[Federal Register Volume 63, Number 35 (Monday, February 23, 1998)]
[Notices]
[Pages 8953-8957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4541]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-428-822]
Notice of Final Determination of Sales at Less Than Fair Value:
Steel Wire Rod From Germany
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: February 23, 1998.
FOR FURTHER INFORMATION CONTACT: Judith Wey Rudman or John Brinkmann,
Office of AD/CVD Enforcement II, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0192 or (202) 482-5288.
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (``the Act''), are references to the provisions
effective January 1, 1995, the effective date of the amendments made to
the Act by the Uruguay Round Agreements Act (``URAA''). In addition,
unless otherwise indicated, all citations to the Department's
regulations are references to the provisions codified at 19 CFR Part
353 (April 1997). Although the Department's new regulations, codified
at 19 CFR 351 (62 FR 27296; May 19, 1997), do not govern these
proceedings, citations to those regulations are provided, where
appropriate, to explain current departmental practice.
Final Determination
We determine that steel wire rod from Germany is being sold in the
United States at less than fair value (``LTFV''), as provided in
section 735 of the Act. The estimated margins of sales at LTFV are
shown in the ``Continuation of Suspension of Liquidation'' section of
this notice.
Case History
Since the preliminary determination in this investigation on
September 24, 1997, (62 FR 51577, October 1, 1997) (``Notice of
Preliminary Determination''), the following events have occurred:
On September 29, 1997, we issued a second supplemental request for
information covering all sections of the questionnaire to Ispat
Hamburger Stahlwerke GmbH (``IHSW''), the only company to respond to
the Department's original antidumping duty questionnaire. IHSW
submitted its response to this supplemental questionnaire, including
revised United States, home market, cost of production (COP), and
constructed value (CV) databases, on October 14, 1997. At the
Department's request, IHSW submitted clarifications of its response on
October 23 and 24, 1997.
On October 14, 1997, Connecticut Steel Group, Co-Steel Raritan, GS
Industries, Inc., Keystone Steel & Wire Co., North Star Steel Texas,
Inc., and Northwestern Steel & Wire Co. (collectively ``petitioners'')
informed the Department that IHSW's parent company had purchased two
units of Thyssen Stahl AG (``Thyssen'') and requested that the
Department collapse IHSW and Thyssen when determining the dumping
margins for these companies (see Comment 3 below).
The Department conducted verifications of IHSW's cost and sales
information in November 1997, in Hamburg, Germany. The Department
issued the sales and cost verification reports on December 16 and 18,
1997, respectively, citing numerous deficiencies in IHSW's cost and
sales information. Because it seemed at the time that the deficiencies
could be corrected and that we would be able to confirm that
corrections made to the databases were done completely and accurately,
the Department allowed IHSW a final opportunity to submit revised cost
and sales databases. On December 19, 1997, the Department transmitted
to IHSW a list of specific revisions to be made to its databases (see
December 19, 1997, Memorandum to Gary Taverman). IHSW submitted its
revised response on January 9, 1998. On
[[Page 8954]]
January 12, 1998, IHSW notified the Department that there were certain
errors in the January 9 submission.
Petitioners, IHSW, and Saarstahl AG (``Saarstahl'') submitted case
briefs on January 15, 1998. Petitioners and IHSW submitted rebuttal
briefs on January 21, 1998.
Scope of Investigation
The products covered by this investigation are certain hot-rolled
carbon steel and alloy steel products, in coils, of approximately round
cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 inch),
inclusive, in solid cross-sectional diameter. Specifically excluded are
steel products possessing the above noted physical characteristics and
meeting the Harmonized Tariff Schedule of the United States (HTSUS)
definitions for (a) stainless steel; (b) tool steel; (c) high nickel
steel; (d) ball bearing steel; (e) free machining steel that contains
by weight 0.03 percent or more of lead, 0.05 percent or more of
bismuth, 0.08 percent or more of sulfur, more than 0.4 percent of
phosphorus, more than 0.05 percent of selenium, and/or more than 0.01
percent of tellurium; or (f) concrete reinforcing bars and rods.
