[Federal Register Volume 63, Number 91 (Tuesday, May 12, 1998)]
[Notices]
[Pages 26150-26152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12593]
[[Page 26150]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-829, A-533-814, A-588-844, A-580-830, A-469-808, A-583-829]
Initiation of Antidumping Duty Investigations: Stainless Steel
Round Wire from Canada, India, Japan, the Republic of Korea, Spain, and
Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: May 12, 1998.
FOR FURTHER INFORMATION CONTACT: Thomas Schauer (Canada) at (202) 482-
4852; Diane Krawczun (India) at (202) 482-0198; Edward Easton (Japan)
at (202) 482-1777; Gabriel Adler (the Republic of Korea) at (202) 482-
1442; Michael Panfeld (Spain) at (202) 482-0168; or Michelle Frederick
(Taiwan) at (202) 482-0186, Import Administration-Room 1870,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, DC 20230.
Initiation of Investigations
The Applicable Statute and Regulations
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 Round Agreements Act (``URAA''). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to the regulations published in the Federal Register on May 19, 1997
(62 FR 27296).
The Petition
On March 27, 1998, the Department of Commerce (``the Department'')
received a petition filed in proper form by the following companies:
ACS Industries, Inc., Al Tech Specialty Steel Corp., Branford Wire &
Manufacturing Company, Carpenter Technology Corp., Handy & Harman
Specialty Wire Group, Industrial Alloys, Inc., Loos & Company, Inc.,
Sandvik Steel Company, Sumiden Wire Products Corporation, and Techalloy
Company, Inc. (``the petitioners''). Sumiden Wire Products Corporation
is not a petitioner in the Japanese case, and Carpenter Technology
Corp. and Techalloy Company, Inc., are not petitioners in the Canadian
case. The Department received numerous supplemental submissions
throughout the month of April, 1998.
In accordance with section 732(b) of the Act, the petitioners
allege that imports of stainless steel round wire (``SSRW'') from
Canada, India, Japan, the Republic of Korea (Korea), Spain, and Taiwan
are being, or are likely to be, sold in the United States at less than
fair value within the meaning of section 731 of the Act, and that such
imports are materially injuring, or threatening material injury to, an
industry in the United States.
The Department finds that the petitioners filed the petition on
behalf of the domestic industry because they are interested parties as
defined in section 771(9)(C) and (D) of the Act and they have
demonstrated sufficient industry support (see discussion below).
Scope of Investigations
For purposes of these investigations, the product covered is
stainless steel round wire. Stainless steel round wire is any cold-
formed (i.e., cold-drawn, cold-rolled) stainless steel product, of a
cylindrical contour, sold in coils or spools, and not over 0.703 inch
(18 mm) in maximum solid cross-sectional dimension. SSRW is made of
iron-based alloys containing, by weight, 1.2 percent or less of carbon
and 10.5 percent or more of chromium, with or without other elements.
Metallic coatings, such as nickel and copper coatings, may be applied.
The merchandise subject to these investigations is classifiable
under subheadings 7223.00.1015, 7223.00.1030, 7223.00.1045,
7223.00.1060, and 7223.00.1075 of the Harmonized Tariff Schedule of the
United States (``HTSUS''). Although the HTSUS subheadings are provided
for convenience and customs purposes, the written description of the
merchandise under investigation is dispositive.
During our review of the petition, we discussed with the
petitioners whether the proposed scope was an accurate reflection of
the product for which the domestic industry is seeking relief. The
petitioners indicated that the scope in the petition accurately
reflected the product for which they are seeking relief. Consistent
with the preamble to the new regulations (62 FR at 27323), we are
setting aside a period for parties to raise issues regarding product
coverage. The Department encourages all parties to submit such comments
by 20 days after the publication of this notice. Comments should be
addressed to Import Administration's Central Records Unit at Room 1870,
U.S. Department of Commerce, Pennsylvania Avenue and 14th Street, N.W.,
Washington, D.C. 20230. This period of scope consultation is intended
to provide the Department with ample opportunity to consider all
comments and to consult with parties prior to the issuance of the
preliminary determinations.
Determination of Industry Support for the Petition
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (1) At least
25 percent of the total production of the domestic like product; and
(2) more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the petition.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers of a domestic like product. Thus, to determine whether the
petition has the requisite industry support, the statute directs the
Department to look to producers and workers who account for production
of the domestic like product. The International Trade Commission
(``ITC''), which is responsible for determining whether the domestic
industry has been injured, must also determine what constitutes a
domestic like product in order to define the industry. While both the
Department and the ITC are required to apply the same statutory
provision regarding the domestic like product (section 771(10) of the
Act), they do so for different purposes and pursuant to separate and
distinct authority. In addition, the Department's determination is
subject to limitations of time and information. Although this may
result in different definitions of the domestic like product, such
differences do not render the decision of either agency contrary to
law.1 Section 771(10) of the Act defines domestic like
product as ``a product which is like, or in the absence of like, most
similar in characteristics and uses with, the article subject to an
investigation under this title.'' Thus, the reference point from which
the domestic like product analysis begins is ``the article subject to
an investigation,'' i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition. The domestic like product referred to in the petition is the
single domestic like product defined in the ``Scope of Investigation''
section, above. We
[[Page 26151]]
consulted with the ITC, the U.S. Customs Service, and petitioners and
have, as a result of these discussions, adopted the domestic like
product definition set forth in the petition.
