[Federal Register Volume 64, Number 50 (Tuesday, March 16, 1999)]
[Notices]
[Pages 12959-12967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6293]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-427-816, A-475-826, A-580-836, A-560-805, A-533-817, A-588-847,  A-
894-801,   A-851-801]


Initiation of Antidumping Duty Investigations: Certain Cut-To-
Length Carbon-Quality Steel Plate From the Czech Republic, France, 
India, Indonesia, Italy, Japan, the Republic of Korea, and the Former 
Yugoslav Republic of Macedonia

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

EFFECTIVE DATE: March 16, 1999.

FOR FURTHER INFORMATION CONTACT: James Terpstra (France, India, and the 
Republic of Korea) at (202) 482-3965; Wendy Frankel (Italy, Japan) at 
(202) 482-5849; David Goldberger (Indonesia) at (202) 482-4136, Irene 
Darzenta Tzafolias (Former Yugoslav Republic of Macedonia) at (202) 
482-6320 and James Maeder (Czech Republic) at (202) 482-3330, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, 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 references 
to the provisions codified at 19 CFR part 351 (1998).

The Petitions

    On February 16, 1999, the Department of Commerce (the Department) 
received petitions filed in proper form by Bethlehem Steel Corporation, 
Gulf States Steel, Inc., IPSCO Steel Inc., Tuscaloosa Steel 
Corporation,1 the United Steelworkers of America, and the 
U.S. Steel Group (a unit of USX

[[Page 12960]]

Corporation) (collectively the petitioners). The Department received 
supplemental information to the petitions on February 25 and 26, 1999, 
and March 1, 1999.
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    \1\ Note: Tuscaloosa Steel Corporation is not a petitioner in 
the investigations involving the Czech Republic, France, and Italy.
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    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of certain cut-to-length carbon steel plate (CTL 
plate) from the Czech Republic, France, India, Indonesia, Italy, Japan, 
the Republic of Korea (Korea), and the Former Yugoslav Republic of 
Macedonia (FYR Macedonia) 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 an industry 
in the United States.
    The Department finds that the petitioners filed these petitions on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) and (D) of the Act, and they have 
demonstrated sufficient industry support with respect to each of the 
antidumping investigations that they are requesting the Department to 
initiate (see Determination of Industry Support for the Petitions 
below).

Scope of Investigations

    The products covered by this scope are certain hot-rolled carbon-
quality steel: (1) 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 nominal or actual thickness of 
not less than 4 mm, which are cut-to-length (not in coils) and without 
patterns in relief), of iron or non-alloy-quality steel; and (2) flat-
rolled products, hot-rolled, of a nominal or actual thickness of 4.75 
mm or more and of a width which exceeds 150 mm and measures at least 
twice the thickness, and which are cut-to-length (not in coils).
    Steel products to be included in this scope are of rectangular, 
square, circular or other shape and of rectangular or non-rectangular 
cross-section where such non-rectangular cross-section is achieved 
subsequent to the rolling process (i.e., products which have been 
``worked after rolling'')--for example, products which have been 
beveled or rounded at the edges. Steel products that meet the noted 
physical characteristics that are painted, varnished or coated with 
plastic or other non-metallic substances are included within this 
scope. Also, specifically included in this scope are high strength, low 
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium, 
titanium, vanadium, and molybdenum.
    Steel products to be included in this scope, regardless of 
Harmonized Tariff Schedule of the United States (HTSUS) definitions, 
are products in which: (1) Iron predominates, by weight, over each of 
the other contained elements, (2) the carbon content is two percent or 
less, by weight, and (3) none of the elements listed below is equal to 
or exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or
1.50 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.41 percent of titanium, or
0.15 percent of vanadium, or
0.15 percent zirconium.

    All products that meet the written physical description, and in 
which the chemistry quantities do not equal or exceed any one of the 
levels listed above, are within the scope of these investigations 
unless otherwise specifically excluded. The following products are 
specifically excluded from these investigations: (1) Products clad, 
plated, or coated with metal, whether or not painted, varnished or 
coated with plastic or other non-metallic substances; (2) SAE grades 
(formerly AISI grades) of series 2300 and above; (3) products made to 
ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-
resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to 
ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary 
equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon 
manganese steel or silicon electric steel.
    The merchandise subject to these investigations is classified in 
the HTSUS under subheadings: 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, 7225.40.3050, 
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000, 
7226.91.8000, 7226.99.0000.

    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 petitions, we discussed the scope with the 
petitioners to ensure that the scope in the petitions accurately 
reflects the merchandise for which the domestic industry is seeking 
relief. Moreover, as we discussed in the preamble to the Department's 
regulations (62 FR at 27323), we are setting aside a period for parties 
to raise issues regarding product coverage. In particular, we seek 
comments on the specific levels of alloying elements set out in the 
description above, the clarity of grades and specifications excluded 
from the scope, and the physical and chemical description of the 
product coverage. The Department encourages all parties to submit such 
comments by March 29, 1999. Comments should be addressed to Import 
Administration's Central Records Unit at Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and consult 
with parties prior to the issuance of the preliminary determinations.