The following products are also excluded from the scope of this
investigation:
Coiled products 5.50 mm or less in true diameter with an
average partial decarburization per coil of no more than 70 microns in
depth, no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.68 percent; aluminum less
than or equal to 0.005 percent; phosphorous plus sulfur less than or
equal to 0.040 percent; maximum combined copper, nickel and chromium
content of 0.13 percent; and nitrogen less than or equal to 0.006
percent. This product is commonly referred to as ``Tire Cord Wire
Rod.''
Coiled products 7.9 to 18 mm in diameter, with a partial
decarburization of 75 microns or less in depth and seams no more than
75 microns in depth, containing 0.48 to 0.73 percent carbon by weight.
This product is commonly referred to as ``Valve Spring Quality Wire
Rod.''
Coiled products 11 mm to 12.5 mm in diameter, with an
average partial decarburization per coil of no more than 70 microns in
depth, no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.72 percent; manganese
0.50-1.10 percent; phosphorus less than or equal to 0.030 percent;
sulfur less than or equal to 0.035 percent; and silicon 0.10-0.35
percent. This product is free of injurious piping and undue
segregation. The use of this excluded product is to fulfill contracts
for the sale of Class III pipe wrap wire in conformity with ASTM
specification A648-95 and imports of this product must be accompanied
by such a declaration on the mill certificate and/or sales invoice.
This excluded product is commonly referred to as ``Semifinished Class
III Pipe Wrap Wire.''
The products under investigation are currently classifiable under
subheadings 7213.91.3000, 7213.91.4500, 7213.91.6000, 7213.99.0030,
7213.99.0090, 7227.20.0000, and 7227.90.6050 of the HTSUS. Although the
HTSUS subheadings are provided for convenience and customs purposes,
our written description of the scope of this investigation is
dispositive.
Exclusion of Pipe Wrap Wire
As stated in the Notice of Preliminary Determination, North
American Wire Products Corporation (NAW), an importer of the subject
merchandise from Germany, requested that the Department exclude steel
wire rod used to manufacture Class III pipe wrapping wire from the
scope of the investigations of steel wire rod from Canada, Germany,
Trinidad and Tobago, and Venezuela. On December 22, 1997, NAW submitted
to the Department a proposed exclusion definition. On December 30, 1997
and January 7, 1998, petitioners submitted letters concurring with the
definition of the scope exclusion and agreeing to the exclusion of this
product from the scope of the investigation. We have reviewed NAW's
request and petitioners' comments and have excluded steel wire rod for
manufacturing Class III pipe wrapping wire from the scope of the four
concurrent investigations (see Memorandum to Richard W. Moreland dated
January 9, 1998).
Period of Investigation
The period of investigation (``POI'') is January 1 through December
31, 1996.
Facts Available
At the preliminary determination, the Department found that
Brandenburg Elektrostahlwerk GmbH (``Brandenburg''), Saarstahl, and
Thyssen ``have clearly failed to cooperate to the best of their ability
in this investigation, as they have not responded to the Department's
antidumping questionnaire.'' See Notice of Preliminary Determination.
Accordingly, the Department based the antidumping rate for these
companies on facts otherwise available and assigned them the highest
margin from the petition (as adjusted by the Department), 153.10
percent.
With regard to IHSW, the Department found that ``despite the
detailed requests for supplemental information issued by the Department
and the extension of time granted to IHSW to file its responses, IHSW's
questionnaire responses remained seriously deficient.'' See Notice of
Preliminary Determination. In particular, IHSW's home market sales data
and cost of production information were so deficient as to render them
unreliable for conducting a proper LTFV analysis and sales-below-cost
test. Because of these deficiencies, the Department was unable to use
IHSW's responses to calculate a margin for the preliminary
determination of sales at less than fair value and therefore relied on
facts otherwise available. The Department stated that it would proceed
with the investigation and verify IHSW's information if IHSW cooperated
and provided ``complete and accurate'' information in response to a
supplemental questionnaire. We further stated that ``{i}f IHSW's
reported information verified, we will use such information in making
the final determination.''