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\1\ See Algoma Steel Corp., Ltd. v. United States, 688 F. Supp.
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass Therefor from Japan: Final Determination;
Rescission of Investigation and Partial Dismissal of Petition, 56 FR
32376, 32380-81 (July 16, 1991).
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On April 8, 1998, the ITC presented us with information indicating
that there may be as many as 25 additional producers of the domestic
like product that were not included in the petition. On April 9, 1998,
Central Wire Industries Ltd. and Greening Donald Co., Ltd., two
Canadian producers of subject merchandise, submitted a list of 47 non-
petitioning companies that they claimed represented U.S. producers of
the domestic like product. See Letter from Central Wire Industries Ltd.
and Greening Donald Co., Ltd. to the Secretary of Commerce dated April
9, 1998 (the Central Wire submission). Certain of these companies were
included in the list of non-petitioning producers in the petition, but
a majority were not. Because there was a question as to whether
petitioners' met the statutory requirements cited above, we exercised
our statutory discretion under section 732(c)(1)(B) to extend the
deadline for determining whether to initiate an investigation to a
maximum of 40 days from the date of filing in order to resolve this
issue. See Memorandum to Joseph A. Spetrini from Laurie Parkhill dated
April 16, 1998. We also invited parties to identify any other potential
producers of the domestic like product.
On April 21, 1998, the petitioners provided production information
concerning 42 of the then 64 nonpetitioning companies that had been
identified as potential producers by the ITC, the Central Wire
submission, or by the petitioners themselves at that time. See Letter
from the petitioners to the Secretary of Commerce, April 21, 1998. The
sources of this production information are affidavits from co-counsel
for the petitioners, stating that they have contacted each of the 42
producers and have received the production information directly from
the companies. The petitioners also included affidavits from co-counsel
for the petitioners, as well as one of the petitioning company
officials, indicating that certain nonpetitioning companies support the
petition.
On April 21, 1998, Central Wire submitted a list of all U.S.
producers (including the petitioners) that it believed produced the
domestic like product. See Letter from Central Wire Industries Ltd. and
Greening Donald Co., Ltd. to the Secretary of Commerce, April 21, 1998.
While most of these potential producers had already been identified,
there were several potential producers who had not been previously
identified, and thus were not included in the list of 64 companies
provided in the petitioners' April 21, 1998 letter.
We were able to contact all but one of the companies identified,
and based on the data now on the record, we determine that the
petitioners have established industry support in accordance with the
statutory requirements cited above. See Memorandum from Laurie Parkhill
and Gary Taverman to Richard W. Moreland dated May 6, 1998.
Accordingly, we determine that the petition is filed on behalf of the
domestic industry within the meaning of section 732(b)(1) of the Act.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which our decisions to initiate these
investigations are based. Should the need arise to use any of this
information in our preliminary or final determinations for purposes of
facts available under section 776 of the Act, we may re-examine the
information and revise the margin calculations, if appropriate.
With respect to sales to the U.S. market, the petitioners used an
export price (EP) analysis because the producers in each country make
their first sale of exports to unaffiliated importers. The petitioners
based export prices on affidavits based on call reports and price
quotes, as appropriate. The petitioners calculated EP by subtracting
domestic inland freight (except in the India and Taiwan cases), ocean
freight and marine insurance (except in the Canada case), import duties
(except in the India case), harbor maintenance fees, U.S. merchandise
processing fees, and U.S. inland freight (except in the Canada and
India cases). The data for these adjustments was based on market
research, U.S. Customs statistics, affidavits, and the 1997 import duty
rates. The petitioners did not deduct domestic inland freight in the
Indian case because they were not able to obtain such data. Although
the petitioners did not explain why they did not deduct domestic inland
freight in the Taiwan case, we note that this will not cause the
dumping margins to be overstated. All adjustments not mentioned above
that were not made by the petitioners in specific cases were due to the
terms of the sales. We restated some of the export prices in the India
case to conform with the affidavits the petitioners submitted. See
Memorandum to File dated April 16, 1998.
The petitioners based normal value (NV) on home market prices, as
obtained by market research. They adjusted the home market prices by
deducting foreign inland freight (except in the India case due to the
terms of sale) and imputed credit, and by adding the imputed credit
calculated on the U.S. sale (except in the India case). Though the
petitioners did not adjust for imputed credit in the India case, we
were able to calculate an imputed credit expense for that case and did
deduct it from NV. See Memorandum to File dated April 16, 1998. The
data for the adjustments the petitioners made to NV were based on
market research and International Financial Statistics (published by
the International Monetary Fund). The petitioners submitted affidavits
to support their claims regarding packing costs in the U.S. and
Japanese markets. However, there was no adjustment for packing in other
cases, either because information was not available for a country or
because the petitioners assumed that packing costs were the same for
sales to the home market and the U.S. market. There is no public
evidence available to adjust NV for the differences in packing costs
between the U.S. and home markets. Furthermore, our experience in steel
cases generally suggests that the packing costs of export sales are
nearly always greater than or equal to the packing costs of domestic
sales, because additional precautions are usually necessary to protect
exported merchandise (for example, from rust) during its longer time in
transit. Therefore, we conclude that not adjusting for differences in
packing costs is conservative.