Determination of Industry Support for the Petitions

    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 produce 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 
must apply the same statutory definition 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

[[Page 12961]]

time and information. Although this may result in different definitions 
of the like product, such differences do not render the decision of 
either agency contrary to the law.2
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    \2\ 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 Therefore from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32380-81 (July 16, 1991).
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    Section 771(10) of the Act defines the 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. Moreover, the petitioners do not offer a definition of 
domestic like product distinct from the scope of the investigations.
    In this case, ``the article subject to investigation'' includes 
certain products which have not previously been included within the 
scope of investigations involving cut-to-length carbon steel products. 
To this end, the Department has reviewed reasonably available 
information to determine whether the products within the scope of the 
investigations constitute one or more than one domestic like 
product(s).
    Some steel products classified as alloy steels based on the HTSUS 
are recognized as carbon steels by the industry and/or the marketplace. 
For example, The Book of Steel, a 1996 publication by Sollac, a flat-
rolled steel division of Usinor, one of the largest steel companies in 
the world, identifies HSLA as falling within categories of plain carbon 
sheet steels (see chapter 44). Also, Carbon and Alloy Steels, published 
in 1996 by ASM International, a major materials society, indicates that 
HSLA steels are not considered to be alloy steels, but are in fact 
similar to as-rolled mild-carbon steel and are generally priced by 
reference to the base price for carbon steels (see page 29). Carbon and 
Alloy Steels also distinguishes between carbon-boron and alloy-boron 
steels; the former may contain boron at levels which would classify it 
as alloy under the HTSUS, but would not classify it as an alloy steel 
commercially because, unlike the alloy-boron steels, higher levels of 
other alloying elements are not specified (see e.g., pages 159 and 
161).
    The Department has considered that, with respect to certain steel 
products, such as HSLA, the petitioners indicate that these steel 
products are manufactured by similar processes, are priced from similar 
bases, are marketed in comparable ways, and are used for similar 
applications as carbon steels.
    Further, we confirmed this description with product experts at the 
Department and the ITC. Other than the fact that the AISI technically 
defines alloy steels based on alloy levels comparable to those in the 
HTSUS, none of the individuals cited reasons why the products in 
question might be treated as distinct from cut-to-length carbon steels. 
For these reasons, the Department determines that for purposes of these 
investigations, the domestic like product definition is the single 
domestic like product defined in the Scope of the Investigations 
section above.
    Based on our analysis of the information and arguments presented to 
the Department and the information independently obtained and reviewed 
by the Department, we have determined that there is a single domestic 
like product which is defined in the Scope of Investigations section 
above. Moreover, the Department has determined that the petitions (and 
subsequent amendments) contain adequate evidence of industry support 
and, therefore, polling is unnecessary (see Import Administration 
Antidumping Investigation Initiation Checklist, Re: Industry Support, 
March 3, 1999, hereinafter the IA Initiation Checklist, on file in the 
Central Records Unit (CRU) of the main Department of Commerce 
building). The Department received no opposition to the petitions. For 
all countries, the petitioners established industry support 
representing over 50 percent of total production of the domestic like 
product.
    Accordingly, the Department determines that these petitions are 
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. A more detailed description of these 
allegations is provided in the IA Initiation Checklist. 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.

Czech Republic

    The petitioners identified Nova Hut a.s. (Nova Hut), Vitkovice a.s. 
(Vitkovice), and ZDB a.s. (ZDB) as possible exporters of CTL plate from 
the Czech Republic. The petitioners further identified Nova Hut and 
Vitkovice as the primary producers of subject merchandise in the Czech 
Republic, and Vitkovice as the primary exporter of the subject 
merchandise to the United States.
    The petitioners based export price (EP) on a U.S. price offering 
for CTL plate produced by Vitkovice. The petitioners made deductions 
from EP for U.S. port charges (from a U.S. port tariff schedule); CIF 
charges, including ocean freight and insurance (from official U.S. 
import statistics); and duties (from the HTSUS).
    The petitioners note that the Department has never had occasion to 
determine whether the Czech Republic is a non-market economy country 
(NME) to the extent that sales or offers for sale of such or similar 
merchandise in the Czech Republic do not permit calculation of normal 
value (NV) under 19 CFR 351.404. In previous investigations, however, 
the Department has determined that Czechoslovakia, the predecessor of 
both the Czech Republic and the Slovak Republic, was a NME. See e.g., 
Final Determination of Sales at Less Than Fair Value: Carbon Steel Wire 
Rod from Czechoslovakia, 49 FR 19370 (May 7, 1984). In accordance with 
section 771(18)(C)(i) of the Act, the presumption of NME status remains 
in effect until revoked by the Department. The presumption of NME 
status for the Czech Republic has not been revoked by the Department 
and, therefore, remains in effect for purposes of the initiation of 
this investigation. Accordingly, the NV of the product appropriately is 
based on factors of production valued in a surrogate market economy 
country, in accordance with section 773(c) of the Act. The petitioners 
constructed a NV based on the factors of production methodology 
pursuant to section 773(c) of the Act. In the course of this 
investigation, all parties will have the opportunity to provide 
relevant information related to the issues of the Czech Republic's NME 
status and the granting of separate rates to individual exporters. See 
e.g., Final Determination of Sales at Less Than Fair Value: Silicon 
Carbide from the PRC, 59 FR 22585 (May 2, 1994).
    With respect to NV, the petitioners based the factors of 
production, as defined by section 773(c)(3) of the Act (raw materials, 
labor, energy and capital cost), for CTL plate on the quantities of