As stated in the ``Case History'' section above, the Department
issued a second supplemental questionnaire to IHSW following the
preliminary determination and conducted verification of IHSW's revised
cost and sales information. During these verifications, numerous
inconsistencies were found when we compared IHSW's reported cost and
sales data to the company's records, as noted in the verification
reports (see the December 16 sales verification report, the December 18
cost verification report, and the Memorandum to Gary Taverman dated
December 19, 1997). After the verifications, the Department granted
IHSW a final opportunity to correct the deficiencies in its cost and
sales databases.
Despite allowing IHSW numerous opportunities to correct its
questionnaire responses, the cost and sales information submitted by
IHSW remains seriously deficient and unusable. The significant
deficiencies in the information submitted by IHSW include: (1) Failure
to calculate COP and CV in accordance with the Department's instruction
with respect to the weighting factor; (2) the multiple counting of
production quantities in deriving per unit COP; (3) failure to make
specific changes to identified errors in the coding of reported product
characteristics, resulting in the incorrect assignment of product
control numbers;
[[Page 8955]]
the impact is particularly significant in the U.S. sales database where
correcting the control numbers would affect 72 percent of the volume of
reported U.S. sales; and (4) numerous errors and inconsistencies in
IHSW's sales database which call into question the integrity of the
entire response. (For a more detailed discussion of the deficiencies in
the information IHSW has provided, see the February 13, 1998,
Memorandum to Richard W. Moreland.) Despite specific instructions from
the Department detailing what corrections should be made, IHSW's
January 9 response contained numerous errors in the COP and CV
databases. Without accurate COP and CV databases, we cannot perform a
reliable sales-below-cost test and LTFV analysis. Further, given IHSW's
repeated failure throughout the investigation to correct its
deficiencies and its failure to submit an accurate response on January
9, we cannot be certain that the problems with IHSW's responses are
limited to only those uncovered in our analysis of the January 9
submission.
Section 776(a)(2) of the Act provides that if an interested party
(1) withholds information that has been requested by the Department,
(2) fails to provide such information in a timely manner or in the form
or manner requested, (3) significantly impedes a determination under
the antidumping statute, or (4) provides such information but the
information cannot be verified, the Department shall use facts
otherwise available in reaching the applicable determination (subject
to subsections 782(d) and (e)). As detailed below, the Department has
determined that all four respondents have failed to cooperate to the
best of their ability in this investigation as defined under 776(a)(2)
and that the use of facts otherwise available is applicable.
IHSW's questionnaire responses constituted deficient submissions
within the meaning of section 782(d). Under these circumstances,
section 776(a) directs the Department to use facts available subject to
section 782(e). Section 782(e) provides that the Department shall not
decline to consider information that is submitted by an interested
party and is necessary to the determination, but does not meet all the
applicable requirements established by the Department, if--
(1) The information is submitted by the deadline established for
its submission,
(2) The information can be verified,
(3) The information is not so incomplete that it cannot serve as a
reliable basis for reaching the applicable determination,
(4) The interested party has demonstrated that it acted to the best
of its ability in providing the information and meeting the
requirements established by the Department with respect to the
information, and
(5) The information can be used without undue difficulties.
Thus, if any one of these criteria is not met, the Department may
decline to consider the information at issue in making its
determination. IHSW's information has arguably satisfied the first two
criteria. However, regarding the third criterion, whether the
information may serve as a ``reliable basis'' for the Department's
determination, as detailed above, IHSW's sales data and cost of
production information is so deficient as to render it unusable. In
particular, IHSW's failure to: (a) Correct those items on the December
19 list of required revisions completely and accurately; (b) submit the
accurate revised cost and sales databases in proper SAS format; and (c)
properly change the sales databases to reflect changes in the cost
database, calls into question the integrity of the entire January 9
submission. As to criterion (4), IHSW has not demonstrated that it
acted to the best of its ability in providing the requested information
because IHSW failed to comply with the Department's specific
instructions in the requests for information. Finally, as to criterion
(5), while the Department may be able to correct some of the errors in
IHSW's responses, this would be a difficult task involving significant
changes to IHSW's information, including the restructuring of many of
IHSW's product control numbers. To attempt to correct all of the errors
in IHSW's responses would be burdensome. Moreover, even if the
Department attempted to correct the responses, given the numerous
errors in IHSW's information on the record, we cannot be certain that
an accurate analysis could be conducted.
