[Federal Register Volume 64, Number 145 (Thursday, July 29, 1999)]
[Notices]
[Pages 41202-41206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19301]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-533-817]


Preliminary Determination of Sales at Less Than Fair Value: 
Certain Cut-To-Length Carbon-Quality Steel Plate Products From India

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

EFFECTIVE DATE: July 29, 1999.


[[Page 41203]]


FOR FURTHER INFORMATION CONTACT: James Terpstra, Timothy Finn, or Lyman 
Armstrong, Office 4, Group II, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3965, (202) 482-0065, and (202) 482-3601, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Round Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all references are made to the Department's 
regulations at 19 CFR Part 351 (1998).

Preliminary Determination

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

Case History

    Since the initiation of this investigation (Notice of Initiation of 
Antidumping Investigations: Certain Cut-To-Length Carbon-Quality Steel 
Plate from Czech Republic, France, India, Indonesia, Italy, Japan, 
Republic of Korea, and Former Yugoslav Republic of Macedonia), 64 FR 
12959 ( March 16, 1999) (``Initiation Notice''), the following events 
have occurred:
    In their petition, the petitioners 1 identified the 
Steel Authority of India (``SAIL'') as the sole exporter of CTL plate 
from India. Based on the petition and information provided by the U.S. 
embassy in New Delhi indicating that SAIL was the sole exporter of 
subject merchandise from January 1, 1998 through December 31, 1998, the 
period of investigation (``POI''), we issued an antidumping 
questionnaire to SAIL on March 17, 1999.2
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    \1\ The petitioners are Bethlehem Steel Corporation, Gulf States 
Steel, Inc., IPSCO Steel Inc., Tuscaloosa Steel Corporation, the 
United Steelworkers of America, and the U.S. Steel Group (a unit of 
USX Corporation).
    \2\ Section A of the questionnaire requested general information 
concerning the company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the sales of 
that merchandise in all markets. Sections B and C of the 
questionnaire requested home market sales listings and U.S. sales 
listings. Section D of the questionnaire requested information 
regarding the cost of production of the foreign like product and the 
constructed value of the merchandise under investigation. Section E 
of the questionnaire requested information regarding the cost of 
further manufacture or assembly performed in the United States.
---------------------------------------------------------------------------

    In April 1999, the United States International Trade Commission 
(``ITC'') issued an affirmative preliminary injury determination in 
this case (see ITC Investigation No. 731-TA-815-822).
    Between April 12, and May 11, 1999, SAIL submitted responses to all 
applicable sections of the questionnaire. On May 20, 1999, SAIL 
submitted certain clarifications which supplemented its Section A 
response.
    On May 24, 1999, petitioners submitted comments regarding SAIL's 
questionnaire responses, and on May 27, 1999, we issued a supplemental 
questionnaire covering Sections A-D of SAIL's response.
    On June 1, 1999, petitioners submitted additional comments on 
SAIL's April 12, 1999 and May 10, 1999 questionnaire responses.
    On June 3 and 8, 1999, SAIL submitted certain clarifications 
supplementing SAIL's May 10, 1999 response.
    On June 11, 1999, we issued a further supplemental questionnaire 
covering Sections A-C of SAIL's questionnaire response.
    On June 16, 1999, SAIL submitted a revised electronic database. See 
also Facts Available section below.
    On June 18, 1999, we issued a further supplemental questionnaire 
concerning SAIL's Section D response, which SAIL had supplemented on 
June 8, 1999. Also on June 18, 1999, SAIL submitted certain data 
supplementing its previous submissions.
    On June 29, 1999, SAIL made three submissions. The first two 
submissions were due on June 28 and responded to the Department's 
letter of June 18, 1999 to SAIL. The third submission responded to the 
Department's May 27, 1999 supplemental questionnaire, which was due 
June 18, 1999. On July 2, 1999, we returned all three of these 
submissions to SAIL as untimely. See also the Facts Available section 
below.
    On July 6, 1999, petitioners submitted comments regarding 
deficiencies in SAIL's questionnaire responses.
    Finally, on July 12, 1999, we issued a letter to SAIL providing it 
with a final opportunity to submit a reliable electronic database and 
information on product-specific costs. On July 16, 1999, SAIL provided 
this information. See also Facts Available section below.

