[Federal Register Volume 63, Number 229 (Monday, November 30, 1998)]
[Notices]
[Pages 65750-65751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31842]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-588-846 and A-821-809]


Preliminary Determinations of Critical Circumstances: Certain 
Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Japan and the 
Russian Federation

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

EFFECTIVE DATE: November 30, 1998.

FOR FURTHER INFORMATION CONTACT: Lyn Baranowski (Russian Federation) at 
(202) 482-3208; and Nithya Nagarajan (Japan) at (202) 482-4243, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.

Preliminary Determination of Critical Circumstances

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 references 
to the provisions codified at 19 CFR Part 351 (1998).

Critical Circumstances

    On October 15, 1998, the Department of Commerce (``the 
Department'') initiated investigations to determine whether imports of 
certain hot-rolled flat-rolled carbon-quality steel products (``hot-
rolled steel'') from Brazil, Japan, and the Russian Federation 
(``Russia'') are being, or are likely to be, sold in the United States 
at less than fair value (63 FR 56607, October 22, 1998). In the 
petition filed on September 30, 1998, petitioners alleged that there is 
a reasonable basis to believe or suspect that critical circumstances 
exist with respect to imports of hot-rolled steel from Brazil, Japan, 
and Russia. On November 13, 1998, the International Trade Commission 
(``ITC'') preliminarily determined that there was threat of material 
injury to the domestic industry from imports of hot-rolled steel from 
Brazil, Japan, and Russia.
    In accordance with 19 CFR 351.206(c)(2)(i), because petitioners 
submitted a critical circumstances allegation more than 20 days before 
the scheduled date of the preliminary determination, the Department 
must issue a preliminary critical circumstances determination not later 
than the date of the preliminary determination. In a policy bulletin 
issued on October 8, 1998, the Department stated that it has determined 
that it may issue a preliminary critical circumstances determination 
prior to the date of the preliminary determination of dumping, assuming 
adequate evidence of critical circumstances is available (see Change in 
Policy Regarding Timing of Issuance of Critical Circumstances 
Determinations, 63 FR 55364). In accordance with this policy, we are 
issuing preliminary critical circumstances decisions in the 
investigations of imports of hot-rolled steel from Japan and Russia.
    Section 733(e)(1) of the Act provides that the Department will 
determine that critical circumstances exist if 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.

Japan

History of Dumping and Importer Knowledge

    We are not aware of any antidumping order in any country on hot-
rolled steel from Japan. Therefore, we examined whether there was 
importer knowledge. In determining whether there is a reasonable basis 
to believe or suspect that an importer knew or should have known that 
the exporter was selling hot-rolled steel at less than fair value and 
thereby causing material injury, the Department must rely on the facts 
before it at the time the determination is made. The Department 
normally considers margins of 25 percent or more and a preliminary ITC 
determination of material injury sufficient to impute knowledge of 
dumping and the likelihood of resultant material injury.
    In the present case, since we have not yet made a preliminary 
finding of dumping, the most reasonable source of information 
concerning knowledge of dumping is the petition itself. In the 
petition, petitioners calculated estimated dumping margins of 27.20 and 
28.25 percent, which both exceed the 25 percent threshold. Therefore, 
we preliminarily determine importers knew or should have known that the 
exporters were dumping the subject merchandise.
    As to the knowledge of likely injury from such dumped imports, we 
considered the information regarding injury to the domestic industry in 
the petition. We also considered other sources of information, 
including numerous press reports from early to mid-1998 regarding 
rising imports, falling domestic prices resulting from rising imports, 
and domestic buyers shifting to foreign suppliers. In addition to this 
information, the ITC preliminarily found threat of material injury to 
the domestic industry due to imports of hot-rolled steel from Japan. 
Therefore, with respect to Japan, we preliminarily find that there is a 
reasonable basis to believe or suspect that importers knew or should 
have known that material injury from the dumped merchandise was likely.

Massive Imports

    In determining whether there are ``massive imports'' over a 
``relatively short time period,'' the Department ordinarily bases its 
analysis on import data for at least the three months preceding (the 
``base period'') and following (the ``comparison period'') the filing 
of the petition. Imports normally will be considered massive when 
imports during the comparison period have increased by 15 percent or 
more compared to imports during the base period. However, as stated in 
the Department's regulations, at section 351.206(i), if the Secretary 
finds that importers, exporters, or producers had reason to believe, at 
some time prior to the beginning of the proceeding, that a proceeding 
was likely, then the Secretary may consider a time period of not less 
than three months from that earlier time.

