[Federal Register Volume 65, Number 143 (Tuesday, July 25, 2000)]
[Notices]
[Pages 45754-45761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18809]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-433-808, A-822-804, A-570-860, A-560-811, A-588-855, A-580-844, A-
449-804, A-841-804, A-455-803, A-821-812, A-823-809, A-307-819]


Initiation of Antidumping Duty Investigations: Steel Concrete 
Reinforcing Bars From Austria, Belarus, Indonesia, Japan, Latvia, 
Moldova, the People's Republic of China, Poland, the Republic of Korea, 
the Russian Federation, Ukraine, and Venezuela

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

ACTION: Initiation of Antidumping Duty Investigations.

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EFFECTIVE DATE: July 25, 2000.

FOR FURTHER INFORMATION CONTACT: Charles Riggle or Tom Futtner at (202) 
482-0650 and (202) 482-3814, respectively; 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 (2000).

The Petitions

    On June 28, 2000, the Department of Commerce (the Department) 
received petitions filed in proper form by the Rebar Trade Action 
Coalition (RTAC), as well as its individual members \1\ (hereinafter 
collectively, the petitioner). RTAC is an ad hoc trade association, the 
members of which are producers of the domestic like product in the 
alleged region. The Department received from RTAC information 
supplementing the petitions throughout the 20-day initiation period.
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    \1\ AmeriSteel; Auburn Steel Co., Inc.; Birmingham Steel Corp.; 
Border Steel, Inc.; Marion Steel Company; Riverview Steel; Nucor 
Steel and CMC Steel Group. Auburn Steel Co. is not a petitioner in 
the investigations involving rebar from Japan and Indonesia.
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    In accordance with section 732(b) of the Act, the petitioner 
alleges that imports of steel concrete reinforcing bars (rebar) from 
Austria, Belarus, Indonesia, Japan, the Republic of Korea (Korea), 
Latvia, Moldova, the People's Republic of China (the PRC), Poland, the 
Russian Federation (Russia), Ukraine, and Venezuela 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 petitioner filed these petitions on 
behalf of the domestic industry because it is an interested party as 
defined in section 771(9)(C) of the Act and has demonstrated sufficient 
industry support with respect to each of the antidumping investigations 
that it is requesting the Department to initiate (see the following 
section below).

Determination of Industry Support for the Petitions

    The petitioner alleges that there is a regional industry for the 
domestic like product and included data for both factors required by 
section 771(4)(C) of the Act: (1) The producers within such market sell 
all or almost all of their production of the like product in question 
in the regional market; and (2) the demand in the regional market is 
not supplied, to any substantial degree, by producers located elsewhere 
in the United States.\2\ Moreover, the petitioner included data 
supporting its allegation that there is a concentration of dumped

[[Page 45755]]