IHSW has failed to provide its sales and cost information in the
form and manner requested under the terms of sections 782(d) and (e) of
the Act. The information provided by IHSW is unreliable and inadequate
for the purpose of calculating a LTFV margin. Section 776(a) thus
requires the Department to use facts otherwise available in making its
final determination with respect to IHSW.
Section 776(b) provides that adverse inferences may be used for a
party that has failed to cooperate by not acting to the best of its
ability to comply with requests for information (see also the Statement
of Administrative Action (``SAA''), accompanying the URAA, H.R. Rep.
No. 316, 103rd Cong., 2d Sess. 870). As discussed above, Brandenburg,
IHSW, Saarstahl, and Thyssen have failed to act to the best of their
ability to comply with requests for information and, therefore, adverse
inferences are warranted with respect to all four companies. Consistent
with Department practice in cases where respondents refuse to
participate or provide seriously deficient information that precludes
the Department from conducting its LTFV analysis, as facts otherwise
available, we are basing their margins for the final determination on
information in the petition. As facts otherwise available, the
Department is continuing to assign to Brandenburg, Saarstahl, and
Thyssen, the companies that did not respond at all to the Department's
requests for information, the highest margin from the petition (as
adjusted by the Department), 153.10 percent. Since IHSW made some
effort to comply with the Department's requests for information, we are
continuing to assign IHSW a facts available margin based on a simple
average of the margins in the petition (as adjusted by the Department),
72.51 percent.
Section 776(c) provides that when the Department relies on
secondary information (e.g., the petition) as the facts otherwise
available, it must, to the extent practicable, corroborate that
information from independent sources that are reasonably at its
disposal. The Department reviewed the adequacy and accuracy of the
secondary information in the petition from which the margins were
calculated during our pre-initiation analysis of the petition, to the
extent appropriate information was available for this purpose, (e.g.,
import statistics, independent trade data, U.S. Bureau of Labor
Statistics, International Energy Agency). (See Notice of Preliminary
Determination and September 24, 1997, Memorandum to Richard W.
Moreland).
At the preliminary determination, the Department reexamined the
price information provided in the petition and found it to be of
probative value (see the September 24, 1997, Memorandum to Richard W.
Moreland). The parties did not comment on this issue. For purposes of
the final determination, absent information to the contrary, we find
that the information in the petition continues to be of probative
value.
All foreign manufacturers/exporters in this investigation are being
assigned dumping margins on the basis of facts otherwise available.
Section 735(c)(5) of the Act provides that where the dumping margins
established for all exporters and producers individually
[[Page 8956]]
investigated are determined entirely under section 776, the Department
``* * * may use any reasonable method to establish the estimated all-
others rate for exporters and producers not individually investigated,
including averaging the estimated weighted average dumping margins
determined for the exporters and producers individually investigated.''
This provision contemplates that we weight average the facts-available
margins to establish the all-others rate. Where the data is not
available to weight average the facts available rates, the SAA, at 873,
provides that we may use other reasonable methods. Inasmuch as we do
not have the data necessary to weight average the respondents' facts
available margins, we are continuing to base the all-others rate on a
simple average of the margins in the petition (as adjusted by the
Department), 72.51 percent.
Interested Party Comments
Comment 1. The Application of Facts Available to Saarstahl
Saarstahl contends that the Department should not use an adverse
inference in determining its antidumping margin. Saarstahl argues that
it has acted to the best of its ability to respond to the Department's
questionnaire, but that its financial situation has precluded it from
participating in this proceeding. Even if an adverse inference is made
in setting its margin, Saarstahl argues that the Department should use
the Saarstahl-specific lower margin information contained in the
petition rather than the 153.10% margin used in the preliminary
determination.