[[Page 12962]]

inputs used by a production facility of one of the petitioners, 
adjusted for known differences in production efficiencies on the basis 
of available information. The petitioners selected this particular 
facility claiming that its production process was similar to that of 
Vitkovice. The petitioners asserted that detailed information is not 
available regarding the quantities of inputs used by Vitkovice. Thus, 
they have assumed, for purposes of the petition, that Vitcovice uses 
the same inputs in the same quantities as the petitioners, except where 
a variance from their cost model can be justified on the basis of 
available information. Based on the information provided by the 
petitioners, we believe that their use of adjusted factors of 
production of one of their own facilities represents information 
reasonably available to the petitioners and is appropriate for purposes 
of the initiation of this investigation.
    The petitioners selected Brazil as the primary surrogate, stating 
that the per-capita Gross National Product (GNP) of Brazil is similar 
to that of the Czech Republic.3 Moreover, of the five 
countries that are most similar to the Czech Republic with regard to 
per-capita GNP, Brazil is the most significant producer of CTL plate. 
Brazil has two CTL plate producers with a combined annual production 
capacity of nearly two million metric tons. The only other surrogate 
candidate that produces CTL plate is Chile. The petitioners claim that 
Chile has one plate mill, but they do not know its annual capacity. 
However, the petitioners note that Chile's total 1997 hot-rolled flat 
steel production was 457,000 metric tons, only a portion of which was 
CTL plate. Thus, the petitioners maintain that Brazil is the most 
suitable surrogate among the potential surrogates, because, pursuant to 
section 773(c)(4) of the Act, it is at a comparable level of economic 
development and it is the most significant producer of comparable 
merchandise of any other potential surrogate. Based on the information 
provided by the petitioners, we believe that the petitioners' use of 
Brazil as a surrogate country is appropriate for purposes of the 
initiation of this investigation.
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    \3\ The petitioners acknowledge that the Department's 
regulations indicate that GDP is the appropriate basis for 
determining comparability but argue that GNP is reasonable as a 
basis for initiating.
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    In accordance with section 773(c)(4) of the Act, the petitioners 
valued factors of production, where possible, using reasonably 
available, public surrogate country data. Specifically:
     Coal was valued based on Brazilian import values reported 
in U.S. dollars, as published in the October 1998 Brazilian edition of 
the World Trade Atlas.
     Iron ore was valued using the public price information of 
a Brazilian iron ore producer.
     Scrap was valued based on a July 3, 1997, report by Credit 
Suisse First Boston Corporation.
     Labor was valued using the regression-based wage rate for 
the Czech Republic provided by the Department, in accordance with 19 
CFR 351.408(c)(3).
     Electricity and natural gas were valued using the rate for 
Brazil published in a quarterly report of the OECD's International 
Energy Agency from the third quarter of 1998.
     Underfiring fuels and repair and maintenance materials 
were valued using the costs of the petitioner whose production process 
is similar to Vitkovice's, because the petitioners were unable to find 
Brazilian values for them.
     For selling, general, and administrative (SG&A) expenses, 
financial expenses, and profit, the petitioners applied rates derived 
from the 1997 public financial statements of the two Brazilian 
producers of the subject merchandise, COSIPA and USIMINAS.
     Depreciation was valued using the product-specific 
depreciation rate of the petitioner whose production process is similar 
to Vitkovice's, explaining that the rate they could derive from the 
Brazilian producers' information would not be product specific.

Based on the information provided by the petitioners, we believe that 
their surrogate values represent information reasonably available to 
them and are acceptable for purposes of the initiation of this 
investigation.
    Based on comparisons of EP to NV, the petitioners estimated the 
dumping margin for CTL plate from the Czech Republic to be 76.38 
percent.