imports from the subject countries in the region, pursuant to section 
771(4)(C) of the Act.\3\ We have examined the accuracy and adequacy of 
the information supporting the regional industry claim to determine 
whether the petitioner provided evidence, reasonably available to it, 
sufficient to justify initiation based on a regional industry analysis. 
We determined the accuracy and adequacy of the petitioner's data by 
comparing the petition information with publicly available data. On 
this basis, we have determined that the petitioner satisfied the 
statutory requirements for initiation purposes. See Initiation 
Checklist, dated July 18, 2000 (Initiation Checklist), which is on file 
in Import Administration's Central Records Unit.
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    \2\ The region identified by the petitioner consists of Alabama, 
Arkansas, Connecticut, Delaware, the District of Columbia, Florida, 
Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, 
Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New 
York, North Carolina, Ohio, Pennsylvania, Puerto Rico, Rhode Island, 
South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, 
and Wisconsin.
    \3\ To date, the International Trade Commission has not 
considered the issue of whether to cumulatively assess the volume 
and effect of imports under section 771(7)(G)(i) of the Act in a 
regional industry case, where the petition alleges dumping of 
imports from more than one country. As a result, this case presents 
a novel question of whether to reach the cumulation issue before 
determining whether the subject imports were sufficiently 
concentrated within the alleged region, or whether to consider the 
concentration issue for each individual country, pursuant to section 
771(4)(C) of the Act. Either method is a plausible interpretation of 
the statute. For purposes of these initiations, in our analysis of 
whether subject imports were sufficiently concentrated under section 
771(4)(C) of the Act, we will accept the petitioner's allegation of 
injury based on the cumulative assessment of the volume and value of 
imports under section 771(7)(G)(i) of the Act.
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    If the petitioner alleges that the industry is a regional industry, 
the Department, on the basis of production in the region, shall 
determine whether the petition has been filed on behalf of the domestic 
industry by applying the requirements enunciated in section 
732(c)(4)(A) of the Act. This section of the Act provides that the 
Department's industry support determination, which is to be made before 
the initiation of the investigation, be based on whether a minimum 
percentage of the relevant regional industry supports the petition. 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 in the region; and (2) 
more than 50 percent of the production of the domestic like product in 
the region 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 U.S. 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 authorities. In addition, the Department's determination is 
subject to limitations of 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.\4\
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    \4\ 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 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 subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    The domestic like product referred to in the petitions is the 
single domestic like product defined in the ``Scope of Investigations'' 
section, below. No party has commented on the petitions' definition of 
the domestic like product, and there is nothing on the record to 
indicate that this definition is inaccurate. The Department, therefore, 
has adopted the domestic like product definition set forth in the 
petitions.
    Moreover, the Department has determined that the petitions contain 
adequate evidence of industry support; therefore, polling is 
unnecessary (see Initiation Checklist). For each petition filed, the 
petitioner established industry support representing over 50 percent of 
total production of the domestic like product in the region. 
Accordingly, the Department determines that these petitions are filed 
on behalf of the regional domestic industry within the meaning of 
section 732(b)(1) of the Act.\5\
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    \5\ We note that, even if the petitions did not allege a 
regional market for the subject merchandise, industry support for 
these petitions represents more than 50 percent of national 
production of the domestic like product.
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Scope of Investigations

    For purposes of these investigations, the product covered is all 
steel concrete reinforcing bars (rebar) sold in straight lengths, 
currently classifiable in the Harmonized Tariff Schedule of the United 
States (HTSUS) under item number 7214.20.00 or any other tariff item 
number. Specifically excluded are plain rounds (i.e., non-deformed or 
smooth bars) and rebar that has been further processed through bending 
or coating. HTSUS subheadings are provided for convenience and Customs 
purposes. The written description of the scope of this proceeding is 
dispositive.
    During our review of the petitions, we discussed the scope with the 
petitioner to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations (62 FR 27323), we are setting 
aside a period for parties to raise issues regarding product coverage. 
The Department encourages all parties to submit such comments by August 
18, 2000. 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.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations. The sources of data for the deductions 
and adjustments relating to home market price, U.S. price, and factors 
of production (FOP) are detailed in the Initiation Checklist. Where the 
petitioner obtained data from foreign market research, we spoke to the 
researcher to establish that person's credentials and to confirm the 
validity of the information being provided. Should the need arise to 
use any of this information as facts available under section 776 of the 
Act in our preliminary or final determinations, we may re-examine the 
information and revise the margin calculations, if appropriate.
    Regarding the investigations involving non-market economies (NME), 
the Department presumes, based on the extent of central government 
control in an NME, that a single dumping margin, should there be one, 
is appropriate for

[[Page 45756]]

all NME exporters in the given country. In the course of these 
investigations, all parties will have the opportunity to provide 
relevant information related to the issues of a country'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).

Austria

Export Price
    The petitioner based export price (EP) on the March 2000 unit value 
reported in the Bureau of the Census IM-145 data and calculated a net 
U.S. price by deducting from this value international freight, U.S. 
port charges, and customs duties paid.
Normal Value
    The petitioner based normal value (NV) on two methodologies. First, 
the petitioner provided an Austrian domestic price of high yield rebar 
obtained from an industry publication. However, because of the lack of 
specificity of the terms of sale associated with this price, we have 
not considered this value as a basis for NV. The petitioner also based 
NV on constructed value (CV), consisting of cost of manufacturing 
(COM), selling, general and administrative expenses (SG&A), profit, 
interest expense, depreciation, and packing. COM was calculated based 
on the average consumption rates of two U.S. rebar producers. The 
petitioner adjusted COM for known cost differences of the producers in 
the United States and Austria. To calculate SG&A and interest expense, 
the petitioner relied upon its own data because the Austrian producer's 
financial statements did not disclose these expenses. The petitioner 
derived profit based upon an Austrian rebar producer's 1998 financial 
statements.
    Based upon the comparison of CV to EP, the petitioner calculated an 
estimated dumping margin of 104.05 percent.