Pursuant to sections 773(a)(4) and 773(e) of the Act, the
petitioners also based NV for sales in all countries, except Japan, on
constructed value (CV). CV consists of COM, selling, general and
administrative expenses (SG&A), packing and profit. The petitioners
based their calculations for COM, SG&A and packing on costs obtained by
market research, affidavits from the petitioning companies' officials,
and U.S. industry data compiled by the petitioners. We recalculated the
CVs used in the Canada, India, and Taiwan cases. The nature of the
recalculations and the reasons for the recalculations are explained in
Memoranda to File dated April 16, 1998.
Based on comparisons of EP to NV, the petitioners estimate margins
of 2.18 to 64.24 percent in the Taiwan case. We recalculated the
estimated margins to be 2.38 to 40.48 percent in the Canada case, 3.47
to 36.52 percent in the India case, 2.02 to 29.58 percent in the Japan
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case, 3.46 to 66.44 percent in the Korea case, and 12.99 to 35.80
percent in the Spain case.
Initiation of Cost Investigations
Pursuant to section 773(b) of the Act, the petitioners alleged that
sales in the home market of Canada, India, Korea, and Taiwan were made
at prices below the cost of production (COP) and, accordingly,
requested that the Department conduct a country-wide sales-below-COP
investigation in Canada, India, Korea, and Taiwan. The Statement of
Administrative Action (``SAA''), submitted to Congress in connection
with the interpretation and application of the Uruguay Round
Agreements, states that an allegation of sales below COP need not be
specific to individual exporters or producers. SAA, H.R. Doc. No. 316,
103d Cong., 2d Sess., at 833 (1994). The SAA states at 833 that
``Commerce will consider allegations of below-cost sales in the
aggregate for a foreign country, just as Commerce currently considers
allegations of sales at less than fair value on a country-wide basis
for purposes of initiating an antidumping investigation.''
The statute at section 773(b) states that the Department must have
``reasonable grounds to believe or suspect'' that below-cost sales have
occurred before initiating such an investigation. ``Reasonable
grounds'' exist when an interested party provides specific factual
information on costs and prices, observed or constructed, indicating
that sales in the foreign market in question are at below-cost prices.
Based upon the comparison of the adjusted prices from the petition of
the foreign like product in Canada, India, Korea, and Taiwan to the COP
calculated in the petition (and adjusted in the Canada, India, and
Taiwan cases as described in Memoranda to File dated April 16, 1998),
we find ``reasonable grounds to believe or suspect'' that sales of
these foreign like products were made below their respective COP within
the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the
Department is initiating the requested country-wide cost investigation
for Canada, India, Korea, and Taiwan.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of SSRW from Canada, India, Japan, Korea, Spain,
and Taiwan are being, or are likely to be, sold at less than fair
value.
Allegations and Evidence of Material Injury and Causation
The petition alleges that the U.S. industry producing the domestic
like product is being materially injured, and is threatened with
material injury, by reason of the individual and cumulated imports of
the subject merchandise sold at less than NV. The allegations of injury
and causation are supported by relevant evidence including business
proprietary data from the petitioning firms and U.S. Customs import
data. The Department assessed the allegations and supporting evidence
regarding material injury and causation and determined that these
allegations are sufficiently supported by accurate and adequate
evidence and meet the statutory requirements for initiation.
Initiation of Antidumping Investigations
We have examined the petition on SSRW and have found that it meets
the requirements of section 732 of the Act. Therefore, we are
initiating antidumping duty investigations to determine whether imports
of SSRW from Canada, India, Japan, Korea, Spain, and Taiwan are being,
or are likely to be, sold in the United States at less than fair value.
Unless extended, we will make our preliminary determinations for the
antidumping duty investigations by September 23, 1998.
Distribution of Copies of the Petitions
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of each petition has been provided to the
representatives of the governments of Canada, India, Japan, Korea,
Spain, and Taiwan. We will attempt to provide a copy of the public
version of each petition to each exporter named in the petition (as
appropriate).
International Trade Commission Notification
We have notified the ITC of our initiations, as required by section
732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will determine by June 1, 1998, whether there is a
reasonable indication that imports of SSRW from Canada, India, Japan,
Korea, Spain, and Taiwan are causing material injury, or threatening to
cause material injury, to a U.S. industry. Negative ITC determinations
will result in the particular investigations being terminated;
otherwise, the investigations will proceed according to statutory and
regulatory time limits.
Dated: May 6, 1998.
Richard W. Moreland,
Acting Assistant Secretary, Import Administration.
[FR Doc. 98-12593 Filed 5-11-98; 8:45 am]
BILLING CODE 3510-DS-P