France

    The petitioners identified Creusot Loire Industrie (CLI) and GTS 
Industries as possible exporters of CTL plate from France. The 
petitioners further identified these exporters as the primary producers 
of subject merchandise in France. The petitioners based EP on a U.S. 
price offering to an unaffiliated U.S. purchaser for two products. The 
petitioners made deductions from EP for CIF charges, including ocean 
freight and insurance (from official U.S. import statistics); and 
duties (from the HTSUS).
    In addition, the petitioners provided, as a second basis for EP, 
the average unit value (AUV) for three of the HTSUS categories 
accounting for the largest volume of imports from France during the 
first eleven months of 1998, the most current data available. The 
petitioners maintain that the products within these categories, while 
representing a range of sizes, are nevertheless indicative of average 
pricing because the products within these categories represent the 
largest volume commercial products. The petitioners also maintain that 
the values for CTL plate in the IM-145 approximate the FOB price of the 
merchandise, packaged and ready for delivery at the foreign port (see 
19 USC section 1401a and 19 CFR 152.101).
    With respect to NV, the petitioners provided home market prices for 
common grades and sizes of CTL plate obtained from foreign market 
research. These products are comparable to the products exported to the 
United States, which serve as the basis for EP. The price used in the 
calculation of NV was an ex-factory price, exclusive of taxes.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of CTL plate in the 
home market were made at prices below the cost of production (COP), 
within the meaning of section 773(b) of the Act, and requested that the 
Department conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM), SG&A expenses, and packing expenses. To 
calculate COM, the petitioners relied upon their own production 
experience, adjusted for known differences between costs incurred to 
produce CTL plate in the United States and in France using publicly 
available data.
    To calculate SG&A and financial expenses, the petitioners relied 
upon the 1997 financial statements of a French steel producer. Based 
upon the comparison of the adjusted price of the foreign like product 
in the home market to the calculated COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made below the COP, within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners also based NV for sales in France on constructed value 
(CV). The petitioners calculated CV using the same COM, SG&A and 
financial expense figures

[[Page 12963]]

used to compute French home market costs. Consistent with section 
773(e)(2) of the Act, the petitioners also added to CV an amount for 
profit. Profit was based upon the aforementioned French steel company's 
1997 financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
CV compared to U.S. price offers (7.99 to 30.06 percent); and (2) CV 
compared to AUV (11.37 to 42.50 percent).

India

    The petitioners identified Steel Authority of India Ltd. (SAIL) as 
an exporter of CTL plate from India. According to the petitioners, SAIL 
accounted for a large percentage of the subject merchandise exported to 
the United States during the January-November 1998 time period. The 
petitioners based EP on a U.S. price offering to unaffiliated 
purchasers. The petitioners made deductions from EP for CIF charges, 
including ocean freight and insurance (from official U.S. import 
statistics); and duties (from the HTSUS).
    With respect to NV, the petitioners provided home market prices for 
common grades and sizes of CTL plate obtained from foreign market 
research. These products are comparable to the products exported to the 
United States which serve as the basis for EP. The price used in the 
calculation of NV was an ex-factory price, exclusive of taxes.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of certain CTL 
plate in the home market were made at prices below the COP, within the 
meaning of section 773(b) of the Act, and requested that the Department 
conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses, and packing expenses. To calculate COM, the petitioners 
relied upon their own production experience, adjusted for known 
differences between costs incurred to produce CTL plate in the United 
States and in India using market research and publicly available data.
    To calculate SG&A and financial expenses, the petitioners relied 
upon the 1997 financial statements of an Indian steel producer. Based 
upon the comparison of the adjusted prices of the foreign like product 
in the home market to the calculated COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made below the COP, within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners also based NV for sales in India on CV. The petitioners 
calculated CV using the same COM, SG&A and financial expense figures 
used to compute Indian home market costs. Consistent with section 
773(e)(2) of the Act, the petitioners also added to CV an amount for 
profit. Profit was based on the aforementioned Indian steel company's 
1997 financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
HMP compared to U.S. price offers (44.51 percent); and (2) CV compared 
to U.S. price offers (72.49 percent).