Facts Available

    We have determined that the use of facts available is appropriate 
for SAIL for purposes of this preliminary determination. Although SAIL 
filed a questionnaire response, it contained numerous errors. Moreover, 
because of the problems with the electronic databases that SAIL 
submitted, its questionnaire response cannot be used to calculate a 
reliable margin at this time. Section 776(a)(2)(B) of the Act provides 
that the administering authority shall use facts otherwise available 
when an interested party ``fails to provide such information by the 
deadlines for the submission of the information or in the form and 
manner requested.'' Therefore, the use of facts available is warranted 
in this case.
    Section 776(b) of the Act provides that adverse inferences may be 
used in selecting from the facts available if a party has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information. As explained in more detail below, SAIL was 
provided with numerous opportunities and (effective) extensions of time 
to fully respond to the Department's original and supplemental 
questionnaires. However, even with several opportunities to remedy 
problems, SAIL failed to provide, inter alia, a reliable electronic 
database. Therefore, the Department preliminarily finds that SAIL did 
not act to the best of its ability to provide the information 
requested. As a consequence, we have used an adverse inference in 
selecting the facts available to determine SAIL's margin.
    As we discuss below, there are three inter-related problems with 
SAIL's questionnaire response: (1) technical errors in its electronic 
databases; (2) lateness and incompleteness of certain narrative 
portions of its questionnaire response; and (3) the lack of product-
specific costs. However, our decision to use facts available for the 
preliminary determination is based primarily on our inability to use 
the electronic databases that SAIL submitted.
    The problems with the electronic databases began with SAIL's first 
electronic submission which was formatted incorrectly and was 
substantially incomplete. As much of the underlying problems with these 
data involve proprietary information, there is a detailed discussion of 
these problems in a Memorandum to the File regarding Problems with 
SAIL's Questionnaire Response, dated July 19, 1999 (``SAIL memo''). 
From the time these electronic databases were submitted on May 11, 
1999, until the submission of its revised electronic tapes on July 16, 
1999, the Department repeatedly requested that SAIL revise and correct 
various sections of these databases. However, SAIL never

[[Page 41204]]