Belarus

Export Price
    The petitioner based EP on price quotes from Byelorussian Steel 
Works (BSW) to an unaffiliated U.S. purchaser for different sizes of 
rebar of the same grade and calculated a net U.S. price by deducting 
international freight and U.S. port charges.
Normal Value
    The petitioner alleges that Belarus is an NME country, and 
calculated NV based on the FOP methodology pursuant to section 773(c) 
of the Act. In accordance with section 771(18)(C) of the Act, any 
determination that a foreign country has at one time been considered an 
NME shall remain in effect until revoked. This status covers the 
geographic area of the former U.S.S.R., each part of which retains the 
NME status of the former U.S.S.R. Therefore, Belarus will be treated as 
an NME unless and until its NME status is revoked (see Preliminary 
Determination of Sales at Less Than Fair Value: Uranium from 
Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan, 57 
FR 23380 (June 3, 1992)).
    For NV, the petitioner based the FOP, as defined by section 
773(c)(3) of the Act, on the consumption rates of two U.S. rebar 
producers. The petitioner asserts that information regarding BSW's 
consumption rates is not available, and that the consumption rates of 
the two U.S. producers are typical of the global steel industry. Based 
on the information provided by the petitioner, we believe that the 
petitioner's FOP methodology represents information reasonably 
available to the petitioner and is appropriate for purposes of 
initiating this investigation.
    The petitioner asserts that Thailand is the most appropriate 
surrogate country for Belarus, claiming that Thailand is: (1) A market 
economy; (2) a significant producer of comparable merchandise; and (3) 
at a level of economic development comparable to Belarus in terms of 
per capita GNP. Based on the information provided by the petitioner, we 
believe that the petitioner's use of Thailand as a surrogate country is 
appropriate for purposes of initiating this investigation.
    In accordance with section 773(c)(4) of the Act, the petitioner 
valued FOP, where possible, on reasonably available, public surrogate 
country data from Thailand. Values for scrap steel and the scrap offset 
were based on Thai import prices listed in TradStat Import/Exports 
Report for the period October 1999 through March 2000. The value for 
electricity was obtained from the International Energy Agency's Energy 
Prices & Taxes, Fourth Quarter 1999. The natural gas value was taken 
from Coal and Natural Gas Competition in APEC Economies, August 1999. 
Labor was valued using the Department's regression-based wage rate for 
Belarus, in accordance with 19 CFR 351.408(c)(3).
    The petitioner valued other production costs, for which no Thai 
surrogate values were available, with values from the two U.S. 
producers. All surrogate values that fell outside the anticipated 
period of investigation (POI), which in the NME cases was October 1, 
1999 through March 31, 2000, were adjusted for inflation. For 
electricity, we recalculated the inflator using the wholesale price 
index. To determine depreciation, SG&A, interest expenses, and profit, 
the petitioner relied on the data from a 1999 annual report of 
Sahaviriya Steel Industries Public Company Limited, a Thai steel 
producer. Based on the information provided by the petitioner, we 
believe that the surrogate values represent information reasonably 
available to the petitioner and are acceptable for purposes of 
initiating this investigation.
    Based on comparisons of EP to NV, the petitioner calculated 
estimated dumping margins ranging from 49.06 to 56.48 percent.

Indonesia

Export Price
    The petitioner based EP on price quotes from PT Jakarta Kyoei Steel 
Works Ltd. (Jakarta Kyoei) to an unaffiliated U.S. purchaser for 
different grades and sizes of rebar, and calculated a net U.S. price by 
deducting foreign inland frieght, international freight, and Indonesian 
and U.S. port charges.
Normal Value
    With respect to NV, the petitioner provided a home market price 
that was obtained from foreign market research for a grade and size of 
rebar that is comparable to those of the products exported to the 
United States which serve as the basis for EP. The petitioner states 
that the home market price quotation was FOB mill and did not make any 
deductions from this price.
    Although the petitioner provided a margin based on a price-to-price 
comparison, it also provided information demonstrating reasonable 
grounds to believe or suspect that sales of rebar in the home market 
were made at prices below the fully absorbed 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, and packing. The petitioner calculated COM based on the 
consumption rates of a U.S. rebar producer. The petitioner adjusted COM 
for known differences in the production process used by producers in 
the United States and Indonesia. To calculate depreciation and SG&A, 
the petitioner relied upon amounts reported in Jakarta Kyoei's 1998 
financial statements. For interest