Indonesia

    The petitioners identified PT Gunawan Dianjaya Steel (Gunawan), PT 
Jaya Pari Steel Corp., Ltd., Tbk.(Jaya Pari), and PT Krakatau Steel 
(Krakatau) as possible exporters of CTL plate from Indonesia. The 
petitioners based EP on a U.S. price offer for several products 
manufactured by Gunawan and sold to an unaffiliated U.S. purchaser. The 
petitioners made deductions from EP for foreign inland freight (based 
on foreign market research), U.S. port charges (from a U.S. port tariff 
schedule); CIF charges, including ocean freight and insurance (from 
official U.S. import statistics); duties (from the HTSUS); and U.S. 
movement expenses, including inland freight, based on the petitioners' 
experience.
    With respect to NV, the petitioners used a delivered home market 
price, exclusive of taxes, for a common grade and size of CTL plate 
produced by Gunawan, obtained from foreign market research. This 
product is comparable to one of the products exported to the United 
States, which serves as the basis for EP. The petitioners deducted 
inland freight expenses based on information from foreign market 
research. The petitioners made a circumstance-of-sale adjustment for 
credit expenses based on information from foreign market research.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of CTL plate in the 
home market were made at prices below the COP, within the meaning of 
section 773(b) of the Act, and requested that the Department conduct a 
country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses, and packing expenses. To calculate COM, the petitioners 
relied upon their own production experience, adjusted for known 
differences between costs incurred to produce CTL plate in the United 
States and in Indonesia using publicly available data.
    To calculate SG&A and financial expenses, the petitioners relied 
upon the 1997 financial statements of an Indonesian steel producer. 
Based upon the comparison of the adjusted price of the foreign like 
product in the home market to the calculated COP of the product, we 
find reasonable grounds to believe or suspect that sales of the foreign 
like product were made below the COP, within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners also based NV for sales in Indonesia on CV. The petitioners 
calculated CV using the same COM, SG&A and financial expense figures 
used to compute Indonesian home market costs. Consistent with section 
773(e)(2) of the Act, the petitioners also added to CV an amount for 
profit. Profit was based upon an Indonesian steel producer's 1997 
financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
HMP compared to U.S. price offers (17.59 percent); and (2) CV compared 
to U.S. price offers (52.42 percent).

Italy

    The petitioners identified Ilva Laminati Piani SpA (ILP), Palini & 
Bertoli SpA (PB), Siderurgica Villalvernia SpA (SV), and Ferriera 
Siderscal SpA (FS) as possible exporters of CTL plate from Italy. The 
petitioners further identified these exporters as the primary producers 
of subject merchandise in Italy. The petitioners based EP on a U.S. 
price offering to an unaffiliated U.S. purchaser for two products. The 
delivery terms were FOB duty paid and Ex-Dock duty paid. The 
petitioners made deductions from EP for CIF charges, including ocean 
freight and insurance (from official U.S. import statistics).
    In addition, the petitioners provided, as a second basis for EP, 
the AUV for the three HTSUS categories accounting for the largest 
volume of imports from Italy during the first eleven months of 1998. 
The petitioners maintain that the products within these categories, 
while representing a range of sizes, are nevertheless indicative of 
average pricing because the products within these categories represent 
the largest volume commercial products. The petitioners maintain that 
the values for CTL plate in the IM-145 approximate the FOB price of the 
merchandise,

[[Page 12964]]

packaged and ready for delivery at the foreign port (see 19 USC section 
1401a and 19 CFR 152.101).
    With respect to NV, the petitioners used an ex-factory home market 
price, exclusive of taxes, for a common grade and size of CTL plate 
obtained from foreign market research. This product is comparable to 
the products exported to the United States which serve as the basis for 
EP.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of CTL plate in the 
home market were made at prices below the COP, within the meaning of 
section 773(b) of the Act, and requested that the Department conduct a 
country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses, and packing expenses. To calculate COM, the petitioners 
relied upon their own production experience, adjusted for known 
differences between costs incurred to produce CTL plate in the United 
States and in Italy using market research and publicly available data.
    To calculate SG&A and financial expenses, the petitioners relied 
upon the 1997 financial statements of an Italian steel producer. Based 
upon the comparison of the adjusted price of the foreign like product 
in the home market to the calculated COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made below the COP, within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners also based NV for sales in Italy on CV. The petitioners 
calculated CV using the same COM, SG&A and financial expense figures 
used to compute Italian home market costs. Consistent with section 
773(e)(2) of the Act, the petitioners also added to CV an amount for 
profit. Profit was based upon the aforementioned Italian producer's 
1997 financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
CV compared to U.S. price offers (39.55 to 93.30 percent); and (2) CV 
compared to AUV (30.75 to 89.72 percent).