resolved all of the ongoing technical problems to a point where the 
databases could be used reliably in our preliminary determination. SAIL 
argued that it is a large, decentralized steel producer with 3 plants, 
6 regional sales offices, and 42 local service centers which is not 
fully automated, making the preparation of consolidated electronic 
databases extremely difficult. On July 12, 1999, we gave SAIL one final 
opportunity to supply reliable electronic databases to the Department.
    Furthermore, certain portions of SAIL's original questionnaire 
response were substantially incomplete. Throughout its original 
response, SAIL either failed to provide information, or stated that 
certain information would be submitted at a later date, effectively 
granting itself an extension of time for the submission of factual 
information. After several such submissions, we returned SAIL's 
information as untimely. See our letter of July 2, 1999. Although we 
have issued several supplemental questionnaires and SAIL responded to 
them, we have been unable to evaluate adequately the firm's selling 
practices because of problems with the electronic databases discussed 
above. On July 16, 1999 SAIL submitted one final electronic database. 
We intend to issue a final supplemental questionnaire to SAIL after 
reviewing this electronic data.
    Regarding the lack of product-specific costs, SAIL claims that its 
cost accounting records do not track costs on the product-specific 
basis required by the questionnaire. Instead, SAIL records cost on a 
more aggregated level. However, in its questionnaire response, SAIL 
reported different costs for different products using certain cost 
allocations. SAIL claimed that the allocation method it used was the 
only one available given the limitations of its accounting system. 
However, it is not clear whether SAIL's reported costs are reliable for 
margin calculation purposes, or that they are based on the most 
reasonable method available from its accounting records. Because a 
decision on this issue necessarily requires a detailed analysis of 
SAIL's accounting system, we have determined that it is necessary to 
examine this issue exhaustively at verification. See also the SAIL memo 
for a more detailed discussion.
    For the preliminary determination, we assigned SAIL the average of 
the margins in the petition, which is 58.50 percent. Although we find 
that SAIL did not fully cooperate to the best of its ability, SAIL 
tried to provide the Department with the data requested in the 
antidumping questionnaire. Recognizing SAIL's attempts to respond to 
the Department's information requests, and in light of its claimed 
difficulties, we do not believe that it is appropriate to assign the 
highest margin alleged in the petition at this time. See e.g., Krupp 
Stahl AG v. U.S., 822 F. Supp. 789, 793 (Court of International Trade 
1993), which referenced a Court of Appeals' opinion sanctioning the 
Department's practice of taking into account the level of respondent's 
cooperation, and Notice of Final Determination of Sales at Less Than 
Fair Value: Steel Wire Rod from Germany, 63 FR 8953, 8955 (February 23, 
1998).)
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' such as the petition, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources reasonably at the Department's disposal. The 
Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 
103-316, (1994) (hereinafter, the ``SAA'') states that ``corroborate'' 
means to determine that the information used has probative value. See 
SAA at 870.
    In accordance with section 776(c) of the Act, we sought to 
corroborate the data contained in the petition. We reviewed the 
adequacy and accuracy of the information in the petition during our 
pre-initiation analysis of the petition, to the extent appropriate 
information was available for this purpose (e.g., import statistics and 
foreign market research reports). See Initiation Notice.
    For purposes of the preliminary determination, we attempted to 
corroborate the information in the petition. The petition margins were 
based on both price-to-price and price-to-constructed value 
comparisons. Petitioners calculated export price was based on U.S. 
price offerings, with deductions taken for international movement 
charges. We compared this with information from U.S. Customs and found 
them consistent. Petitioners based normal value on prices for 
comparable products sold in the home market obtained from market 
research. Petitioners calculated constructed value based on their own 
production experience adjusted for known differences. We compared the 
petition information with reliable information obtained during the 
investigation, primarily SAIL's financial statements and other 
published materials from the questionnaire response and found them 
consistent. Given the problems with the data submitted by SAIL, as 
discussed above, this was the only information in the questionnaire 
response that was reliable for these purposes, the actual reported 
prices and costs being difficult to adequately evaluate at this time. 
Consequently, we find that information in the petition continues to be 
of probative value. See Corroboration Memo, July 19, 1999.

Scope of Investigation

    The products covered by the scope of this investigation 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

[[Page 41205]]

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.