[[Page 45757]]

expense, the petitioner used Jakarta Kyoei's 1997 financial statements, 
explaining that the 1998 interest expenses were unreasonably high as a 
result of the financial crisis.
    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. See the Initiation of 
Cost Investigations section below.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioner also based NV for sales in Indonesia on CV. The petitioner 
calculated CV using the same COM, depreciation, SG&A, and interest 
expense figures used to compute Indonesian home market costs. 
Consistent with section 773(e)(2) of the Act, the petitioner included 
in CV an amount for profit. However, the profit amounted to zero 
because Jakarta Kyoei reported a loss on its 1998 financial statements. 
See, e.g., Initiation of Antidumping Duty Investigations: Certain Cold-
Rolled Flat-Rolled Carbon-Quality Steel Products From Argentina, 
Brazil, the People's Republic of China, Indonesia, Japan, the Russian 
Federation, Slovakia, South Africa, Taiwan, Thailand, Turkey, and 
Venezuela, 64 FR 34194, 34202 (June 25, 1999) (Petitioners added to CV 
no amount for profit, because the Thai steel producer reported a loss 
in its 1998 financial statements).
    Based upon the comparison of CV to EP, the petitioner has 
calculated an estimated dumping margin of 71.01 percent.

Japan

Export Price
    The petitioner based EP on a price quote from Kyoei Steel Ltd. 
(Kyoei), to an unaffiliated U.S. purchaser for two grades and sizes of 
rebar, and calculated a net U.S. price by deducting foreign inland 
freight, international freight, U.S. port charges, and customs duties 
paid.
Normal Value
    With respect to NV, the petitioner provided a home market price 
that was obtained from foreign market research for grades and sizes of 
rebar that are comparable to the products exported to the United States 
which serve as the basis for EP. The petitioner calculated an ex-
factory NV by deducting from the quoted home market price foreign 
inland freight and home market credit expense.
    Although the petitioner provided a margin based on a price-to-price 
comparison, it also provided information demonstrating reasonable 
grounds to believe or suspect that sales of rebar in the home market 
were made at prices below the fully absorbed 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, interest expenses, and packing. The petitioner calculated COM 
based on the consumption rates of a U.S. rebar producer. The petitioner 
adjusted COM for known differences in the production process used by 
producers in the United States and Japan. To calculate depreciation, 
SG&A, and interest expenses, the petitioner relied upon the 1999 
financial statements of Tokyo Steel Manufacturing Company (Tokyo Steel) 
because it was unable to locate public financial statements for Kyoei. 
Based upon the comparison of the 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. See the Initiation of Cost 
Investigations section below.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioner also based NV for sales in Japan on CV. The petitioner 
calculated CV using the same COM, depreciation, SG&A, and interest 
expense figures used to compute Japanese home market costs. Pursuant to 
section 773(e)(2) of the Act, the petitioner included in CV an amount 
for profit. However, the profit amounted to zero because Tokyo Steel 
reported a loss on its 1998 financial statement.
    Based upon the comparison of CV to EP, the petitioner has 
calculated an estimated dumping margin of 188.79 percent.

Latvia

Export Price
    The petitioner based EP on a price quote from Liepaja Metalurgs 
(Liepaja) to an unaffiliated U.S. purchaser for different grades and 
sizes of rebar, and calculated a net U.S. price by deducting 
international freight and Latvian and U.S. port charges.
Normal Value
    The petitioner alleges that Latvia is an NME country, and 
calculated NV based on the FOP methodology pursuant to section 773(c) 
of the Act. For the reasons described above for Belarus, Latvia will be 
treated as an NME unless and until its NME status is revoked.
    Given that information regarding Liepaja's consumption rates is not 
available, NV was calculated using the same methodology described above 
for Belarus. Further, Thailand was used as the surrogate country. We 
believe that Thailand is an appropriate surrogate for purposes of 
initiating this case with respect to Latvia for the same reasons as 
discussed above with respect to Belarus.
    Based on comparisons of EP to NV, the petitioner calculated 
estimated dumping margins ranging from 45.52 to 58.40 percent.