Japan

    The petitioners identified Kawasaki Steel Corporation (Kawasaki), 
Kobe Steel, Ltd. (Kobe Steel), Nippon Steel Corporation (Nippon Steel), 
NKK Corporation (NKK), and Sumitomo Metal Industries, Ltd. (Sumitomo) 
as exporters of CTL plate from Japan. The petitioners further 
identified these exporters as the only Japanese producers known to the 
petitioners to have exported the subject merchandise from Japan. The 
petitioners based EP on a price offering to unaffiliated purchasers in 
the United States. The petitioners made deductions from EP for U.S. 
port charges (from a U.S. freight forwarder); CIF charges, including 
ocean freight and insurance (from official U.S. import statistics); 
duties (from the HTSUS), foreign movement charges (from foreign market 
research), and a Japanese trading company mark-up (from foreign market 
research).
    With respect to NV, the petitioners obtained, from foreign market 
research, home market delivered prices from Nippon Steel, NKK, 
Kawasaki, and Sumitomo for a product similar to that for which the U.S. 
price quote was obtained. Based on the terms of the home market sales, 
the petitioners deducted foreign movement charges (obtained from 
foreign market research) from the home market prices. The petitioners 
also adjusted home market prices for differences in packing and credit 
expenses in the U.S. and Japanese markets (obtained from foreign market 
research), and for differences in the merchandise for which the U.S. 
and Japanese price quotes were obtained, based on their own production 
experience, adjusted for known differences between costs incurred to 
produce CTL plate in the United States and in Japan (obtained from 
market research and publicly available data).
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of CTL plate in the 
home market were made at prices below the COP, within the meaning of 
section 773(b) of the Act, and requested that the Department conduct a 
country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses, and packing expenses. To calculate COM, the petitioners 
relied upon their own production experience, adjusted for known 
differences between costs incurred to produce CTL plate in the United 
States and in Japan using market research and publicly available data.
    To calculate SG&A and financial expenses, the petitioners relied 
upon the 1997/1998 financial statements of the Japanese steel 
producers. Based upon the comparison of the adjusted prices of the 
foreign like product in the home market to the calculated COP of the 
product, we find reasonable grounds to believe or suspect that sales of 
the foreign like product were made below the COP, within the meaning of 
section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is 
initiating a country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners also based NV for sales in Japan on CV. The petitioners 
calculated CV using the same COM, SG&A and financial expense figures 
used to compute Japanese home market costs. Consistent with section 
773(e)(2) of the Act, the petitioners also added to CV an amount for 
profit. Profit was based upon the aforementioned Japanese producers' 
1997/1998 financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
HMP compared to U.S. price offers (3.06 to 3.44 percent); and (2) CV 
compared to U.S. price (56.24 to 59.12 percent).

Republic of Korea

    The petitioners identified Daekyung Corporation, Dongkuk Steel Mill 
Co., Ltd., Korea Iron & Steel (KISCO), and Pohang Iron and Steel Co 
Ltd. (POSCO) as possible exporters of CTL plate from Korea. The 
petitioners based EP on U.S. price offerings for the subject 
merchandise in the United States. The petitioners made deductions from 
EP for CIF charges, including ocean freight and insurance (from 
official U.S. import statistics); and duties (from the HTSUS).
    In addition, the petitioners provided, as a second basis for EP, 
the AUV for three of the HTSUS categories accounting for the largest 
volume of imports from Korea during the first eleven months of 1998, 
the most current data available. The petitioners maintain that the 
products within these categories, while representing a range of sizes, 
are nevertheless indicative of average pricing because the products 
within these categories represent the largest volume commercial 
products. The petitioners also maintain that the values for CTL plate 
in the IM-145 approximate the FOB price of the merchandise, packaged 
and ready for delivery at the foreign port (see 19 USC section 1401a 
and 19 CFR 152.101).
    With respect to NV, the petitioners provided home market prices for 
common grades and sizes of CTL plate obtained from foreign market 
research. These products are comparable to the products exported to the 
United States which serve as the basis for EP.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of CTL plate in the 
home market were made at prices below the COP, within the meaning of 
section 773(b) of the Act, and requested that the Department

[[Page 12965]]

conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses, and packing. To calculate COM, the petitioners relied 
upon their own production experience, adjusted for known differences 
between costs incurred to produce CTL plate in the United States and in 
Korea using publicly available data.
    To calculate SG&A and financial expenses, the petitioners relied 
upon the 1997 audited financial statements of a Korean steel producer. 
Based upon the comparison of the adjusted prices of the foreign like 
product in the home market to the calculated COP of the product, we 
find reasonable grounds to believe or suspect that sales of the foreign 
like product were made below the COP, within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners also based NV for sales in Korea on CV. The petitioners 
calculated CV using the same COM, SG&A and financial expense figures 
used to compute Korean home market costs. Consistent with section 
773(e)(2) of the Act, the petitioners also added to CV an amount for 
profit. Profit was based upon the aforementioned Korean producer's 1997 
financial statements.
    The petitioners provided estimated dumping margins in two ways: (1) 
CV to U.S. price offers (14.57 to 63.00 percent); and (2) CV to AUV 
(1.26 to 34.91 percent).