Petitioners contend that Saarstahl's argument that the Department
may not use the highest dumping margin alleged in the petition as
adverse facts available is directly contradicted by the statute and
Department precedent. Further, petitioners claim that factors such as
Saarstahl's financial condition are immaterial to the issue of whether
Saarstahl cooperated in this investigation (see, e.g., Final
Determination of Sales at Less than Fair Value: Large Newspaper
Printing Presses and Components Thereof, Whether Assembled or
Unassembled from Germany, 61 FR 38166, 38179 (July 23, 1996)).
Petitioners insist that the Department acted appropriately in assigning
the highest margin alleged in the petition to Saarstahl for the
preliminary determination and should use the same rate for the final
determination.
DOC Position. We disagree with Saarstahl's contention that it acted
to the best of its ability, given its financial hardship, to comply
with the Department's information requests. Under limited
circumstances, such as where a company immediately informs the
Department that it cannot comply with the Department's information
requests due to the liquidation of its assets, it may be appropriate
not to assign adverse facts available. However, where a respondent
continues to produce the subject merchandise but fails altogether to
provide information, we find that it has failed to act to the best of
its ability. As we explained in Certain Fresh Cut Flowers From
Colombia: Preliminary Results and Partial Rescission of Antidumping
Duty Administrative Review, 62 FR 16772, 16775 (April 8, 1997), an
adverse inference is warranted where a respondent states merely ``that
it was on the verge of bankruptcy'' but provides no further
information.
Section 782(c)(1) requires that the Department consider modifying
its reporting requirements where a respondent promptly notifies the
Department that it cannot submit information in the ``requested form
and manner'' and suggests ``alternative forms'' in which to submit the
requested information. Saarstahl made no such suggestions; it only
informed the Department that it would supply the requested information
in a letter dated June 11, 1997. Under these circumstances, we continue
to find that Saarstahl failed to act to the best of its ability, and
that an adverse inference is warranted.
Furthermore, we agree with petitioners that the continued use of
the highest margin in the petition as adverse facts available for
Saarstahl is warranted given Saarstahl's failure to supply the
Department with any of the requested information. The use of the
highest calculated rate in the petition as adverse facts available for
Saarstahl is consistent with both the Act and Department practice.
Section 776(b) of the Act explicitly states that the Department may
rely upon information contained in the petition when making adverse
inferences. See also SAA at 870. Recently, the Department employed this
approach in Notice of Final Determination of Sales at Less Than Fair
Value: Collated Roofing Nails from Taiwan, 62 FR 51427, 51428 (October
1, 1997).
Comment 2. The Application of Facts Available to IHSW
Petitioners argue that IHSW's January 9 post-verification
submission constitutes substantial new information and should be
rejected by the Department in favor of facts available. Even if the
Department accepts IHSW's January 9 submission, petitioners contend
that the information submitted by IHSW remains incomplete and
unreliable, and therefore, the Department must use facts available for
the final determination.
IHSW argues that it has been cooperative with the Department to the
best of its ability throughout the investigation and, as such, the
Department has no basis to use an adverse facts available rate for the
final determination. IHSW concedes that it encountered some
difficulties in responding to the questionnaires, but claims that its
difficulties in reporting information were not the result of IHSW
failing to act to the best of its ability, but rather the result of
clerical errors or how IHSW maintains its business records. Concerning
the submission of data post-verification, IHSW asserts that the
Department was properly within its discretion to request revised cost
and sales databases from IHSW and that the January 9 submission did not
constitute new information. Further, IHSW addresses the specific errors
cited in petitioners' case brief, arguing that its January 9 submission
is ``sufficiently complete'' to serve as the basis for calculating an
antidumping margin. Finally, IHSW contends that the information in its
January 9 submission has been verified and can be easily used by the
Department.