Moldova

Export Price
    The petitioner based EP on a price quote from Moldova Steel Works 
(MSW) to an unaffiliated U.S. purchaser for different grades and sizes 
of rebar, and calculated a net U.S. price by deducting foreign inland 
freight, international freight, and U.S. port charges.
Normal Value
    The petitioner alleges that Moldova is an NME country, and 
constructed NV based on the FOP methodology pursuant to section 773(c) 
of the Act. For the reasons described above for Belarus, Moldova will 
be treated as an NME unless and until its NME status is revoked.
    Given that information regarding MSW's consumption rates is not 
available, NV was calculated using the same methodology described above 
for Belarus, except that Indonesia, rather than Thailand, was used as 
the surrogate country for valuing the FOP. The petitioners assert that 
Indonesia is the most appropriate surrogate country for Moldova because 
Indonesia is: (1) A market economy country; (2) a significant producer 
of comparable merchandise; and (3) at a level of economic development 
comparable to Moldova in terms of per capita GNP. Based on the 
information provided by the petitioner, we believe that the 
petitioner's use of Indonesia as a surrogate country is appropriate for 
purposes of initiating this investigation.
    In accordance with section 773(c)(4) of the Act, the petitioner 
valued FOP, where possible, on reasonably available, public surrogate 
country data from Indonesia. Values for scrap steel and the scrap 
offset were based on Indonesian

[[Page 45758]]

import prices listed in TradStat Import/Exports Report for the period 
October 1999 through March 2000. The values for electricity and gas 
were obtained from the International Energy Agency's Energy Prices & 
Taxes, Fourth Quarter 1999. Labor was valued using the Department's 
regression-based wage rate for Moldova, in accordance with 19 CFR 
351.408(c)(3).
    The petitioner valued other production costs, for which no 
Indonesian surrogate values were available, using values from the two 
U.S. producers. All surrogate values which fall outside the POI were 
adjusted for inflation. To determine depreciation and SG&A, the 
petitioner applied rates derived from the 1998 financial statements of 
Jakarta Kyoei, an Indonesian producer of the subject merchandise. For 
interest expense, the petitioner used Jakarta Kyoei's 1997 financial 
statements, explaining that the 1998 interest expenses were 
unreasonably high as a result of the financial crisis. The amount for 
profit was reported as zero because Jakarta Kyoei reported a loss on 
its 1998 financial statements. Based on the information provided by the 
petitioner, we believe that the surrogate values represent information 
reasonably available to the petitioner and are acceptable for purposes 
of initiating this investigation.
    Based on comparisons of EP to NV, the petitioner calculated an 
estimated dumping margin of 49.07 percent.

The People's Republic of China

Export Price
    The petitioner based EP on a price quote from Laiwu Steel Group 
Limited (Laiwu) to an unaffiliated U.S. purchaser for different grades 
and sizes of rebar, and calculated a net U.S. price by deducting 
international freight, U.S. port charges, and customs duties paid.
Normal Value
    The petitioner asserts that the PRC is an NME country, and that in 
all previous investigations the Department has determined that the PRC 
is an NME. See, e.g., Natural Bristle Paintbrushes and Brush Heads From 
the People's Republic of China, 65 FR 13944, 13946 (March 15, 2000) 
(preliminary determination). The PRC will be treated as an NME unless 
and until its NME status is revoked. Pursuant to section 771(18)(C)(i) 
of the Act, because the PRC's status as an NME remains in effect, the 
petitioner determined the dumping margin using an NME analysis.
    Given that information regarding Laiwu's consumption rates is not 
available, NV was calculated using the same methodology described above 
for Moldova. Further, Indonesia was used as the surrogate country. We 
believe that Indonesia is an appropriate surrogate for purposes of 
initiating this case with respect to the PRC for the same reasons as 
discussed above with respect to Moldova.
    Based on comparisons of EP to NV, the petitioner calculated an 
estimated dumping margin of 59.98 percent.