The Former Yugoslav Republic of Macedonia

    The petitioners identified Rudnici i Zelezara Skopje (Makstil) as 
the sole CTL plate producer in FYR Macedonia. The petitioners based EP 
on U.S. price offerings for the sale of the subject merchandise in the 
United States. The petitioners made deductions from EP for CIF charges, 
including ocean freight and insurance (from official U.S. import 
statistics); and duties (from official U.S. import statistics).
    In addition, the petitioners provided, as a second basis for EP, 
the AUV for two of the HTSUS categories accounting for all imports of 
CTL plate from FYR Macedonia during the first eleven months of 1998, 
the most current data available. The petitioners maintain that the 
products within these categories, while representing a range of sizes, 
are nevertheless indicative of average pricing because the products 
within these categories represent the largest volume commercial 
products. The petitioners also maintain that the values for CTL plate 
in the IM-145 approximate the FOB price of the merchandise, packaged 
and ready for delivery at the foreign port (see 19 USC section 1401a 
and 19 CFR 152.101).
    With respect to NV, the petitioners stated that despite significant 
efforts, they were unable to obtain any home market or third country 
market prices for sales of Macedonian CTL plate. The petitioners 
instead calculated the weighted-average CIF export price of CTL plate 
from FYR Macedonia to Germany, France and Italy, for the period January 
through August 1998, based on publicly available data. The petitioners 
identified these three European countries as likely to represent 
significant export markets for Macedonian CTL plate because they are 
three large, steel-consuming markets that are geographically proximate 
to FYR Macedonia. Because the petitioners had no information pertaining 
to international freight and insurance charges within Europe, no 
adjustment was made to the CIF export price for those charges.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of Macedonian CTL 
plate in the above-specified third-country markets were made at prices 
below the COP, within the meaning of section 773(b) of the Act, and 
requested that the Department conduct a country-wide sales-below-cost 
investigation. Pursuant to section 773(b)(3) of the Act, COP consists 
of COM, SG&A, and packing expenses. To calculate COM, the petitioners 
relied upon their own production experience during the period January 
through September 1998, adjusted for known differences between the 
costs incurred to produce CTL plate in the United States and in FYR 
Macedonia using publicly available data.
    To calculate SG&A and financial expenses, the petitioners stated 
that they conducted extensive research efforts to obtain the financial 
statements of the Macedonian CTL producer or any other steel-related 
producer in FYR Macedonia without success. Therefore, they relied upon 
their own experience during 1998 to calculate these expenses. While it 
is the Department's practice, under section 773(e)(2)(A) of the Act, to 
calculate general expenses (and profit) in connection with the 
production and sale of a foreign like product, in the ordinary course 
of trade, for consumption in the foreign country (i.e., country of 
manufacture), such information was not reasonably available to the 
petitioners or to the Department in this case. Therefore, we have 
accepted the petitioners' calculation methodology for purposes of 
initiating this investigation.
    Based upon the comparison of the weighted-average export price of 
the foreign like product in third countries to the calculated COP of 
the product, we find reasonable grounds to believe or suspect that 
sales of the foreign like product were made below the COP, within the 
meaning of section 773(b)(2)(A)(i) of the Act. We also note that in 
this case, making no adjustment to COP for general expenses would still 
result in sales below cost. Accordingly, the Department is initiating a 
country-wide cost investigation.
    Because the third-country export price used in the petition was 
below the calculated COP, pursuant to sections 773(a)(4), 773(b), and 
773(e) of the Act, the petitioners based NV on CV. The petitioners 
calculated CV using the same methodology as that described above for 
third country COP. Consistent with section 773(e)(2) of the Act, the 
petitioners also added to CV an amount for profit which they based on 
their own experience. As noted above, while it is the Department's 
practice, under section 773(e)(2)(A) of the Act, to calculate general 
expenses and profit in connection with the production and sale of a 
foreign like product, in the ordinary course of trade, for consumption 
in the foreign country (i.e., country of manufacture), such information 
was not reasonably available to the petitioners or to the Department in 
this case. Therefore, we have accepted the petitioners' calculation 
methodology for purposes of initiating this investigation. We also note 
that in this case, making no adjustment to CV for general expenses and 
profit would still result in significant margins when CV is compared to 
EP.
    The petitioners provided estimated dumping margins in two ways: (1) 
CV compared to U.S. price offers (44.24 to 119.42 percent); and (2) CV 
compared to AUV (22.95 to 34.97 percent).

