see 19 CFR 353.16(g)). If, as 
in this case, the ITC preliminarily finds threat of material injury 
(See Cut-to-Length Carbon Steel Plate from China, Russia, South Africa, 
and Ukraine, U.S. International Trade Commission, December 1996), the 
Department will also consider the extent of the increase in the volume 
of imports of the subject merchandise during the critical circumstances 
period and the magnitude of the margins in determining whether a 
reasonable basis exists to impute knowledge that material injury was 
likely.
    In this case, imports of Ukrainian plate increased 45 percent in 
the three months following the initiation of the investigation when 
compared to the three months immediately preceding initiation, or three 
times the level of increase needed to find ``massive imports'' during 
the same period (see below). Furthermore, we have preliminarily found 
margins of 99.59 percent for Azovstal and 176.76 percent for Ilyich.
    Based on the ITC's preliminary determination of threat of injury, 
the increase in imports noted above, and the high preliminary margins, 
the Department determines that there is a reasonable basis to believe 
or suspect that the importer knew or should have known that there was 
likely to be material injury by means of sales of the subject 
merchandise at less than fair value.
    To determine whether imports were massive over a relatively short 
time period, the Department typically compares the import volume of the 
subject merchandise for the three months immediately preceding and 
following the initiation of the proceeding. See 19 CFR 353.16(g). 
Pursuant to 19 CFR 353.16(f)(2), the Department will consider an 
increase of 15 percent or more in the imports of the subject 
merchandise over the relevant period to be massive.
    As noted, imports of the subject merchandise increased 45 percent 
during the relevant period, and thus we determine that imports have 
been massive.
    Thus, because we determine that there is a reasonable basis to 
believe or suspect that the importer knew or should have known that 
Ukrainian exporters were selling the subject merchandise at less than 
its fair value and that there was likely to be material injury by 
reason of such sales, and that there have been massive imports of the 
subject merchandise over a relatively short time period, we 
preliminarily determine that critical circumstances exist for Avostal 
and Ilyich.
    For companies subject to the Ukraine-wide rate (i.e., companies 
which did not respond to the Department's questionnaire), we are 
imputing knowledge based on the Ukraine-wide rate, and determine, based 
on facts available, that there were massive imports of certain cut-to-
length carbon steel plate by companies that did not respond to the 
Department's questionnaire. Therefore, we preliminarily determine that 
critical circumstances exist with regard to these companies.
    We find that critical circumstances exist for cut-to-length carbon 
steel plate sales by all Ukrainian exporters.

Verification

    As provided in section 782(i) of the Act, we will verify the 
information used in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports of subject from 
Ukraine, that are entered, or withdrawn from warehouse, for consumption 
on or after the date ninety days prior to the date of publication of 
this notice in the Federal Register. We will instruct Customs Service 
to require a cash deposit or the posting of a bond equal to the 
weighted-average amount by which the normal value exceeds the EP, as 
indicated below. These suspension of liquidation instructions will 
remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted- 
                                                               average  
               Manufacturer/producer/exporter                   margin  
                                                              percentage
------------------------------------------------------------------------
Azovstal...................................................        99.59
Ilyich.....................................................       176.76
Ukraine-wide rate..........................................       237.91
------------------------------------------------------------------------

Ukraine-Wide Rate

    A Ukraine-wide rate has been assigned to certain cut-to-length 
carbon steel plate based on the average margin contained in the 
petition, as amended by the Department. The Ukraine-wide rate applies 
to all entries of subject merchandise except for entries from 
exporters/producers that are identified individually above.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether the domestic industry in the United States is materially 
injured, or threatened with material injury, by reasons of imports, or 
sales (or the likelihood of sales) for importation, of the subject 
merchandise.

Public Comment

    In accordance with 19 CFR 353.38 (1996), case briefs or other 
written comments in at least ten copies must be submitted to the 
Assistant Secretary for Import Administration no later than 50 days 
after the publication of this preliminary determination, and rebuttal 
briefs, no later than five days after the filing of case briefs. A list 
of authorities used and a summary of arguments made in the briefs 
should accompany these briefs. Such summary should be limited to five 
pages total, including footnotes. We will hold a public hearing, if 
requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. The hearing will be held 
at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue, N.W., Washington, DC 20230, time, date, and room to be 
determined. Parties should confirm by telephone the time, date, and 
place of the hearing 48 hours before the scheduled time.

[[Page 31963]]

    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within ten days of the publication of this notice. Requests 
should contain: (1) The party's name, address, and telephone number; 
(2) the number of participants; and (3) a list of the issues to be 
discussed. In accordance with 19 CFR 353.38(b)(1996), oral 
presentations will be limited to issues raised in the briefs. If this 
investigation proceeds normally, we will make our final determination 
by August 18, 1997.
    This determination is published pursuant to section 777(i) of the 
Act.

    Dated: June 3, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-15291 Filed 6-10-97; 8:45 am]
BILLING CODE 3510-DS-P