Poland

Export Price
    The petitioner based EP on a price quote from Huta Ostrowiec to an 
unaffiliated U.S. purchaser for different grades and sizes of rebar, 
and calculated a net U.S. price by deducting foreign inland freight, 
international freight, and U.S. port charges.
Normal Value
    With respect to NV, the petitioner provided a home market price 
that was obtained from foreign market research for a grade and size of 
rebar that is comparable to those of the products exported to the 
United States which serve as the basis for EP. The petitioner states 
that the home market price quotation was FOB mill and did not make any 
deductions from this price.
    Although the petitioner provided a margin based on a price-to-price 
comparison, it also provided information demonstrating reasonable 
grounds to believe or suspect that sales of rebar in the home market 
were made at prices below the fully absorbed 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, interest expenses, and packing. The petitioner calculated COM 
based on the average consumption rates of two U.S. rebar producers. The 
petitioner adjusted COM for known differences in the production process 
used by producers in the United States and Poland. To calculate 
depreciation, SG&A, and interest expenses, the petitioner also relied 
upon its own data because it was unable to locate public financial 
statements for Huta Ostrowiec. 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. See the 
Initiation of Cost Investigations section below.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioner also based NV for sales in Poland on CV. The petitioner 
calculated CV using the same COM, depreciation, SG&A and interest 
expense figures used to compute Polish home market costs. Consistent 
with section 773(e)(2) of the Act, the petitioner also added to CV an 
amount for profit. Petitioner derived profit based upon its own data.
    Based upon the comparison of CV to EP, the petitioner calculated an 
estimated dumping margin of 53.54 percent.

Republic of Korea

Export Price
    The petitioner determined EP based on price quotes from Hanbo Iron 
and Steel Co. Ltd. (Hanbo) and the former Kangwon Industries Ltd. 
(Kangwon), which has recently been acquired by Inchon Iron & Steel Co. 
Ltd. (Inchon), to unaffiliated U.S. purchasers for different grades and 
sizes of rebar. The petitioner calculated a net U.S. price by deducting 
foreign inland freight, international freight charges, Korean and U.S. 
port charges, and customs duties paid.
Normal Value
    With respect to NV, the petitioner provided home market prices that 
were obtained from foreign market research for grades and sizes of 
rebar that are comparable to the products exported to the United States 
which serve as the basis for EP. The petitioner calculated an ex-
factory NV by deducting from the quoted home market prices foreign 
inland freight.
    Although the petitioner provided a margin based on a price-to-price 
comparison, it also provided information demonstrating reasonable 
grounds to believe or suspect that sales of rebar in the home market 
were made at prices below the fully absorbed 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, interest expenses, and packing. The petitioner calculated COM 
based on the average consumption rates of two U.S. rebar producers. The 
petitioner adjusted COM for known differences in the production process 
used by producers in the United States and Korea. To calculate 
depreciation, SG&A, and

[[Page 45759]]

interest expenses the petitioner relied upon the 1998 unconsolidated 
annual report for Kangwon. 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. See the 
Initiation of Cost Investigations section below.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioner also based NV for sales in Korea on CV. The petitioner 
calculated CV using the same COM, depreciation, SG&A and interest 
expense figures used to compute Korean home market costs. Consistent 
with section 773(e)(2) of the Act, the petitioner also added to CV an 
amount for profit, using data from Inchon's 1998 financial statements 
because Kangwon had no profit in 1998.
    Based upon the comparison of CV to EP, the petitioner calculated 
estimated dumping margins of 86.69 percent and 102.28 percent.

The Russian Federation

Export Price
    The petitioner based EP on a price quote from Kuznetskiy Met 
Kombinat (KMK) to an unaffiliated U.S. purchaser for different grades 
and sizes of rebar, and given that the terms of this price quote were 
FOB mill, no deductions to the price quotation were made.
Normal Value
    The petitioner asserts that the Russia is an NME country, and that 
in all previous investigations the Department has determined that 
Russia is an NME. See, e.g., Notice of Final Determination of Sales at 
Less Than Fair Value; Solid Fertilizer Grade Ammonium Nitrate from the 
Russian Federation, 65 FR 42669, 42670-71 (July 11, 2000) (final 
determination). Russia will be treated as an NME unless and until its 
NME status is revoked. Pursuant to section 771(18)(C)(i) of the Act, 
because Russia's status as an NME remains in effect, the petitioner 
determined the dumping margin using an NME analysis.
    Given that information regarding KMK's consumption rates is not 
available, NV was calculated using the same methodology described above 
for Belarus. Further, Thailand was used as the surrogate country. We 
believe that Thailand is an appropriate surrogate for purposes of 
initiating this case with respect to Russia for the same reasons as 
discussed above with respect to Belarus.
    Based on comparisons of EP to NV, the petitioner calculated an 
estimated dumping margin of 68.87 percent.