Initiation of Cost Investigations

    Pursuant to section 773(b) of the Act, the petitioners provided 
information demonstrating reasonable grounds to believe or suspect that 
sales in the home markets of France, India, Indonesia, Italy, Japan, 
Korea, and sales in third countries for FYR Macedonia were made at 
prices below the fully allocated COP and, accordingly, requested that 
the Department conduct country-wide sales-below-COP investigations in 
connection with the requested antidumping investigations in France, 
India, Indonesia, Italy, Japan, Korea, and FYR Macedonia. The Statement 
of

[[Page 12966]]

Administrative Action (SAA), submitted to the Congress in connection 
with the interpretation and application of the URAA, states that an 
allegation of sales below COP need not be specific to individual 
exporters or producers. SAA, H.R. Doc. No. 316 at 833 (1994). The SAA, 
at 833, states 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.''
    Further, the SAA provides that ``new section 773(b)(2)(A) retains 
the current requirement that Commerce 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.'' Id. Based upon the 
comparison of the adjusted prices from the petitions for the 
representative foreign like products to their costs of production, we 
find the existence of ``reasonable grounds to believe or suspect'' that 
sales of these foreign like products in France, India, Indonesia, 
Italy, Japan, Korea, and FYR Macedonia were made below their respective 
COPs within the meaning of section 773(b)(2)(A)(i) of the Act. 
Accordingly, the Department is initiating the requested country-wide 
cost investigations (see country-specific sections above).

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of CTL plate from the Czech Republic, France, 
India, Indonesia, Italy, Japan, Korea, and FYR Macedonia are being, or 
are likely to be, sold at less than fair value.

Critical Circumstances

    The petitioners have alleged that critical circumstances exist with 
respect to imports of subject merchandise from the Czech Republic, 
Indonesia, Japan, and FYR Macedonia. The petitioners have supported 
their allegations with the following information. For the Czech 
Republic and FYR Macedonia, the petitioners state that there is a 
history of injurious dumping because Canada has imposed antidumping 
measures on CTL plate from these countries. For Indonesia and Japan, 
the petitioners made alternative claims that the importers knew, or 
should have known, that CTL plate was being sold at less than normal 
value and that there was likely to be material injury by reason of such 
sales. Specifically, for both countries, the petitioners allege that 
the margins calculated in the petitions exceed the 25 percent threshold 
used by the Department to impute importer knowledge of dumping and the 
likelihood of material injury due to that dumping.
    The petitioners also have alleged that imports from the Czech 
Republic, Indonesia, Japan, and FYR Macedonia have been massive over a 
relatively short period. The petitioners allege that there was 
sufficient pre-filing notice of these antidumping petitions and that 
the Department should compare imports during June-August 1998 (base 
period) to imports during September-November 1998 (comparison period) 
for purposes of this determination. According to the import statistics 
contained in the petitions, for the periods June-August 1998 and 
September-November 1998, imports of CTL plate from the Czech Republic 
increased by 154 percent, imports from Indonesia increased by 15 
percent, imports from Japan increased by 294 percent, and imports from 
FYR Macedonia increased by 129 percent. Taking into consideration the 
foregoing, we find that the petitioners have alleged the elements of 
critical circumstances and supported them with information reasonably 
available.
    For these reasons, we are initiating critical circumstances 
investigations for the above-specified countries and will make 
preliminary determinations based on available information at the 
appropriate time, in accordance with section 733(e)(1) of the Act.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege 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 petitioners 
explained that the industry's injured condition is evident in the 
declining trends in net operating profits, net sales volumes, profit-
to-sales ratios, and capacity utilization. The allegations of injury 
and causation are supported by relevant evidence including U.S. Customs 
import data, lost sales, and pricing information. The Department 
assessed the allegations and supporting evidence regarding material 
injury and causation and determined that these allegations are 
supported by accurate and adequate evidence and meet the statutory 
requirements for initiation (see IA Initiation Checklist).

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on certain cut-to-
length carbon-quality steel plate and the petitioners' responses to our 
supplemental questionnaires clarifying the petitions, as well as our 
discussion with the authors of the foreign market research reports 
supporting the petitions on France, India, Indonesia, Italy, Japan, and 
Korea, and other measures undertaken to confirm the information 
contained in these reports (see IA Initiation Checklist), we have found 
that the petitions meet the requirements of section 732 of the Act. 
Therefore, we are initiating antidumping duty investigations to 
determine whether imports of certain cut-to-length carbon-quality steel 
plate products from the Czech Republic, France, India, Indonesia, 
Italy, Japan, Korea, and FYR Macedonia are being, or are likely to be, 
sold in the United States at less than fair value. Unless this deadline 
is extended, we will make our preliminary determinations no later than 
140 days after the date of this notice.

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 Czech Republic, France, India, Indonesia, Italy, 
Japan, Korea, and FYR Macedonia. 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 April 2, 1999, whether there is a 
reasonable indication that imports of certain cut-to-length carbon-
quality steel plate from the Czech Republic, France, India, Indonesia, 
Italy, Japan, Korea, and FYR Macedonia are causing material injury, or 
threatening to cause material injury, to a U.S. industry. A negative 
ITC determination for any country will result in the investigation 
being terminated with respect to that country; otherwise, these 
investigations will proceed according to statutory and regulatory time 
limits.
    This notice is published pursuant to section 777(i) of the Act.


[[Page 12967]]


    Dated: March 8, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-6293 Filed 3-15-99; 8:45 am]
BILLING CODE 3510-DS-P