Scope Comments

    As stated in our notice of initiation, we set aside a period for 
parties to raise issues regarding product coverage. In particular, we 
sought comments on the specific levels of alloying elements set out in 
the description below, the clarity of grades and specifications 
excluded from the scope, and the physical and chemical description of 
the product coverage.
    On March 29, 1999, Usinor, a respondent in the French antidumping 
and countervailing duty investigations and Dongkuk Steel Mill Co., Ltd. 
and Pohang Iron and Steel Co., Ltd., respondents in the Korean 
antidumping and countervailing duty investigations (collectively the 
Korean respondents), filed comments regarding the scope of the 
investigations on CTL plate and the Department's model matching 
criteria. On April 14, 1999, the petitioners filed comments regarding 
Usinor's and the Korean respondents' comments regarding model matching. 
In addition, on May 17, 1999, ILVA S.p.A. (ILVA), a respondent in the 
Italian antidumping and countervailing duty investigations, requested 
guidance on whether certain products are within the scope of these 
investigations.
    Usinor requested that the Department modify the scope to exclude: 
(1) plate that is cut to non-rectangular shapes or that has a total 
final weight of less than 200 kilograms; and (2) steel that is 4'' or 
thicker and which is certified for use in high-pressure, nuclear or 
other technical applications; and (3) floor plate (i.e., plate with 
``patterns in relief'') made from hot-rolled coil. Further, Usinor 
requested that the Department provide clarification of scope coverage 
with respect to what it argues are over-inclusive HTSUS subheadings 
included in the scope language.
    The Department has not modified the scope of these investigations 
because the current language reflects the product coverage requested by 
the petitioners, and Usinor's products meet the product description. 
With respect to Usinor's clarification request, we do not agree that 
the scope language requires further elucidation with respect to product 
coverage under the HTSUS. As indicated in the scope section of every 
Department antidumping and countervailing duty proceeding, the HTSUS 
subheadings are provided for convenience and Customs purposes only; the 
written description of the merchandise under investigation or review is 
dispositive.
    The Korean respondents requested confirmation whether the maximum 
alloy percentages listed in the scope language are definitive with 
respect to covered HSLA steels.
    At this time, no party has presented any evidence to suggest that 
these maximum alloy percentages are inappropriate. Therefore, we have 
not adjusted the scope language. As in all proceedings, questions as to 
whether or not a specific product is covered by the scope and, hence, 
must be reported, should be timely raised with Department officials.
    ILVA requested guidance on whether certain merchandise produced 
from billets is within the scope of the current CTL plate 
investigations. According to ILVA, the billets are converted into wide 
flats and bar products (a type of long product). ILVA notes that one of 
the long products, when rolled, has a thickness range that falls within 
the scope of these investigations. However, according to ILVA, the 
greatest possible width of these long products would only slightly 
overlap the narrowest category of width covered by the scope of the 
investigations. Finally, ILVA states that these products have different 
production processes and properties than merchandise covered by the 
scope of the investigations and therefore are not covered by the scope 
of the investigations.
    As ILVA itself acknowledges, the particular products in question 
appear to fall within the parameters of the scope and, therefore, we 
are preliminarily treating them as covered merchandise.

Period of Investigation

    The period of investigation is January 1, 1998 through December 31, 
1998.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information determined to be acceptable for use in making our final 
determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports of subject 
merchandise that are entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register.
    We will instruct the Customs Service to require a cash deposit or 
the posting of a bond equal to the weighted-average margin, as 
indicated in the chart below. We will adjust the deposit requirements 
to account for any export subsidies found in the companion 
countervailing duty investigation. These suspension of liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

------------------------------------------------------------------------
                                                             Weighted-
                  Exporter/manufacturer                   average margin
                                                            percentage
------------------------------------------------------------------------
SAIL....................................................           58.50
All Others \3\..........................................          58.50
------------------------------------------------------------------------
\3\ The Act normally prohibits inclusion in the ``All Others'' rate of
  any margins determined entirely on the basis of facts available,
  pursuant to section 776. Where the estimated weighted-average margin
  (s) is based entirely on facts available, we must use any reasonable
  method to establish the estimated ``All Others'' rate for exporters
  and producers nor individually investigated. See section
  733(d)(1)(ii); 735(c)(5)(B). In this case, we have determined that the
  only reasonable method is to use the 58.50 percent simple average of
  the margins alleged in the petition which was also the source of our
  facts available margin for SAIL.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final

[[Page 41206]]

determination is affirmative, the ITC will determine before the later 
of 120 days after the date of this preliminary determination or 45 days 
after our final determination whether these imports are materially 
injuring, or threaten material injury to, the U.S. industry.

Public Comment

    Case briefs or other written comments in at least ten copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than August 25, 1999, and rebuttal briefs no later than September 
1, 1998. A list of authorities used and an executive summary of issues 
should accompany any briefs submitted to the Department. Such summary 
should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, the hearing 
will be held on September 8, 1999, time and room to be determined, at 
the U.S. Department of Commerce, 14th Street and Constitution Avenue, 
NW, Washington, DC 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs. If 
this investigation proceeds normally, we will make our final 
determination by no later than 75 days after the date of this 
preliminary determination.
    This determination is issued and published pursuant to sections 
733(d) and 777(i)(1) of the Act.

    Dated: July 19, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-19301 Filed 7-28-99; 8:45 am]
BILLING CODE 3510-DS-P