Ukraine

Export Price
    The petitioner based EP on a price quote from Krivoi Rog State 
Mining & Metal Works (Krivoi Rog) to an unaffiliated U.S. purchaser for 
different grades and sizes of rebar, and calculated a net U.S. price by 
deducting foreign inland freight, international freight, U.S. port 
costs, and customs duties paid.
Normal Value
    The petitioner alleges that Ukraine is an NME country, and in all 
previous investigations, the Department has determined that Ukraine is 
an NME. See, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Cut-to-Length Carbon Steel Plate From Ukraine, 62 
FR 61754 (November 19, 1997)). Ukraine will be treated as an NME unless 
and until its NME status is revoked. Pursuant to section 771(18)(C)(i) 
of the Act, because Ukraine's status as an NME remains in effect, the 
petitioner determined the dumping margin using an NME analysis.
    Given that information regarding Krivoi Rog's consumption rates is 
not available, NV was calculated using the same methodology described 
above for Moldova. Further, Indonesia was used as the surrogate 
country. We believe that Indonesia is an appropriate surrogate for 
purposes of initiating this case with respect to Ukraine for the same 
reasons discussed above with respect to Moldova.
    Based on comparisons of EP to NV, the petitioner calculated an 
estimated dumping margin of 41.69 percent.

Venezuela

Export Price
    The petitioner based EP on a price quote from Siderurgica del 
Turbio SA (Sidetur) to an unaffiliated U.S. purchaser for different 
grades and sizes of rebar, and calculated a net U.S. price by deducting 
foreign inland freight, international freight, and Venezuelan and U.S. 
port charges.
Normal Value
    With respect to NV, the petitioner provided a home market price 
obtained from foreign market research for grades and sizes of rebar 
comparable to the products exported to the United States which serve as 
the basis for EP. The petitioner calculated an ex-factory NV by 
deducting from the quoted home market price movement related charges 
associated with delivering the merchandise to the Venezuelan customers.
    Based upon the comparison of NV to EP, the petitioner calculated an 
estimated dumping margin of 125.49 percent.

Initiation of Cost Investigations

    As noted above, pursuant to section 773(b) of the Act, the 
petitioner provided information demonstrating reasonable grounds to 
believe or suspect that sales in the home markets of Indonesia, Japan, 
Korea, and Poland were made at prices below the fully absorbed COP and, 
accordingly, requested that the Department conduct country-wide sales-
below-COP investigations in connection with the requested antidumping 
investigations for these countries. The Statement of Administrative 
Action (SAA), submitted to the U.S. 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 petition for the 
representative foreign like products to their COPs, we find the 
existence of ``reasonable grounds to believe or suspect'' that sales of 
these foreign like products in markets of Indonesia, Japan, Korea, and 
Poland 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.

Critical Circumstances

    The petitioner has alleged that the Department should make an 
expedited

[[Page 45760]]

finding that critical circumstances exist with regard to imports of 
rebar from the PRC, Korea, Latvia, and Poland, and has supported its 
allegations with the following information.
    First, the petitioner claims that the importers knew, or should 
have known, that the rebar was being sold at less than NV. 
Specifically, the petitioner alleges that the margins calculated in the 
petition for each of the four countries exceed the 25 percent threshold 
used by the Department to impute importer knowledge of dumping. 
Moreover, with regard to Korea and Latvia, the petitioner notes that 
exports of rebar from these countries have been subject to recent 
antidumping duties imposed by countries other than the United States.
    The petitioner also has alleged that imports from these four 
countries have been massive over a relatively short period. Alleging 
that there was sufficient pre-filing notice of these antidumping 
petitions, the petitioner contends that for purposes of this 
determination, the Department should compare imports during September 
to December 1999 to imports during January to April 2000.\6\ As 
explained in section 351.206(i) of our regulations, ``the Secretary 
normally will consider a ``relatively short period'' as the period 
beginning on the date the proceeding begins and ending at least three 
months later. However, if the Secretary finds that importers, or 
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 period of not less than three months from that 
earlier time.''
---------------------------------------------------------------------------