[[Page 65751]]

    In this case, petitioners argue that importers, exporters, or 
producers of Japanese hot-rolled steel had reason to believe that an 
antidumping proceeding was likely before the filing of the petition. 
The Department examined whether conditions in the industry and 
published reports and statements provide a basis for inferring 
knowledge that a proceeding was likely. For Japan, we find that such 
press reports, particularly in March and April 1998, are sufficient to 
establish that by the end of April 1998, importers, exporters, or 
producers knew or should have known that a proceeding was likely 
concerning hot-rolled products from Japan. (See discussion in the 
Determination of Critical Circumstances Memo). Accordingly, we examined 
the increase in import volumes from May-September 1998 as compared to 
December 1997-April 1998 and found that imports of hot-rolled steel 
from Japan increased by more than 100 percent (see the Attachment to 
the Critical Circumstances Memo). Therefore, pursuant to section 733(e) 
of the Act and section 351.206(h) of the Department's regulations, we 
preliminarily determine that there have been massive imports of hot-
rolled steel from Japan over a relatively short time.

Russia

History of Dumping and Importer Knowledge

    To determine whether there is a history of injurious dumping of the 
merchandise under investigation, in accordance with section 
733(e)(1)(A)(i), the Department considers evidence of an existing 
antidumping order on hot-rolled steel from Russia in the United States 
or elsewhere to be sufficient. In this case, petitioners alleged that 
Chile, Indonesia, and Mexico all have antidumping orders in place 
covering subject merchandise. Because the antidumping order in Chile 
has been revoked, we are not considering it for purposes of this 
determination. Nevertheless, we find the antidumping orders in place 
against Russian hot-rolled steel in Indonesia and Mexico to be 
sufficient to indicate a history of injurious dumping. Therefore, with 
respect to Russia, we find that a history of dumping causing material 
injury exists. Since we have found a history of dumping causing 
material injury with respect to Russia, there is no need to examine 
importer knowledge.

Massive Imports

    In this case, petitioners argue that importers, exporters, or 
producers of Russian hot-rolled steel had reason to believe that an 
antidumping proceeding was likely before the filing of the petition. 
The Department examined whether conditions in the industry and 
published reports and statements provide a basis for inferring 
knowledge that a proceeding is likely. As discussed in the 
Determination of Critical Circumstances Memo, we find that for Russia 
such press reports are sufficient to establish that by the end of April 
1998, importers, exporters, or producers knew or should have known that 
a proceeding was likely. Accordingly, we examined the increase in 
import volumes from May-September 1998, as compared to December 1997-
April 1998, and found that imports of hot-rolled steel from Russia 
increased by 98 percent (see the Attachment to the Critical 
Circumstances Memo). Therefore, pursuant to section 733(e) of the Act 
and section 351.206(h) of the Department's regulations, we 
preliminarily determine that there have been massive imports of hot-
rolled steel from Russia over a relatively short time.

Brazil

    Because there is insufficient evidence on the record at this time 
that importers, exporters, or producers knew or should have known, at 
some time prior to the filing of the petition, that a proceeding 
concerning Brazil was likely, the appropriate comparison period for 
determining whether imports have been massive would begin at the time 
of filing of the petition. Because data for this period are not yet 
available, the Department will make its preliminary critical 
circumstances finding by the date of its preliminary determination 
regarding dumping.

Conclusion

    We preliminarily determine that there is a reasonable basis to 
believe or suspect that critical circumstances exist for imports of 
hot-rolled steel from Japan and Russia.

Suspension of Liquidation

    In accordance with section 733(e)(2) of the Act, upon issuance of 
an affirmative preliminary determination of sales at less than fair 
value in the Japan or Russia investigation, the Department will direct 
the U.S. Customs Service to suspend liquidation of all entries of hot-
rolled steel from Japan or Russia, as appropriate, that are entered, or 
withdrawn from warehouse, for consumption on or after 90 days prior to 
the date of publication in the Federal Register of our preliminary 
determination of sales at less than fair value. The Customs Service 
shall require a cash deposit or posting of a bond equal to the 
estimated preliminary dumping margins reflected in the preliminary 
determinations of sales at less than fair value published in the 
Federal Register. This suspension of liquidation will remain in effect 
until further notice.

Final Critical Circumstances Determinations

    We will make final determinations concerning critical circumstances 
for Japan and Russia when we make our final determinations regarding 
sales at less than fair value in these investigations, which will be 75 
days after the preliminary determinations regarding sales at less than 
fair value.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determinations.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: November 23, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-31842 Filed 11-27-98; 8:45 am]
BILLING CODE 3510-DS-P