DOC Position. In allowing IHSW to file its post-verification
submission, the Department was not permitting the submission of new
information, but rather permitting corrections to the information
already on the record, based on the findings at verification. Further,
the Department may request the submission of factual information at any
time during the proceeding, as provided for at 19 CFR 353.31(b)(1). We
have analyzed all of IHSW's information on the record for purposes of
the final determination. However, as discussed in detail in the ``Facts
Available'' section above, the Department has determined that: (1) IHSW
has failed to act to the best of its ability to provide information;
and (2) the information provided by IHSW remains unreliable and
unusable for purposes of conducting an accurate cost of production or
LTFV analysis (see also the February 13, 1998, Memorandum to Richard W.
Moreland). Therefore, we are basing our final determination margin for
IHSW on facts available.
[[Page 8957]]
Comment 3. Whether To Collapse IHSW and Thyssen and Assign Them a
Single Margin Rate
IHSW argues that the Department should not consider collapsing IHSW
with Thyssen, as alleged in petitioners' October 14, 1997, submission.
IHSW asserts that petitioners' contention is unfounded because: (1)
IHSW and Thyssen were completely unrelated during the POI and this
issue would be more appropriately considered, if at all, in an
administrative review; (2) the acquisition occurred after the POI and
therefore, neither company could have exercised control over the other
during the POI; and (3) there is no verified information on the record
to determine whether the potential for shifting of production between
IHSW and Thyssen exists.
Petitioners rebut IHSW's argument, stating that, for the reasons
detailed in their October 14, 1997, submission, the Department should
collapse IHSW and Thyssen and calculate a single margin rate for the
two companies. Petitioners contend that the relationship between IHSW
and Thyssen is such that it meets the criteria for collapsing the
companies (i.e., the producers are affiliated; the producers have
similar manufacturing facilities such that production can be shifted
between the two; and ``there is significant potential for manipulation
of price or production'').
DOC Position. We disagree with petitioners. IHSW purchased
Thyssen's steel wire rod-producing subsidiary six months or more after
the POI. There is no evidence of any affiliation between these
companies during the POI. Further, the limited evidence concerning this
transaction is insufficient to determine that it established any
affiliation between IHSW or Thyssen or, if they are affiliated, to
determine that collapsing is warranted. Therefore, we have assigned the
companies separate cash deposit rates in this final determination. The
merits of petitioners' collapsing argument may be explored in the
context of an administrative review, if an antidumping order is issued
and a review requested, for the period during which the acquisition of
Thyssen's rod-producing subsidiary took place.
Continuation of Suspension of Liquidation
In accordance with section 735(c)(4)(A) of the Act, we are
directing the Customs Service to continue to suspend liquidation of all
entries of steel wire rod from Germany, as defined in the ``Scope of
Investigation'' section of this notice, that are entered, or withdrawn
from warehouse, for consumption on or after October 1, 1997, the date
of publication of our preliminary determination in the Federal
Register. For these entries, the Customs Service will require a cash
deposit or posting of a bond equal to the estimated amount by which the
normal value exceeds the export price as shown below. This suspension
of liquidation will remain in effect until further notice.
------------------------------------------------------------------------
Margin
MFR/producer/exporter percentage
------------------------------------------------------------------------
Brandenburg Elektrostahlwerk GmbH.......................... 153.10
Ispat Hamburger Stahlwerke GmbH............................ 72.51
Saarstahl AG............................................... 153.10
Thyssen Stahl AG........................................... 153.10
All-Others................................................. 72.51
------------------------------------------------------------------------
The all-others rate applies to all entries of subject merchandise
except for the entries of merchandise produced by the exporters/
manufacturers listed above.
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
ITC of our determination. As our final determination is affirmative,
the ITC will determine whether these imports are causing material
injury, or threat of material injury, to the industry within 45 days of
its receipt of this notification.
If the ITC determines that material injury, or threat of material
injury, does not exist, the proceeding will be terminated and all
securities posted will be refunded or canceled. If the ITC determines
that such injury does exist, the Department will issue an antidumping
duty order directing Customs officials to assess antidumping duties on
all imports of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the effective date of the
suspension of liquidation.
This determination is published pursuant to section 735(d) of the
Act.
Dated: February 13, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-4541 Filed 2-20-98; 8:45 am]
BILLING CODE 3510-DS-P