    \6\ For the PRC, the petitioner compared imports from the five-
month period of August to December 1999, and January to May 2000, in 
order to include a significant May shipment of rebar in its 
analysis.
---------------------------------------------------------------------------

    The petitioner supported its claim that an earlier comparison 
period should be used with citations from a December 7, 1999, news 
article discussing the formation of a U.S. industry coalition and the 
likelihood of filing of antidumping petitions against producers of 
rebar. Additionally, in a petition amendment/supplement filed July 13, 
2000, the petitioner provided several additional articles published 
prior to the petition filing that specifically referenced the volume of 
rebar exports from these four countries.
    In the past, the Department concluded that a high level of press 
coverage provided foreign producers of rebar with prior knowledge of 
pending antidumping investigations. See e.g., Initiation of Antidumping 
Duty Investigations: Certain Cold-Rolled Flat-Rolled Carbon-Quality 
Steel Products From Argentina, Brazil, the People's Republic of China, 
Indonesia, Japan, the Russian Federation, Slovakia, South Africa, 
Taiwan, Thailand, Turkey, and Venezuela, 63 FR 34194, 34203 (June 25, 
1999). Therefore, the Department considered import statistics contained 
in the petition for the periods September-December 1999 and January-
April 2000 for Korea, Latvia and Poland, and the periods of August-
December 1999 and January-May 2000 for the PRC. Based on this 
comparison, imports of rebar from the PRC increased by 130 percent, 
imports from Korea increased by 17 percent, imports from Latvia 
increased by 42.4 percent, and imports from Poland increased from zero 
imports to over forty thousand metric tons, an unquantifiable 
percentage.\7\
    The Department also considers the extent of the increase in the 
volume of imports of the subject merchandise as one indicator of 
whether a reasonable basis exists to impute knowledge that material 
injury was likely. In the cases involving the PRC, Korea, Latvia and 
Poland, the increases in imports were in excess of fifteen percent, the 
amount considered ``massive'' by the Department. Taking into 
consideration the foregoing, we find that the petitioner has supported 
its claim of critical circumstances with information reasonably 
available for purposes of initiating a critical circumstances inquiry. 
For these reasons, we will investigate this matter further and will 
make a preliminary determination at the appropriate time, in accordance 
with section 735(e)(1) of the Act and the Department's practice (see 
Policy Bulletin 98/4 (63 FR 55364, October 15, 1998)).
---------------------------------------------------------------------------

    \7\ In the period of September to December 1999, there were no 
imports of rebar from Poland.
---------------------------------------------------------------------------

Fair Value Comparisons

    Based on the data provided by the petitioner, there is reason to 
believe that imports of rebar from Austria, Belarus, Indonesia, Japan, 
Korea, Latvia, Moldova, the PRC, Poland, Russia, Ukraine, and Venezuela 
are being, or are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitions allege that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the individual and cumulated imports of 
the subject merchandise sold at less than NV. The petitioner contends 
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. We have assessed the 
allegations and supporting evidence regarding material injury and 
causation, and have determined that these allegations are properly 
supported by accurate and adequate evidence and meet the statutory 
requirements for initiation (see Initiation Checklist at Attachment Re: 
Material Injury).

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on rebar, and the 
petitioner's responses to our supplemental questionnaire clarifying the 
petitions, as well as our conversations with foreign market researchers 
and other experts who provided information concerning various aspects 
of the petitions, we have found that they meet the requirements of 
section 732 of the Act. Therefore, we are initiating antidumping duty 
investigations to determine whether imports of rebar from Austria, 
Belarus, Indonesia, Japan, Korea, Latvia, Moldova, the PRC, Poland, 
Russia, Ukraine, and Venezuela 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 initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of the governments of Austria, Belarus, Indonesia, 
Japan, Korea, Latvia, Moldova, the PRC, Poland, Russia, Ukraine, and 
Venezuela. 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, no later than August 14, 2000, whether 
there is a reasonable indication that imports of certain rebar products 
from Austria, Belarus, Indonesia, Japan, Korea, Latvia, Moldova, the 
PRC, Poland, Russia,

[[Page 45761]]

Ukraine, and Venezuela 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 issued and published pursuant to section 777(i) of 
the Act.

    Dated: July 18, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-18809 Filed 7-24-00; 8:45 am]
BILLING CODE 3510-DS-P